Swedish automaker Saab cannot pay its 3,800 employees their wages for lack of \"short-term funding,\" the Dutch parent company Swedish Automobile, formerly Spyker, said Thursday.
Saab, which has based its funding strategy on tie-ups in China, had announced on June 13 a partnership with two Chinese businesses which was to generate investment of 245 million euros ($350 million).
The two Chinese firms were car distributor Pang Da and manufacturer Zhejiang Youngman Lotus Automobile.
But production at the Saab factory at Trollhattan in western Sweden has been at a standstill since June 8. On Monday, management told workers on the assembly lines that they should not come to work before July 4.
In the statement on Thursday, the parent firm said: "Swedish Automobile N.V. (Swedish Automobile, formerly Spyker Cars N.V.) announces that Saab Automobile AB (Saab Automobile) will be unable to pay the wages to employees as it has not yet obtained the necessary short-term funding."
Saab, which employs 3,800 people, was saved at the last minute at the beginning of 2010 when it was bought by small Dutch firm Spyker from US giant General Motors which wanted to end its involvement in the wake of the financial crisis.
Since then Spyker, which announced big ambitions for Saab, has lurched from one cash crisis to another. A previous deal with a Chinese firm fell through.
Its attempts to tie up with Chinese firms are aimed partly at accessing funding and partly at widening access to the fast-growing Chinese auto market.
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