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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: No Plan B
By FITCamaro on 10/1/2009 12:39:15 PM , Rating: 2
Or go into normal bankruptcy protection, throw off its union contracts and health care obligations, and resurge as a stronger company on its own. Not to mention NOT screw over all the private investors who were given the shaft in the government's takeover of the company while giving the unions a sweet deal and control of the company. The same union which caused many of GM's problems to begin with.

RE: No Plan B
By Reclaimer77 on 10/1/2009 3:50:02 PM , Rating: 1
Or go into normal bankruptcy protection, throw off its union contracts ...

The same people who helped put him in the White House ? Fat chance on that...

RE: No Plan B
By Samus on 10/1/2009 5:16:02 PM , Rating: 2
Ironically, I'd never considered buying any of GM's crap until recently, because they (in my opinion) never made a quality vehicle between 1975-2005. Sure, there was some 'good' ones in there, but you'd be crazy to consider them when stacked against the competition.

I mean seriously, what would you rather drive, a Saturn coupe or an Escort GT? A GM Sierra or a Ford F150? A Cadillac DeVille or a Lincoln Towncar? A Chevy Camero or a Ford Mustang?

I might add that ALL of the above Fords were THOUSANDS less expensive than their GM competator and, again, in my opinion, all better vehicles than GM's offerings.

The only depressing thing now about GM is that they're STILL around and STILL costing tax payers money.

RE: No Plan B
By Jalek on 10/1/2009 9:06:51 PM , Rating: 2
When they were first threatening bankruptcy, I checked out their product lines. The only one I was considering was a Saturn, but I won't be buying a dead brand, even if it's warranty is still backed by taxpayer money. I still have an old Saturn my relatives borrow regularly, it keeps running in spite of irregular maintenance.

Ford's been bleeding for years, they'd managed to survive even with the union burden. They, like Wells Fargo in banking, were taking the losses that come in business at times and dealing with them like capitalists.

Banks that can't handle risk/reward equations don't deserve to be in business, nor does a corporation that manufactures things nobody wants and flies to Congress for help instead of figuring out how to correct the marketability of their products.

I wonder who's paying the GM lobbyists and providing the "campaign donation" money now, Congress?

RE: No Plan B
By christojojo on 10/1/2009 4:04:51 PM , Rating: 3
Having worked there in a non union position I can easily say that yes the "Union" caused problems for the company. I actually witnessed the problems to be more of weak and enabling upper management in the first place. I had the glorious position of a security guard while finishing Grad school. A few employees would steal something and get caught and lower management would fire them. Then somehow these thieves would get their jobs back and the manager that backed us up would be fired and sometimes the security would too.

I really blame the upper management for letting that stuff get out of hand and a few players just punch in and leave for the bars. IF management wanted GM to succeed then they would have stood up to the Union and say NO. Yes the fear of strikes, yadda, yadda, yadda... but every contract has rules for removal and every case could be done so it follows it and cover managements' hind end.

The bottom line is that upper management didn't want to shake the boat and therefore destroyed a great brand. I really do hate the way unions are picked on like they are a cause of all the problems. Yes they can cause problems but ultimately the ones in charge are the ones that allow it.

RE: No Plan B
By MonkeyPaw on 10/1/2009 5:52:32 PM , Rating: 1
Then somehow these thieves would get their jobs back and the manager that backed us up would be fired and sometimes the security would too.

That's not management's fault entirely. Union contracts are often so restricting for the employer that these guys can get away with virtually anything. I work as a manager where pretty much all of the labor is union, and there aren't too many things that can get a guy fired permanently. I can't tell you how many guys have bombed the random drug test, yet still work. I also can't tell you how many guys make huge mistakes and not even get suspended for a day. Punishments are limited. It makes you wonder why a company would ever have negotiated with a union in the first place. I have to think that the reason is that things weren't like this when it started, but over the years, strikes and concessions have made the workplace an unhappy, unproductive place where no one shows any initiative.

The irony is that around every election time, the union "encourages" members to vote Democrat. Now the Dems are set to ram a largely partisan health care plan at us, one that is set to tax high-benefit insurance policy holders. Guess who has those? Union employees! Should it pass, that will be a major blow to the union-democrat relationship.

RE: No Plan B
By christojojo on 10/1/2009 9:43:50 PM , Rating: 2
Yeah The union that I used to belong to send me these emails telling me how it is making competition by forcing a high tax health plan on us. Yeah I know the rhetoric says it will be low cost but this is the government. Nothing stays low cost and nothing stays the way it was. NYS where I live they had one of the "world's best psychological care systems in the world" was shut down they sent some to group home; the rest they let loose on an unsuspecting society. Those release instantly cured patients once in a while throw people into the paths of subways, kill for no reason. But they they are cured right?

I just see the same happening to the health system. Government should regulate and police not ration and take over private concerns. I am for public ownership of prisons but do you really want your children treated the government?

RE: No Plan B
By Zingam on 10/1/2009 7:18:06 PM , Rating: 2
Are Unions Mafia?

RE: No Plan B
By Reclaimer77 on 10/1/09, Rating: 0
"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs

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