Saab may be the next automotive manufacturer casualty in this recession, right after Ssangyong filed for court receivership earlier this year. GM says Saab is just 10 days away from bankruptcy, and if it does not get financial aid soon it will have to file for reorganization or bankruptcy.
Reorganization will allow them to negotiate with their creditors and convince them that it will be able to reorganize and writedown the value of its debts in goodwill. Once in a state of reorganization (receivership), creditors cannot come knocking for debts and GM will also cease control over Saab.
Saab will then be able to go to the Swedish government for help again, although attempts at asking for a bailout have not been successful in the past. GM says it only wants a bailout to keep Saab running long enough to find a buyer.
It asked for US$568 million, however Swedish Industry Minister Maud Olofsson said Saab has been running at a loss for years now and she did not get elected to give a bailout to a company with a bad track record, something that she views as irresponsible. She also says she will not put the burden of owning car companies and car factories on the Swedish taxpayer.
Anyway, if their creditors are not convinced that a successful reorganization can occur in the first place, it will have to proceed with bankruptcy.