Sad day in Scandinavia
|Douglas A. Bolduc is managing editor at Automotive News Europe.|
It has been a dark 24 hours for two of Scandinavia's resilient but troubled automakers. Sweden's Saab told employees today that it doesn't have enough cash to pay their wages and said there are no guarantees it will get a financial lifeline. Last night, tiny Norwegian electric car maker Think Global said it filed for bankruptcy after failing to get a fresh cash injection from investors.
One has to wonder whether the end is near for both.
This is the fourth time Think has collapsed financially in its 20-year history. Saab has been a chronic money loser during its 60-plus years of operation and was in the process of being wound down in early 2010 before it was taken over by Spyker Cars.
Why has success been so unattainable for both? A simple answer is the limited appeal of the companies' products.
When Saab was at its best it was a bit quirky; a true non-conformist with products that attracted buyers looking to stand apart from the rest. Saab could not maintain this image as a part of General Motors. Under Spyker, Saab promises to return to its roots, but without enough cash around to pay suppliers and workers those promises are falling flat.
Think's trouble is that despite all the hype around electric vehicles the reality is this: the demand is not there yet.
Another problem both companies face is the high cost of doing business in Scandinavia. Think only made matters worse for itself by deciding to open a second car assembly plant in the Elkhart, Indiana.
Think's future is in the hands of a trustee who will consider everything from liquidation to a fifth rebirth under the leadership of new investors. Unless Saab gets funding, it could be heading down the same road.