Saab throws in towel as car production plummets

As UK car production slumps by over 50%, Swedish firm Saab applies for creditor protection...

Last Updated: 06 Nov 2012

More grim news for the beleaguered car industry this morning: UK production slumped by 58% in January, according to the Society of Motor Manufacturers and Traders, as the big car-makers shut up shop in the face of slumping demand. The slow-down also seems to have claimed another high-profile victim: loss-making Swedish car giant Saab, part of the General Motors empire, which has today filed for the Swedish equivalent of Chapter 11 bankruptcy protection. It’s unlikely to be the last…

According to the SMMT, the industry churned out just 61,404 cars and a measly 8,351 commercial vehicles last month – which means the year-on-year slump is even worse than it was in December. It’s not exactly a massive surprise; most of the big manufacturers (including the likes of Ford, BMW, Vauxhall and Nissan) have been announcing extended winter breaks, reduced shifts and mass lay-offs in recent weeks. Given that the alternative would be to end up with vast numbers of unsold cars sitting around test tracks, they don’t have a great deal of choice.

However, it doesn’t really bode well for the immediate future of one of the few areas of manufacturing that Britain’s actually quite good at. OK, so we don’t actually own any of these car companies any more, but they still employ a lot of people here. Unions are now claiming that the industry is at ‘crisis point’ – so unless the Government throws an awful lot of money at it very quickly (i.e. a lot more than the £2.3bn promised thus far), many more people are going to be joining the dole queue. Unite seems to think that one plant in particular is in imminent danger of being closed down.

The UK’s 80 Saab dealerships will also be feeling distinctly nervous today after the Swedish company applied for ‘reorganisation’ – apparently it wants to ditch its parent GM and go off on its own. It’ll need cash to get through this process, but so far the Swedish government has refused to bail it out. Given that Saab never really seems to have worked out its brand proposition (though don't mention that to our editor, who drives an ageing 9-3), and hasn’t made a profit since 2001 – i.e. it even failed to make money during an unprecedented global boom – some might argue that it’s not worth saving...

In today's bulletin:
Mortgage lenders under pressure as repossessions soar
Saab throws in towel as car production plummets
Blind Man gaffe highlights the danger of mail merges
Mills & Boon rails at 'frigid' Virgin
Tips on breaking through, from YouTube

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