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
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
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
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
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
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
quote: I love listening to domestic car owners try to haggle trade in value at dealerships.
quote: Ummm... That's either a strange hobby or you go thru a lot of cars.