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Saturn has officially been killed by GM after the Penske Automotive Group failed to secure a producer of the vehicles and the sale to Penske fell through.  (Source: Jalopnik)

The death will shut down 350 dealerships nationwide and will cost approximately 13,000 jobs. It also marks an embarrassment for Penske and a loss of sales revenue for GM.  (Source: MSNBC)

Saturn will largely be remembered for its "No Haggle" policy, its success in the early 90s, and its resurgence between 2000-2008 with new models like the 2007 Saturn Sky, pictured here.  (Source: Drag Times)
Saturn brand meets its demise when deal with the Penske Automotive Group falls through

There was a death to report yesterday in the automotive industry.  At only 24 years of age, the Saturn brand was officially laid to rest by GM.  The brand was always one of great ups and downs, but in the end a champion to save it failed to emerge.

The Saturn brand was officially formed in 1985 and the first cars rolled off the assembly line in 1990.  The brand projected a U.S. family-friendly image and produced high quality small vehicles to compete with Nissan, Honda, and Toyota imports.  Also popular was Saturn's famous "No Haggle" price policy.

However, the expenses of the vehicles' quality and that policy left the brand relatively unprofitable.  It is unclear if even at its greatest sales year it turned a profit.  As a result, GM didn't give it the product it needed to stay fresh, and it fell behind other brands in the 90s.  At the turn of the millennium GM tried to revitalize the brand, and it seemed to be working.  Customer interest in new models like the Saturn Vue, Ion, and Sky soon rose and the brand looked poised for a comeback.  Then the recession came.

Even its new vigor was not enough to outweigh its weakness in the late 90s and Saturn found itself among the many brands on GM's chopping block, along with Saab, Hummer, Vauxhall, Opel, and Pontiac.  Under government supervision, GM worked out a sale of Saturn to the Penske Automotive Group, founded by racing legend Roger Penske.  The group already owned 310 auto retailers, so it seemed a perfect fit for the brand

The deal was almost complete, but one major aspect remained unanswered -- who would produce the vehicles.  GM agreed to temporarily take on some of the design and engineering responsibilities and transition these task to Penske.  It also agreed to produce Saturn vehicles, but only until 2011.  Penske needed someone to take over production from GM.  Reportedly, Renault Samsung Motors Co., a South Korean subsidy of France's Renault motors which doesn't currently import in the U.S., was among of those considered to take on the task of producing of Saturn-branded vehicles abroad and then shipping them to the U.S.

The Boulogne Billancourt, France-based automaker wrote, "Renault has been in contact with Penske to supply cars, parts and technology to Saturn through an OEM agreement.  The conditions for an agreement have not been found."

At the end of the day, the mystery third-party producer pulled out when its board reportedly rejected the deal to produce Saturn vehicles.  This left Penske without a producer past 2011.  Penske terminated the deal and GM terminated Saturn.

The mood was a dismal one when the brand, beloved by many, was laid to rest.  With it goes 13,000 jobs, largely in Michigan, and 350 dealerships, which have until October 2010 to close.

GM expressed its disappointment with the development, with Chief Executive Officer Fritz Henderson stating, "This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality."

Some analysts were shocked that GM let the deal collapse, losing the profit of the sale.  Stephen Spivey, an auto analyst with Frost & Sullivan in San Antonio, states, "I’m a little surprised that there was no plan B here.  It’s surprising to me that Penske had no idea that this might not be accepted."

Indeed, the loss could hurt GM's reputation, according to analysts.  GM also lacks a clear plan to salvage Saturn's hybrid technology and other important technologies from the brand.  For Penske it represents an embarrassing mar on the group's traditionally strong track record, which has included such successes as brokering a deal with Daimler as the exclusive import of Smart cars.

Many analysts are simply lamenting what could have been.  Rebecca Linland, an analyst at IHS Global Insight, states, "Saturn is the brand you wanted to like.  It is the little brand that could have and should have [been great]."



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Nothing but good times in my saturn
By wht1986 on 10/1/2009 9:37:31 AM , Rating: 4
I had a '92 SL2. I think I had about 180k miles on it when I traded it in. Never had a problem, and dealer service was unbelievable. One time I had my windows down, and a passing truck kicked up a piece of wet tar. It went through my window and landed on my backseat. It left a nice stain. A few weeks later I was having an oil change. I mentioned the stain and asked if they could try to remove it. When I got my car back, the stain was gone. I said "how did you get it out?" they replied, "we just changed out the whole back seat. No Charge. Have a good day" Good Bye Saturn. I, for one, will miss you.




RE: Nothing but good times in my saturn
By Brandon Hill (blog) on 10/1/2009 9:39:12 AM , Rating: 4
quote:
When I got my car back, the stain was gone. I said "how did you get it out?" they replied, "we just changed out the whole back seat. No Charge. Have a good day" Good Bye Saturn. I, for one, will miss you.


That's probably why they never turned a profit ;-)


RE: Nothing but good times in my saturn
By JAB on 10/1/2009 10:16:09 AM , Rating: 2
No it is more of a company that completely lost its way. They did nothing to control costs or reinvest. GM was just costing on past success. Their manufacturing costs were out of control and I am not talking about wages. GM never wanted to focus on that brand it lost out in the corporate infighting.


RE: Nothing but good times in my saturn
By DEVGRU on 10/1/2009 10:38:28 AM , Rating: 2
I dunno about that...

I've never owned one, but I thought when Saturn released the Sky a few years ago (which, IMO, is a badass car for a Saturn) I thought the brand was starting to have a nice resurgence. Too bad it had to end this way, especially if like the article mentions Saturn had some hybrids in the pipeline coupled with the fact hybrids are beginning to see real demand.


RE: Nothing but good times in my saturn
By Iaiken on 10/1/2009 11:37:46 AM , Rating: 1
Where were you during the 90's?

Saturn's until recently were awful cars from a brand that amounted to nothing more than the unwanted red-badged child of GM.

It wasn't until 2005 that they really started to turn the brand around and by then it was just too late.


By Einy0 on 10/1/2009 8:15:24 PM , Rating: 2
Where is your info coming from? I own two Saturns made in 1999 and 2000 and they are both great little cars. Far fewer mechanical concerns than any other vehicles I've ever owned. They both are good on gas.(30-35 MPG avg) They don't feel like little cramped boxes, like most cars from the time period that where good on gas. My wife will shed a tear when I tell her Saturn is gone. RIP...


By Reclaimer77 on 10/1/2009 3:34:19 PM , Rating: 2
quote:
No it is more of a company that completely lost its way. They did nothing to control costs or reinvest. GM was just costing on past success. Their manufacturing costs were out of control and I am not talking about wages. GM never wanted to focus on that brand it lost out in the corporate infighting.


Another idiot...sigh.

Gm TRIED, they came to the UAW and practically begged, several times, to get them to be reasonable and were shut down every time. GM saw what was coming and they were powerless do to much about it.

Where do you idiots keep getting your information from ??

Please link me one goddamn piece of evidence on how, without touching wages, they could lower "manufacturing costs".


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