Yesterday, Saab CEO Victor Muller has proposed to subcontracting companies to pay 10% of the total on the accrued receivables, with the remainder due in September. Until today, the partners should make a binding decision. In his native Sweden, Saab seems to progress with the proposal.
Not only Svenake Berglie, head of the Association of Suppliers, welcomed the proposal. Also Markus Nyman, CEO of the supplier IAC is positive to the thing, after he had sounded today in the morning still negative.
Overall, in Sweden, it seems that 10% is better than nothing, and a production start is thought to be a path to the future, while bankruptcy is nowhere near. The Swedish suppliers have been surprisingly patient with Victor Muller and Saab so far. Swedish solidarity?
It looks much worse elsewhere, outside of Sweden. The situation there is much more skeptical. Lars Holmquist, CEO of the European supplier association CLEPA, sees little approval for the Saab proposal. Victor Muller, says Holmquist, writes “Cash on Delivery” in his proposal, but means that payment is made after five or six days. In Holmquist's eyes, this is not a payment on delivery - but a new payment term.
“When I buy a pizza, I pay for the pizza. That is “Cash on Delivery. I am not saying that I will come back in a week and then pay, ”said the CLEPA CEO. He has no confidence in further supplier credit for Saab.
We do not know the wording of Muller's letter. The term "cash payment" went through the Swedish press today, but it will be difficult to realize.
Do the suppliers have a choice?
The CEO of FKG, Svenake Berglie, thinks no. With a Saab bankruptcy everyone would have lost. Marcus Nyman from IAC Group Sweden sees it similarly. He welcomes "Saab's openness" and that the company is now communicating with its creditors. "The first production start was badly prepared, I think this time it is better planned".
How do the major European suppliers, such as Valeo, decide? Saab will not have it as easy as the comparatively small Swedish companies. Without collateral, in the form of a bank guarantee, for example, there will not be much to do.
What Saab would need in this situation would be a CFO that the company hasn't had in a long time. As Victor Muller said about the resignation of Spyker CFO Go so beautifully "the company does not need two CFOs". Has he forgotten that he doesn't have any anymore, or is that not important to Muller? Or does Muller think he can now do everything in personal union? It seems so.
Because even a good CFO at Saab would be enough to end this undignified ups and downs in Trollhättan. He could bring clarity to the financial situation and rebuild trust with the suppliers.