NEVS announces 200 layoffs as it says Saab restart will 'take time'Fri, 26 Sep 2014 08:01:00 EST
For a fleeting moment a few weeks ago, the news from Saab-owner National Electric Vehicle Sweden appeared almost positive. The company had its reorganization plan approved (a day after it was denied), and the automaker was actually showing a real, running vehicle, albeit one with a top speed of 75 miles per hour. But those tiny crumbs of potential goodness have been swept away because NEVS has announced layoffs of as many as 200 factory employees in September "due to lack of work."
Workers probably shouldn't get too eager to return to the factory either, because company's "decision to re-start production will be further delayed" by an unspecified amount of time, NEVS says in a press release. To begin assembling cars again, the company needs to find long-term funding and a new majority owner. Those seem like two very steep hurdles for the embattled automaker to clear.
Despite not producing cars since May, NEVS still claims it's negotiating with a new owner, possibly Mahindra, but according to Reuters, the Swedish company owes about 400 million kronor ($56 million) to creditors. According to its layoff announcement, getting rid of these workers is one step in the business' reorganization plan to be presented on October 8. Scroll down to read its full release.
Nevs announces intention to lay off employees
Nevs announces intention to lay off up to 200 employees due to lack of work, as the decision to re-start production will be further delayed.
Nevs has retained the permanent workforce for production since the production was stopped in the end of May this year. The reason for this has been that the company would be ready to quickly start up production, upon such decision.
The prerequisites for making a decision to start up production are to have long-term secured funding and a business plan that has been worked through together with a new majority owner.
The ongoing discussions on collaboration and ownership structure, which has not yet resulted in a binding agreement, indicates that the decision for a start-up of production will take time.
With this there is a redundancy of the workforce. Therefore, Nevs' management has decided to hand in a notice of intention to lay off up to 200 employees to the Swedish Public Employment Service.
The terminations will take place in September in order to rapidly reduce the company's costs during the reorganization period. This is a step in the reorganization plan that the administrator will present on the creditors meeting on October 8.
Nevs intends to retain the remaining staff to maintain the plant in good condition, to be prepared for the new production, after such a decision is taken, and to continue developing new products.
By Chris Bruce
See also: Hot rod tractor stars in Swedish version of Farmkhana, NEVS' reorganization plan approved after all?, Saab owners NEVS denied creditor protection by Swedish court.