TROLLH&AUML;TTAN, Sweden -- Saab will continue to reduce its work force as it tries to boost productivity and return to profitability.
"We need to let go of several hundred workers by the end of the year," says Saab boss Peter Augustsson.
About 6,300 people work here for Saab, a division of General Motors Europe. That's down from more than 9,000 at the end of 1999.
Like last year, there will be no early retirement programs or severance payoffs to help reduce staff. The number of employees will drop solely through natural turnover and by not filling open positions.
If Saab does not further increase unit sales next year, Augustsson says the staff cuts will continue.
Saab plans to sell up to 135,000 cars worldwide this year. It sold 131,641 in 2003. The internal goal is to hit the 200,000 unit mark in 2006.
To reach that goal, Augustsson is counting on buyers in North American – where Saab set a sales record of 47,914 units last year.
Two new models that will only be available in North America should boost sales: the 9-2X and, starting next spring, the 9-7X SUV.
The new 9-3 wagon will follow in mid-2005. A crossover called the 9-6X and a restyled version of the 9-5, Saab's top model, are scheduled to be launched in 2006.
"Our problem is that we do not have enough products and that our fixed costs are too high," Augustsson says. He says that Saab managed to reduce its structural costs by 20 percent or E163 million last year. The Saab boss expects similar cost savings this year.
"We are sticking to our target of returning to profitability in 2004," he says.
A Swedish regulatory filing shows that Saab lost E4.8 million in 2003.
Augustsson said that Saab is increasing productivity by 10 percent a year at the Trollhättan plant. Last year 112,000 autos were built there.
"But that is not sufficient. Our aim is to become one of the best GM plants in Europe," he says.
He also says that there is a "theoretical" danger of the plant being closed down. "This cannot be ruled out. However, this applies to every single GM plant."
An expansion of production is also possible. "Our maximum capacity is currently 200,000 units. It would be possible to also manufacture models by other GM brands that share the architecture with the 9-3."
Possible candidates are the Opel Vectra successor and a planned Cadillac model.