Saab’s Production Stop affects its Supplier Base

Troubled Swedish carmaker Saab said on Thursday that production remained halted in a “hiccup” as the company and its suppliers restocked components after a seven-week stoppage which ended two weeks ago.

“The seven-week production stop in April and May has not just affected Saab Automobile, but particularly also its supplier base,” Saab’s Dutch owner Spyker said in a statement.

The carmaker, which started up production again at its Trollhaettan plant in southwestern Sweden on May 27 after a more than seven-week hiatus as suppliers stopped deliveries over unpaid bills, had halted production again on Tuesday afternoon and most of the day on Wednesday.

On Thursday, Spyker said “Saab Automobile has decided to temporarily suspend production and will resume … as soon as possible once it has secured a more stable inflow of components and parts together with its supplier base.”

The halt, the statement said, was linked to “anticipated production hiccups in the start-up phase.”

Saab and Spyker chief executive Victor Muller said in the statement: “We anticipated that we would not see a smooth inflow of supplies as from the day we restarted production.”

He explained: “We have a few thousand suppliers worldwide with each of whom we have to reach acceptable terms and conditions to resume production of parts and subsequent deliveries. Many suppliers are located outside Europe and re-stocking inevitably takes time.”

Company spokeswoman Gunilla Gustav told AFP on Wednesday that the problem was linked to Saab’s “just-in-time production process,” which is “very sensitive to disruptions… It could be that 99 percent of the components are all in place, but if there is a problem with one or two parts, the whole line can be disrupted.”

The tiny Swedish brand Saab, which employs 3,800 people, was rescued at the last minute in early 2010 when tiny Dutch company Spyker bought it for 400 million dollars from US auto giant General Motors.

Spyker originally made luxury sports cars but said in February it was selling that division to concentrate on Saab, and on Tuesday it announced it would change its name to Swedish Automobile.

After initial optimistic statements and production forecasts, Spyker and Saab have recently been scrambling to pull together enough cash to keep production going.

“Saab is working on a number of initiatives to secure further short and medium-term funding,” the company said Thursday, adding it was also in “negotiations with a number of suppliers on payment and delivery terms.”

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