Saturn Spearheads GM Turnaround

[Flybrian]

Saturn leads GM's turnaround effort
By TOM KRISHER, AP Business Writer | Thu Feb 8, 6:20 PM ET
Link to Original Article @ Yahoo!

CHICAGO - To peek into the future of the General Motors Corp. turnaround plan, just look at Saturn.

Last year, when GM's sales skidded 8.7 percent, Saturn's rose by 6 percent. By fall, the small brand that used to call itself "A Different Kind of Car Company" will have a lineup that's almost completely new, with no models older than 20 months.

Simply put, if Saturn falls from orbit with all its new vehicles, GM likely will follow.

"It's a no-excuses product lineup," GM Vice Chairman for Global Product Development Bob Lutz said in an interview with The Associated Press at the Chicago Auto Show. "I told the sales and marketing guys if this lineup doesn't work, I'm out of ideas."

Saturn, started in 1990 as GM's small-car answer to the Japanese automakers, is the canary in the mine for the company's desperate effort to make itself smaller, leaner and faster to better compete with the enemy, mainly Toyota Motor Corp.

Last year, GM's U.S. sales dropped to slightly more than 4 million vehicles from roughly 4.5 million vehicles in 2005. Toyota, which seemingly can do nothing wrong in the U.S., reported its best year ever in 2006, with sales up 12.9 percent to about 2.5 million vehicles.

Just two years ago, Saturn was the metaphor for all of GM's ills. It's products were old and tired, and what once was a hot brand had been allowed to languish as the company ignored cars and focused on big-profit trucks and sport utility vehicles.

At the same time, gas prices rose and GM didn't have many desirable cars while Toyota did. GM lost market share and buckets of money, $10.6 billion in 2005 alone. There was talk of bankruptcy.

All the while, GM was trying to fix itself. It started cutting costs, inducing upward of 34,000 expensive hourly workers to leave through buyouts or early retirement offers. By the end of last year, it had cut $9 billion in annual costs, about $2,000 from every car it sold. It has promised a profit in the fourth quarter, the first one in two years.

Roughly, 18 months ago GM also began to replenish Saturn.

Saturn got the Sky roadster, a sleek two-seat sports car. Later came the Vue small sport utility vehicle with a hybrid gas-electric version, and the Aura mid-sized sedan. The Astra, an Opel-based small car to replace the aging Ion, was unveiled Wednesday in Chicago.

Lutz said the new models will put pressure on Saturn managers to beat last year's 6 percent gain in 2007, even though the overall U.S. market may be flat or down.

"There is now not a weak sister in the batch," he said of Saturn's products. "Everything is top-notch from a design and execution standpoint," he said.

Mark LaNeve, GM's vice president for sales, service and marketing, said GM's products should all be substantially new in another 12-18 months. Key is the redesigned Chevrolet Malibu due out later this year to take on Toyota's Camry.

But it will take a while longer for the company to get its message to consumers as it rolls out competitive entries in the small and mid-sized car markets, LaNeve said.

"We're not going to have it solved in the next 12 to 18 months," he said.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said GM's cost-cutting efforts have enabled it to put more money back into products and be more disciplined on prices. He thinks GM's positive results will accelerate as more new products hit showrooms.

"I think we're going to see profitability that is going to surprise a lot of people," Cole said.

But David Koehler, a marketing professor at the University of Illinois at Chicago who has studied GM, said while its products have improved, it still has to overcome its old image of lacking fuel efficiency and quality.

"The story remains to be told if they are able to reposition that image," he said.

His students, Koehler said, still believe Toyota has the edge in quality and gas mileage, and that's the market GM must win over.

Lutz, a frequent critic of media coverage, said part of GM's difficulties is that the media portrays the company inaccurately.

Some media outlets, he said, always use the "gas-guzzling" prefix to describe GM vehicles, but fail to do so on large Toyotas that get worse gas mileage than their GM counterparts.

"People are starting to think a little bit before they automatically fall into the conventional, easy categorization of Toyota — wonderful, smart, consumer focused, energy saving. GM — dumb, insensitive, big trucks, gas guzzlers, don't give a damn about everything. We're starting to crack that open a little bit," Lutz said.

Toyota is well aware that GM has momentum. Its new cars are winning awards, and to Jim Press, president of Toyota Motor North America, the new Malibu was the top car at the big auto show in Detroit.

"You just go down the list of things to do right that they're doing, and to some extent you have to do those right things and then you hold on and you wait for the rain to stop," Press said. "And I think the rain is starting to stop."

At present, though, even GM concedes Toyota has consumer preference down.

"They're winning, no question," LaNeve said. "They're on a big roll the last year-and-a-half or so. But we've made great progress, so it's not like there can't be more than one successful car company in the world."

[regfootball]

"It's a no-excuses product lineup,"

Saturn Astra only has 4 speed automatic. Plus there's no BIG TIME mpg champ in the Saturn lineup.

"There is now not a weak sister in the batch," he said of Saturn's products. "Everything is top-notch from a design and execution standpoint," he said.

New Vue looks too Daewoo. Some interior plastics on all its models are still cheap. Still work to do. But yes, overall, if Saturn can't change minds, then I don't what much else GM can do.

Edited February 9, 2007 by regfootball

[thegriffon]

Saturn Astra only has 4 speed automatic.

So does the Corolla.

If Lutz has run out of ideas, I have some. To start with a certain lower-midsize 4-cylinder sedan, and second a couple of 1.6 L engines.

[maynard]

So does the Corolla.

If Lutz has run out of ideas, I have some. To start with a certain lower-midsize 4-cylinder sedan, and second a couple of 1.6 L engines.

Out of ideas? How about getting rid of that astra interior. That soupy-dreck doesn't come close to that of its rivals. Anyone who thinks otherwise is kidding themselves.

[regfootball]

So does the Corolla.

If Lutz has run out of ideas, I have some. To start with a certain lower-midsize 4-cylinder sedan, and second a couple of 1.6 L engines.

doesn't the rabbit have a 6 speed and a five banger?

[frogger]

Out of ideas? How about getting rid of that astra interior. That soupy-dreck doesn't come close to that of its rivals. Anyone who thinks otherwise is kidding themselves.

The interior does look like something that would have looked fresh in 2001, not 2008. The car had its debut at a 2003 car show.

[AxelTheRed]

"Simply put, if Saturn falls from orbit with all its new vehicles, GM likely will follow."

I'd stop short of saying that. GM is healthy enough where the success of Saturn isn't going to make or break the company.

[Dsuupr]

Saturn leads GM's turnaround effort

Mark LaNeve, GM's vice president for sales, service and marketing, said GM's products should all be substantially new in another 12-18 months. Key is the redesigned Chevrolet Malibu due out later this year to take on Toyota's Camry.

New Cobalt is on it's way.

Hopefully a redone G6, G5, LaCrosse . . .

[Mule Bakersdozen LS]

Isn't the Aura doing well? And the Outlook and Sky (and Aura) are getting good press, right? Sure, the VUE is weak compared to the other new Saturns, but next to the aging/abominable/mediocre Ford Escape, Jeep Compass, and Honda CR-V competition (and the rest of the compact crossover SUV class), I'd say its got a pretty good chance at success and one of the class' better offerings. The Astra has a lousy Opel interior from the pics and a 4-speed automatic transmission, but aren't the rest of the compact cars still saddled with second or third-rate interiors (Cobalt, Focus, etc.) and 4-speeds? If there's any division that should be on death watch, its Pontiac, not Saturn. But, I think the G8 has a chance at success, not just with the enthusiasts crowd that will never be buying anything like that for a long time (like me), but with people who might actually buy the G8.

[enzl]

Isn't the Aura doing well? And the Outlook and Sky (and Aura) are getting good press, right? Sure, the VUE is weak compared to the other new Saturns, but next to the aging/abominable/mediocre Ford Escape, Jeep Compass, and Honda CR-V competition (and the rest of the compact crossover SUV class), I'd say its got a pretty good chance at success and one of the class' better offerings. The Astra has a lousy Opel interior from the pics and a 4-speed automatic transmission, but aren't the rest of the compact cars still saddled with second or third-rate interiors (Cobalt, Focus, etc.) and 4-speeds? If there's any division that should be on death watch, its Pontiac, not Saturn. But, I think the G8 has a chance at success, not just with the enthusiasts crowd that will never be buying anything like that for a long time (like me), but with people who might actually buy the G8.

Aura sold 4k units in Jan.

Outlook about 1K, IIRC.

They'll be up around 8k combined in Summer

Saturn is GM's Canary in the Coalmine, IMO.

[Ravenfreak13]

Saturn is doing just fine...they just need time to get their products out into the market...it's still pretty early in the whole saturn turn around thing...i just wish that they would advertise more.

[ketch]

OK, ok, as long as they give it time to 'take' with customers, as they didn't with the 'new' Oldsmobile.

[drew770]

GM has alot riding on the Saturn train and if the new Saturn products don't take off then GM will be in trouble. But, I think the focus has to be on Chevy and Cadillac the two bookends for GM. Chevy needs a lambda minivan among other products and Caddy needs alot more products such a sports coupe and a convertible to truly compete with Lexus and BMW and until Chevy & Caddy gets these much needed products GM will have to fight tooth and nail to keep Toyota out of the #1 spot.

[FUTURE_OF_GM]

Simply put, if Saturn falls from orbit with all its new vehicles, GM likely will follow.

I don't really believe that as truth... WE all know which division is vital, financially, to GM's success and it sure as hell isn't Saturn.

"It's a no-excuses product lineup," GM Vice Chairman for Global Product Development Bob Lutz said in an interview with The Associated Press at the Chicago Auto Show. "I told the sales and marketing guys if this lineup doesn't work, I'm out of ideas."

I would tend to agree, in that the line up is excellent and SHOULD resonate with buyers. If it doesn't, then america has turned it's back on the domestics for good. On the other hand, I'm sure SOME excuses and improvements are needed, as nothing is or ever will be perfect. What about the slightly bland Astra interior? Or the non-enthusiast exclusive 3.6L in the new Vue RL? What about the interior of the Aura?

There will ALWAYS be some excuse, because there is always room for improvement.

Just two years ago, Saturn was the metaphor for all of GM's ills. It's products were old and tired, and what once was a hot brand had been allowed to languish as the company ignored cars and focused on big-profit trucks and sport utility vehicles.

Funny thing is, I can remember when Saturn was supposedly "In jeopardy of being phased out" according to some on this board. Now it seems to be the frontrunner for the new GM. In a way, it's exactly what Oldsmobile was in it's heyday. A platform for GM to bring some of it's best engineering and features to the consumer in a slightly more profitable package than Chevrolet.

Lutz said the new models will put pressure on Saturn managers to beat last year's 6 percent gain in 2007, even though the overall U.S. market may be flat or down.

I just wonder how big this Saturn push will eventually become... Could it be that in 10-15 years Saturn will replace Chevrolet as GMs volume leader? I doubt it, but nothing seems far fetched since it hass less stigma than most GM divisions.

But it will take a while longer for the company to get its message to consumers as it rolls out competitive entries in the small and mid-sized car markets, LaNeve said.

"We're not going to have it solved in the next 12 to 18 months," he said.

YES!!!! As long as GM keeps this mindset, then all is well! It's going to take patience.... People aren't just going to throw down the Toyotas and Hondas overnight. The fact the GM is established well WILL help, but the key to success is definitely STRONG products, one right after the other. GM cannot afford to left up on the throttle one bit if they want to maintain the attention of the public and convince them that this isn't their fathers GM.

But David Koehler, a marketing professor at the University of Illinois at Chicago who has studied GM, said while its products have improved, it still has to overcome its old image of lacking fuel efficiency and quality.

"The story remains to be told if they are able to reposition that image," he said.

I really hate this guy and his negative ass 'tude. But he does have a point. GM needs to rework it's image as much or MORE than it is reworking it's products.

His students, Koehler said, still believe Toyota has the edge in quality and gas mileage, and that's the market GM must win over.

Because just like everyone else, they believe EVERYTHING they read... It's impossible to change an image that the media won't let die. Not to mention it's impossible to overcome the CONSTANT propaganda that Toyota and the asians in general are better all around.

Lutz, a frequent critic of media coverage, said part of GM's difficulties is that the media portrays the company inaccurately.

The media sucks... I know it, you know it and they know it.... 'Nuff said.

"You just go down the list of things to do right that they're doing, and to some extent you have to do those right things and then you hold on and you wait for the rain to stop," Press said. "And I think the rain is starting to stop."

As nice and sincere as that seems.... Press can still kiss the fatest part of my ass.

GM needs to think of Toyota in the same terms that Toyota thinks of GM...... DESTROY ALL

Edited February 11, 2007 by FUTURE_OF_GM

[Northstar]

Aura sold 4k units in Jan.

Outlook about 1K, IIRC.

They'll be up around 8k combined in Summer

Saturn is GM's Canary in the Coalmine, IMO.

They better be up higher than 8k/month. That's less combined than what they want the Aura to sell.

Saturn may take some time to catch on, but there were loads of people looking at them at the show. There were lines to get in everything except the Ion. The Outlook was absolutely crawling with people... they were folding down the seats, sitting in all the seats, looking it over several times, etc. All of them thought it was great.

[Ravenfreak13]

It's gonna take time...its a miracle that saturn was able to do what it did in so little time.

[C.H.U.D.]

Lutz is old. Of course he's gonna run out of ideas. He probably won't be around GM for too much longer.

[Intrepidation]

I've seen a lot of Auras lately, they seem to be doing well in my area.

[ponchoman49]

Lutz is out of ideas. Thats rich! I could come up with 20 ideas right now that would increase sales of each GM brand and the number one idea: quit copying Toyota and other Asian manufacturers styling and blandness. If people want a dull bland looking appliance they more than likely will buy a Toyota. Styling american cars like Asian cars will not increase sales. Making american cars reliable, bulletproof and solidly built like most Asian cars used to be will help sell cars and build a quality reputation. Lutz has helped GM's interiors for the most part and introduced a few halo cars yet 3800's, 4 speed automatics, constant cost cutting(no glove box lights, floor shift indicators, bodyside moldings, trunk key cylinders etc), goofy option packages, lack of product for Buick and Pontiac still exists even with over 5 years at the helm. The new 2008 Chevy Malibu is a classic example of what is wrong at GM right now. It looks like a Camry or VW and brings nothing new to the table for styling. It's interior looks pretty but is plagued with all the same old problems the Epsilon has faced since 2004 and we all know what those problems are. It gets a stretched wheelbase from the current car yet LOSES space on several interior dimensions! It doesn't offer several high tech features that todays computer/technology generation are looking for such as a touch screen NAV or keyless start. It gets a larger base engine but with less power than any 2007 version of the Ecotec 2.4. It's top and only engine option, the 3.6, brings plenty of power to the table but it has less power than the Camry, Altima, 2008 Taurus/Sable and probably the new 2008 Accord too. Worse it gets lower gas mileage than most of those competitors even before the new 2008 mileage standards are even factored in with a 28 highway rating from it's 2007 Aura counterpart. And the worst part of the redesign, no Max or wagon version. I have a bad feeling that once the newness wears off this car and people start to realize that it is yet another stop gap from GM, it will soon wither and fade away as another has been that will always finish near the bottom of most comparisons. Compromise good enough cars will never win sales over from the competition. First class, no excuse vehicles with cutting edge technology, powertrains, better not worse fuel economy, high quality and style will ultimately sell the product in the end. And this is the root of my dissapointment with many newly introduced vehicles.

[FUTURE_OF_GM]

I've seen a lot of Auras lately, they seem to be doing well in my area.

I agree, but I think more than anything else (In this area at least) is the clientele that seems to be buying the Aura. They all look like people who would normally be driving an Accord or Camry. Maybe GM has finally managed to crack that ellusive market!

P.S. And I'm sure Lutz isn't "out of ideas" it was probably just a figure of speech.

Edited February 12, 2007 by FUTURE_OF_GM

[Regalguy01]

Lutz is out of ideas. Thats rich! I could come up with 20 ideas right now that would increase sales of each GM brand and the number one idea: quit copying Toyota and other Asian manufacturers styling and blandness. If people want a dull bland looking appliance they more than likely will buy a Toyota. Styling american cars like Asian cars will not increase sales. Making american cars reliable, bulletproof and solidly built like most Asian cars used to be will help sell cars and build a quality reputation. Lutz has helped GM's interiors for the most part and introduced a few halo cars yet 3800's, 4 speed automatics, constant cost cutting(no glove box lights, floor shift indicators, bodyside moldings, trunk key cylinders etc), goofy option packages, lack of product for Buick and Pontiac still exists even with over 5 years at the helm. The new 2008 Chevy Malibu is a classic example of what is wrong at GM right now. It looks like a Camry or VW and brings nothing new to the table for styling. It's interior looks pretty but is plagued with all the same old problems the Epsilon has faced since 2004 and we all know what those problems are. It gets a stretched wheelbase from the current car yet LOSES space on several interior dimensions! It doesn't offer several high tech features that todays computer/technology generation are looking for such as a touch screen NAV or keyless start. It gets a larger base engine but with less power than any 2007 version of the Ecotec 2.4. It's top and only engine option, the 3.6, brings plenty of power to the table but it has less power than the Camry, Altima, 2008 Taurus/Sable and probably the new 2008 Accord too. Worse it gets lower gas mileage than most of those competitors even before the new 2008 mileage standards are even factored in with a 28 highway rating from it's 2007 Aura counterpart. And the worst part of the redesign, no Max or wagon version. I have a bad feeling that once the newness wears off this car and people start to realize that it is yet another stop gap from GM, it will soon wither and fade away as another has been that will always finish near the bottom of most comparisons. Compromise good enough cars will never win sales over from the competition. First class, no excuse vehicles with cutting edge technology, powertrains, better not worse fuel economy, high quality and style will ultimately sell the product in the end. And this is the root of my dissapointment with many newly introduced vehicles.

Why don't you tell us how your REALLY feel, lol.

I'm teasin'. I agree with much of what you expressed.

[Mule Bakersdozen LS]

What's wrong with bodyside moldings? I agree on many of your parts, but if you've seen the new Chrysler Sebring or Dodge Avenger-those cars look really bare without bodyside moldings, IMO. How the heck did the Malibu LOSE interior space despite a 6-inch LONGER wheelbase? What is up with that? That's inexcusable!

[ponchoman49]

What's wrong with bodyside moldings? I agree on many of your parts, but if you've seen the new Chrysler Sebring or Dodge Avenger-those cars look really bare without bodyside moldings, IMO. How the heck did the Malibu LOSE interior space despite a 6-inch LONGER wheelbase? What is up with that? That's inexcusable!

AT least the new Avenger/Sebring offer bodyside moldings as an option. I saw models with and without at our local car show. It looks like the new 08 Malibu doesn't even have them on the top LTZ model which sucks. Not only does the molding break up the blandness of the doors but it also protects the middle of the door sides where most other car doors meet yours when opened. I have seen tons of 06 Ford 500's that had there moldings deleted part way through 2006 with up to 6 door jams where the moldings used to be. This look horrible. The current Monte Carlo seems to fare even worse. Toyota introduced the current Avalon and Camry without bodyside moldings and according to 2 local dealers got so many complaints that Toyota now offers a $195.00 option for both cars and most everone delivered has them. The smooth plain look is ok on some sports cars but not on ever god forsaken new model that comes out. It's one thing to not like all the plastic cladding of the 90's but to strip off trim and decontent every single new model is ludicrous in the extreme.

[aaaantoine]

How the heck did the Malibu LOSE interior space despite a 6-inch LONGER wheelbase? What is up with that? That's inexcusable!

I can think of one good reason for this.

In light of recently introduced side impact testing, the engineers are going to thicken the doors and pillars for the sake of better side-impact crash ratings. The consequence? Either the car is going to be wider or the cabin is going to be smaller. Possibly both.

But then again, there are a lot more things that are involved in engineering a roomy passenger compartment than just the door thickness.