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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: Sorry for Michigan...
By StraightCashHomey on 10/1/2009 5:15:49 PM , Rating: 2
I'm from Battle Creek (west side of the state), and the effects of the auto industry aren't seen as visibly as the east side of the state, although there are parts plants scattered here and there that are definitely feeling the slump.

I was laid off from a factory that produced trailer hitches and brake components for full-sized trucks. Since I was an IT worker for the company, I was able to find another job, but others that were on the assembly line are struggling to find unskilled work.

I was fairly surprised to see all of the opportunities out there, IT included, that are available in Michigan - but it was all skilled labor, and Michigan does not have the largest pool of skilled laborers.

Like an above poster said, Detroit is really struggling, but other cities are probably in the same boat as any other city in any other state.

Life goes on..


RE: Sorry for Michigan...
By 67STANG on 10/2/2009 3:17:07 AM , Rating: 2
IT jobs are plentiful all over the country. If your in IT and you're good at what you do, you have one of the few private sector job roles that is stable-- even in bad economies.


RE: Sorry for Michigan...
By JonnyDough on 10/3/2009 1:36:19 AM , Rating: 2
I'm from Battle Creek as well. :)

In all truth our government is getting funds in the following ways:

Soft money from mega corporations like Ford, Dow Chemical,
Upjohn, Pfizer, Pharmacia, Walmart, etc. (Our governor bends rules for them)

Gas tax (every family here owns a truck, winters are usually drifty)

Po man's (uneducated hick?) taxes including but not limited to: lottery, ciggarette tax, booze tax, gambling. They just put in another huge Indian casino.

Letting local roadways go to a bit more disrepair than normal, while dumping funds into highways.

Possibly slashing military recruiting? They actually closed down a base here recently, I'm not sure if it was Federal or State funded though.


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