Linus Hook/Bloomberg NewsThe Saab 94X on display in Stockholm.

6:06 p.m. | Updated

Taking a bleak view of Saab Automobile’s prospects for recovery, a Swedish court on Thursday rejected the troubled carmaker’s application for protection from creditors. The decision sharply narrows its room for maneuvering and pushes it a step closer to financial collapse.

Saab employees have not been paid for August, and the company’s unions had been considering legal action that could have forced the company into liquidation when the bid for protection from creditors was announced on Wednesday.

Saab’s unions had given guarded support to bankruptcy protection, partly because the government would have been asked to guarantee workers’ salaries. But with its prospects dwindling, unions may feel they have no choice but to press on with their legal action.

Saab and two subsidiaries had petitioned the District Court in Vänersborg, Sweden, on Wednesday for “voluntary reorganization,” a move to gain time for Chinese partners to come through with long-term financing and prevent the legal challenge from unions.

But the court was not convinced by the plans.

Noting that Saab had just undergone a restructuring in 2009, when it was owned by General Motors, “the court did not see sufficient reason to believe that the chances were any better today than they were then,” said Cecilia Tisell, a court spokeswoman.

The court also found that the financing plans of Saab’s parent, Swedish Automobile, relying as they did on Chinese companies that had not yet received Beijing’s approval, were not concrete enough, Ms. Tisell said.

A further consideration, she added, was that Saab’s production lines completely stopped operating in June, and the court believed that even if production resumed, it might be difficult for the company to begin selling cars again.

“Saab Automobile is disappointed with the ruling,” the company said in a statement, adding that it would appeal the decision and disclose “further developments” on Friday.

One of Saab’s unions will decide within a few days whether to ask that Saab be declared bankrupt, said Leif Hakansson, a spokesman for the IF Metall North Älvsborg union.

“We regret that Saab Automobile is not going to get the time it needs until the funding from Pang Da and Youngman arrives,” he said in a statement.

Formerly known as Spyker Cars, Swedish Automobile, based in Zeewolde, the Netherlands, bought Saab from General Motors in 2010. Attracted by Saab’s loyal customers, Spyker’s entrepreneurial chief executive, Victor Muller, bet he could turn the company around where G.M. had failed.

But the company has never been able to sort out its finances, and production suffered after suppliers began cutting off credit in March.

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