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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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RE: Thanks God!!
By FITCamaro on 10/1/2009 12:35:07 PM , Rating: 2
Yeah three cheers for 13,000 more unemployed!!!

Seriously. Cheering a company failing and people losing their jobs is pure stupidity. I didn't like every company thats gone out of business in this mess (Circuit City) but I didn't look forward to seeing them fail either.

RE: Thanks God!!
By thurston on 10/1/2009 1:07:42 PM , Rating: 2
Are you bi-polar that was an awesome post, I'm very surprised.

RE: Thanks God!!
By FITCamaro on 10/1/09, Rating: 0
RE: Thanks God!!
By thurston on 10/1/2009 4:53:04 PM , Rating: 2
That's more like it, you shouldn't leave your computer logged on, somebody might leave a post while you're away.

RE: Thanks God!!
By The0ne on 10/1/2009 2:24:28 PM , Rating: 2
I can't tell if your comments were sarcasm or not :D but...

I don't like to cheer for what's going on but seriously GM needs to die. They are ALREADY going back to their old ways after being handed tax payer money. Why the hell should they and any of their brands survive only to do the same fcking business/mangement model again?

I was a supporter of the big3 surviving initially but now I say fck them and let them die. They more than well deserve it. To me they are a joke for manufacturing and quality, areas where I excel in.

RE: Thanks God!!
By Reclaimer77 on 10/1/2009 5:02:27 PM , Rating: 1
Don't you get it ? Obama bought GM and fired their CEO so we, the American taxpayer, could keep the union payola going. The same people who got him in the White House. Think about it, the ENTIRE country knows the Unions slowly killed GM, but did the President ONCE even hint that they were a problem ? Hell no.

It's not a conspiracy it's just how politicians, especially from Chicago, work.

RE: Thanks God!!
By Ammohunt on 10/1/2009 3:00:49 PM , Rating: 1
Union jobs; its karma

RE: Thanks God!!
By Jalek on 10/1/2009 8:56:42 PM , Rating: 2
Initially at least, Saturn had a different union contract system more in line with the Japanese companies it was competing with.

In recent years, GM's been taking everything that made Saturn different away, which might have included labor contracts.

RE: Thanks God!!
By 67STANG on 10/2/2009 3:24:35 AM , Rating: 2
The 13,000 out of work employees could always find a job at Blockbuster. I hear they're hiring...

"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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