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Sun sets
on
Saturn:
GM kills
fading
star
brand
By TOM
KRISHER
and
KIMBERLY
S.
JOHNSON
AP Auto
Writers
For
those
who
expected
General
Motors'
once-funky
Saturn
brand to
live on
with a
new
owner,
there
has been
a sad
twist.
Saturn,
once
billed
as a
different
kind of
car
company,
appears
as dead
as
Pontiac
and
Oldsmobile.
At the
brand's
350
remaining
dealers
around
the
country,
there
were
high
hopes
that a
deal
would be
announced
for GM
to sell
the
brand to
former
race car
driver
and auto
industry
magnate
Roger
Penske.
Instead,
Penske
Automotive
Group
Inc.
announced
Wednesday
it is
walking
away
from the
deal,
unable
to find
a
manufacturer
to make
Saturn
cars
when GM
stops
producing
models
sometime
after
the end
of 2011.
GM then
announced
it would
stop
making
Saturns
and soon
would
close
down the
brand,
just
like it
did with
Oldsmobile
in 2004
and soon
will do
with
Pontiac.
The
day's
events
mean an
almost
certain
end to
Saturn,
a brand
that was
set up
in 1990
to fight
growing
Japanese
imports.
Instead
of
celebrating
a
rebirth,
the
announcements
sent
dealers
scrambling
for ways
to stay
open and
preserve
about
13,000
jobs.
"I find
this
hard to
believe,"
said
Carl
Galeana,
owner of
two
Saturn
dealerships
in
suburban
Detroit.
"Everyone's
been
saying
we're
right at
the goal
line."
Although
GM and
Penske
reached
a
tentative
agreement
to sell
the
brand in
June,
the deal
collapsed
Wednesday
after
Penske
was told
by an
unidentified
manufacturer
that its
board
had
rejected
a deal
to make
cars for
the new
Saturn.
"It was
a
stunning
turn of
events,"
said GM
spokesman
Tom
Pyden,
who
added
that
most of
the
details
between
GM and
Penske
had been
worked
out and
both
sides
expected
to
announce
this
week
that the
deal had
been
closed.
GM had
agreed
to keep
building
three
Saturn
models
even
beyond
2011,
but
after
that,
Penske
had to
come up
with its
own
products
made by
another
manufacturer.
Penske
spokesman
Anthony
Pordon
said
there is
little
if any
chance
that the
talks
could be
reopened.
Without
another
supplier
in place
before
the deal
was
signed,
Penske
couldn't
run the
risk of
taking
on
Saturn,
Pordon
said.
It takes
several
years to
design
new
vehicles
or
engineer
foreign
vehicles
to meet
U.S.
standards.
Penske
would
risk
having
no
products
to sell
once the
GM
contract
expired.
The
French
automaker
Renault
discussed
building
cars for
Penske
but
Renault
spokeswoman
Frederique
Le
Greves
said in
an
e-mail
Thursday
that
"the
conditions
for an
agreement
have not
been
found."
She said
the
decision
was made
by the
Renault
executive
board.
Penske's
purchase
price
was
never
disclosed,
and he
will not
have to
pay a
termination
fee,
Pyden
said.
Penske
shares
tumbled
$1.13,
or 5.9
percent,
to
$18.05
in
premarket
trading
Thursday.
GM will
stop
making
Saturns
as soon
as
possible,
but no
layoffs
are
expected,
said
spokeswoman
Sherrie
Childers
Arb.
Saturns
are made
at
plants
in
Kansas
City,
Kan.;
Delta
Township,
Mich.,
near
Lansing
and
Ramos
Arizpe,
Mexico.
"Those
plants
produce
products
for
other
brands,
and we
think we
can
increase
volume
on those
products
that
will
meet
market
demand,"
Childers
Arb
said.
Saturn
owners
can
still go
to their
dealers
for
service.
They
will
also be
able to
go to a
certified
GM
dealer
once
Saturn
dealerships
close,
GM said.
Stephen
Spivey,
senior
auto
analyst
for
Frost
and
Sullivan,
said he
was
surprised
Penske
had no
alternative
plan for
a
manufacturer.
"There
are lots
of car
companies
in the
world.
I'm
surprised
they had
all
their
eggs in
one
basket,"
he said,
adding
that
other
companies
may
still be
interested
in the
dealership
network.
Penske,
who
could
not be
reached
for
comment,
said in
a June
interview
that
foreign
automakers
would be
key to
making
Saturn
succeed,
but they
would
have to
match
GM's
quality
standards
before
Saturn's
dealer
network
would
distribute
their
products.
Bloomfield
Hills-based
Penske
Automotive
owns the
second-largest
U.S.
automobile
dealer
chain.
The
company
also
distributes
Daimler
AG's
Smart
subcompacts
in the
U.S. and
has race
teams in
the
IndyCar,
NASCAR
and
Grand-Am
series.
Galeana
said
he's
heard
nothing
yet from
GM or
Saturn,
but if
the plan
is to
phase
out the
brand
and cut
the
products,
he'll
have to
come up
with
other
options.
"I
assumed
if
you're
at the
goal
line,
those
things
would
have
been
figured
out," he
said
Wednesday.
"We're
going to
try to
put some
plan Bs
in place
at this
point."
Galeana
said
he's
concerned
for his
employees
and
still
hopes
the deal
can be
resurrected.
"It's
tough
out
there,
but
we'll
keep
fighting.
That's
all we
can do."
GM
Chairman
Roger
Smith
first
unveiled
the
Saturn
brand in
November
1983.
But the
project
was slow
to
develop
and the
brand
did not
officially
launch
until
1990. It
featured
the
iconic
tag-line
"a
different
kind of
car
company"
and
people
were
attracted
by its
low-key
showrooms
and
no-haggle
pricing.
GM's
hope was
that
Saturn,
with its
dent-free
plastic
panels,
would
attract
younger
buyers
with
smaller,
hipper
cars. It
built a
new
plant in
Spring
Hill,
Tenn.,
devoted
to
Saturn
vehicles.
Despite
a
cult-like
following
that
drew
thousands
to
annual
reunions
in
Spring
Hill,
the
brand
never
made
money,
although
the
company
has
never
disclosed
how much
it
invested
or lost.
The
Tennessee
factory
stopped
making
Saturns
in 2007.
Although
it was
retooled
to make
Chevrolet
crossovers,
it's now
scheduled
to
close. A
parts
plant in
Spring
Hill
will
stay
open in
the
short
term,
but its
future
was
unclear.
As GM
focused
more on
high-profit
pickup
trucks
and
SUVs,
Saturn
began to
languish
in the
late
1990s.
Then in
2006,
car
buyers
began to
find
Saturn's
new
models
more
appealing.
But
after a
good
year in
2007,
sales
dropped
last
year as
the U.S.
car
market
withered.
Through
August,
Saturn
sales
were
down 60
percent
from the
first
eight
months
of last
year.
GM has
been
trying
to sell
Saturn
since
earlier
this
year as
part of
its
turnaround
plan.
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