GM will shut down Saturn after Penske deal falls apart

2009 Saturn Sky X09ST_SK015

This news is disappointing. Saturn has some nice vehicles and a solid dealer network. Hopefully something can be salvaged here.

  

Penske will purchase Saturn from GM

2009-saturn-sky-x09st_sk017

This is good news for the Saturn employee and dealers.

Less than a week after officially filing for chapter 11 bankruptcy, General Motors has announced the pending sale of the Saturn brand to Penske Automotive. The transaction, if completed, would shift the rights of Saturn to Penske, and would continue the sale of the Aura, Vue, and Outlook vehicles under a contract basis with GM.

Although the deal could save more than 350 dealerships and 13,000 jobs, according to GM, it won’t save the slow-selling Saturn Astra hatchback or low-volume Sky roadster. Penske does intend to preserve the customer-focused mentality upon which Saturn was founded in 1990. “Saturn has a passionate customer base and outstanding dealer network,” said Roger Penske, chairman of Penske Automotive Group. “For nearly 20 years, Saturn has focused on treating the customer right. We share that philosophy, and we want to build on those strengths.”

Jon Yanca of Car and Driver goes on to point out that this is a pretty good fit. Saturn might flourish as part of a smaller, more nimble company like Penske as opposed to the bloated “old GM.”

As Newsweek detailed in an excellent article, Saturn was supposed to save GM, but GM ended up crushing Saturn.

Saturn was hardly a panacea. But its fall to earth, more than $5 billion in GM money later, is about far more than the flameout of one brand. In the eyes of some automotive analysts, Saturn represents a major missed opportunity for Detroit to place a sustained bet on fuel-efficient cars that would compete with the Japanese—and to recalibrate the bitter business-labor relationship in ways that could have had far-reaching implications for the entire industry. Saturn was never able to surpass the Japanese in technology, as Smith had hoped. But the competitive knives Saturn faced within GM did far more damage than any threat from overseas: execs who felt the auto giant already had too many brands and factories; dealers resentful of Saturn’s product-development dollars; and a labor union whose leadership came to regard the brand’s workplace innovations as collaborations with the enemy. It did not help matters that from the mid-1990s until just recently, Americans turned away from small cars in favor of trucks and SUVs.

The story is tragic in many ways, as Chairman Roger B. Smith had grand plans for the first new GM brand in 70 years. Unfortunately, Smith’s bold plans at Saturn were not matched by bold reforms at the other brands. Just imagine of someone like Jack Welch had been named CEO of GM back then.

It’s a shame, but now Saturn and GM both get a new beginning, and both have a real chance of prospering in the future.

  

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