GM to sell Saturn brand to Penske dealership chain

[Justin Bimmer]

NEW YORK (AP) -- General Motors Corp. has a tentative deal to sell its Saturn brand to former race car driver and dealership group owner Roger Penske, both companies said Friday.

Penske has signed a memorandum of understanding that would give his dealership chain, Penske Automotive Group, Saturn's 350 dealerships, the companies said. Penske said that he expects to offer all the dealers new franchise agreements and will retain all 13,000 Saturn employees for the immediate term.

"I would expect that the model that we're putting together, the distribution model, will be profitable day one," Penske said in an interview with The Associated Press. "We'll have less costs. We'll not be in the manufacturing side."

Neither Penske nor GM would say how much Penske is paying for the brand. Penske said he expects the deal to close in the third quarter.

Penske Automotive Group also distributes Daimler AG's Smart subcompacts in the U.S., but Smart has its own dealership network and Saturn dealers will continue to exclusively distribute Saturn vehicles, Penske said.

Initially, GM will continue to produce on a contract basis the Saturn Aura sedan as well as the Vue and Outlook SUVs, the companies said. But Penske said he is in talks with manufacturers around the world about building Saturn cars in the future.

"We will be selling as many GM cars -- a many GM-produced cars -- under the Saturn brand as possible," Penske told reporters in a conference call Friday.

GM had announced plans earlier this year to sell the Saturn brand. The car maker launched Saturn in 1990 with the tagline "a different kind of car company." GM's hope was that Saturn would attract younger buyers with smaller, hipper cars to better compete with Japanese imports. It built a new plant in Spring Hill, Tenn., devoted to Saturn production.

The factory had more flexible work rules than traditional GM plants for the employees who built the cars.

Despite a cult-like following that drew thousands to annual reunions in Spring Hill, the brand never made money for GM. The factory stopped making Saturns in 2007 and currently builds only the Chevrolet Traverse.

As GM focused more on high-profit pickup trucks and sport utility vehicles, 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 22 percent last year as the U.S. car market withered.

Today, Saturn production is scattered at plants across the U.S. The Aura is built at GM's factory at Kansas City, Kansas. The Outlook is built in Lansing, Mich., while the Vue is built in Ramos Arizpe, Mexico.

The Saturn Sky roadster is built in Wilmington, Del., but that plant is scheduled to close in July and the model will be discontinued. The Saturn Astra was imported from GM's plant in Antwerp, Belgium, and was discontinued last year.

Penske Automotive will take over the separate Saturn parts factory in Spring Hill, which will continue to make Saturn components.

Penske Automotive owns the second-largest U.S. automobile retail chain by sales and consistently scores high in customer satisfaction surveys. the company also has race teams in the IndyCar, NASCAR and Grand-Am series. Penske received wide acclaim for heading Detroit's successful effort to host the 2006 Super Bowl.

Carl F. Galeana, who owns two Saturn dealerships north of Detroit, said Friday he was thrilled that Penske would be the Saturn buyer.

"Roger Penske is an icon in the business world," Galeana said. "I've worked with him personally. Nobody works harder than Roger Penske."

Galeana said the fact that Penske is interested in Saturn means the brand has value.

"It allows Saturn to get back to its original roots, which is to be an independent car company," he said.

GM, which filed for bankruptcy court protection on Monday, has said it plans to shed its Saturn, Hummer, Pontiac and Saab brands. Earlier this week, GM said it found a buyer for Hummer in China's Sichuan Tengzhong Heavy Industrial Machinery Co.

However, any such deal would require Chinese Commerce Ministry approval, and reports in state-run newspapers Friday said Sichuan Tengzhong had not yet obtained such an approval.

Tom Krisher reported from Detroit.

http://finance.yahoo.com/news/GM-to-sell-S...f-15450535.html

Edited June 5, 2009 by JamesBond

[Justin Bimmer]

It looks like the Captain wants to sell GM vehicles too in addition to others.

This could work out well.

[Drew Dowdell]

He wants to keep the Outlook, Aura, and Vue.

[toesuf94]

So, in reading this, Roger is going to have GM build Saturns for him or "As many GM cars as possible" - so that brings up the question: What cars? The Aura? A Camaro derived car maybe? - a Vue? Roger has a huge tie in with Honda...you don't think Honda would private label cars as Saturns for him, do you?

Then the question begs: Why would GM sell him cars to compete with themselves?

It has been said that Saturn never turned a profit in the 19 years it existed under the GM umbrella...so how is Roger going to turn that around?

[CaddyXLR-V]

So, in reading this, Roger is going to have GM build Saturns for him or "As many GM cars as possible" - so that brings up the question: What cars? The Aura? A Camaro derived car maybe? - a Vue? Roger has a huge tie in with Honda...you don't think Honda would private label cars as Saturns for him, do you?

Then the question begs: Why would GM sell him cars to compete with themselves?

It has been said that Saturn never turned a profit in the 19 years it existed under the GM umbrella...so how is Roger going to turn that around?

It no longer has GM's high fixed costs to deal with, like having to pay for hundeds of thousands of pensions for retired workers. I'm sure that cost was divided evenly between every GM vehicle sold.

Edited June 5, 2009 by CaddyXLR-V

[regfootball]

He wants to keep the Outlook, Aura, and Vue.

unless they bring in the astra from magna now, or the megane from renault, saturn will not have what they most need, a small car.

i would also suggest roger look at returning saturn to better pricing structures.

i wonder how saturn plans to achieve styling and performance consistency with its models being sourced from all over the place.

[Justin Bimmer]

This may very well be the future of the automotive business. You have manufacturing group that makes the cars and engineers them and you have a sales, design and advertisement group that does everything else. Or they can collaborate on this.

Isn't this what dealers have been wanting for a long time. More say in the product. Well, if you own the sales channel, you can tell them what to build.

[Drew Dowdell]

unless they bring in the astra from magna now, or the megane from renault, saturn will not have what they most need, a small car.

i would also suggest roger look at returning saturn to better pricing structures.

i wonder how saturn plans to achieve styling and performance consistency with its models being sourced from all over the place.

or a Samsung built Sentra.

[Robert Hall]

or a Samsung built Sentra.

Maybe they will cut a deal w/ Chery or another Chinese sh*tbox maker to bring over a sedan to be the new S-series.

[Intrepidation]

Would be cool is they used it to bring of the Citroën C5.

[Robert Hall]

Would be cool is they used it to bring of the Citroën C5.

As PSA has stated this week they are considering more JVs or mergers, so who knows?

These are strange days, times of failure and despair, yet also times of new possibilities and opportunties...

[Drew Dowdell]

Saturn Aurora

[gmcbob]

This is good I think. At least personally I'm hoping this means the value of my 2008 Vue won't tank as badly as it could have.

I still think GM should be keeping this brand under their own umbrella though. Despite recent sales declines (which every mfg. is dealing with), the brand has a decent reputation on the customer service end of things. And like I've said before in other posts, Saturn can bring in buyers who normally wouldn't consider another GM car.

Hopefully GM can continue to supply Saturn cars well into the future. It would be pretty sad to see Saturn totally take off (in terms of sales) without GM being able to get a little bit of the credit (and money) from it.

[balthazar]

I don't see so rosy a potential as most. Initially, we've seen these cars already. The name's the same, the cars are the same, the dealerships will be the same. Also, this only gives us more of the same : 'rebadges' to some/many- something 'we' were supposed to be straining to be free of.

I feel this will be a supreme struggle for Penske, regardless of his other successes. I wonder if keeping smart & Saturn apart on the dealership level is any insight into his take on it...

Bringing in any chinese product (if that happens) is NOT going to improve the image of the company, either.

For the dealer & assembly/supplier folks, I hope it works... but from a business sense, I don't see a pot of gold here.

[Satty]

When I heard this on NPR my first thought was, "French automaker" then I started wondering if they would try Opels and Holdens that aren't sold here under NA nameplates.

I dont think either side of this is going to be ok with Saturn selling Pontiac type Chevy rebadges. Isn't GM only supplying the Aura, VUE and Outlook through 2010 or 11?

Edited June 6, 2009 by Satty

[SAmadei]

i wonder how saturn plans to achieve styling and performance consistency with its models being sourced from all over the place.

Hmmm... Saturn badged Holden Commodore and Ute.

It might get my money.

[BuddyP]

Initially, GM will continue to produce on a contract basis the Saturn Aura sedan as well as the Vue and Outlook SUVs, the companies said. But Penske said he is in talks with manufacturers around the world about building Saturn cars in the future.

So basically in a couple years Saturn will be all imports. That's not a deal maker for me. Bye bye Saturn.

[regfootball]

or a Samsung built Sentra.

yuk.

the easiest way for penske to make money on his purchase is called 'insignia' and 'astra', made in canada.

i'll assume roger will actually drive these cars himself before oking them for production.

Edited June 6, 2009 by regfootball

[regfootball]

So basically in a couple years Saturn will be all imports. That's not a deal maker for me. Bye bye Saturn.

in which at that point penske will sell the chain to the chinese companies in waiting that have used the 3-5 years of holdership to further hone their carmaking skills.

i have a feeling whether saturn the brand tanks or not, his investment will make out ok.

[THTom]

So basically in a couple years Saturn will be all imports. That's not a deal maker for me. Bye bye Saturn.

Could Penske still acquire one of GM's plants?

[Satty]

Could Penske still acquire one of GM's plants?

Probably could really cheap, but Penske doesn't have the engineers to develop its own line of vehicles so they would still have to buy whatever they can get an existing company to sell them.

[saturnd00d]

I'm glad that the resale value of my Vue isn't going to go down as much as it could have. I'm also glad that this deal went through. Break away from GM as much as possible.

[regfootball]

Probably could really cheap, but Penske doesn't have the engineers to develop its own line of vehicles so they would still have to buy whatever they can get an existing company to sell them.

'ssangyong' looks like 'saturn' if you squint your eyes enough.

[cire]

Saturn's Next Compact Sedan?:

Link: Renault-Samsung Previews Next SM3 Sedan With Seoul Motor Show Concept

Source: Motor Authority; April 2, 2009

[ZL-1]

Saturn's Next Compact Sedan?:

Link: Renault-Samsung Previews Next SM3 Sedan With Seoul Motor Show Concept

Source: Motor Authority; April 2, 2009

Hmmm... I wonder if that will be the new Megane Sedan... it's rumoured to get a different name when moving to the new Megane platform...

It'd be interesting for 2 or 3 Samsungs models to find their way to the US via Saturn.

[ShadowDog]

So, would this mean they will be US-based dealership network only? That doesn't sound too promising.

[ZL-1]

So, would this mean they will be US-based dealership network only? That doesn't sound too promising.

Penske bought no engineering assets, so Saturn will have to source vehicles from OEMs. I'd say preferably from OEMs that are not present in the US right now.

Edited June 7, 2009 by ZL-1

[Oracle of Delphi]

Penske bought no engineering assets, so Saturn will have to source vehicles from OEMs. I'd say preferably from OEMs that are not present in the US right now.

No manufacturing assets either ...

[regfootball]

yes, that's a megan sedan, although the renault is better looking.

penske is covering his ass quite well to some degree if he does sell this because the megane range includes it all, hatches 3 and 5 door, sedan apparently, and wagon.

thus partially getting back to the spirit of saturn, a line of cars all sort of based off the same deal.

if the intelligentsia is going to tell me i have to drive sushi then i might as well drive a penske brand sushi. at least i would still be telling toyota 'fu' in the process.

Edited June 7, 2009 by regfootball

[saturnd00d]

A whole bunch of news stories just popped up on the front page of saturnfans.com including some videos.

[vt_hokie]

Saturn Aurora

That thing is hideous. It looks like a badly deformed Audi A6.

[vt_hokie]

So basically in a couple years Saturn will be all imports. That's not a deal maker for me. Bye bye Saturn.

Same here, I'm done. All that was saved was the name - big deal. Saturn is just a marketing name that'll be used to sell rebadged imports from other manufacturers. So much for the great import fighter proving that the US could still compete!

[PurdueGuy]

You guys don't know where the cars will come from yet. All that exists right now is rumor, rumor, rumor. If the deal with GM for the Aura, Vue, and Outlook proves profitable for GM, perhaps GM will work to continue to supply at least some cars for a longer duration than just a couple years. Of course, it may also be possible that GM won't be able to supply cars inexpensively enough to be competitive against foreign automakers.

And technically, Penske IS acquiring a manufacturing facility with the purchase - the Saturn parts plant. While they may not be able to make cars, I wonder if there may be interesting ways to leverage the use of that parts plant, or if it will just be used to keep supply parts for past/current models until the federally required timeframe passes.