Brilliant plan to kill any nuggets of goodness that you might possess. Like Saturn. And Saab. Yeah, just sit by idly and allow those brands to wither on the vine, but please do keep filling up your dealer lots with more of those oh-so-desirable and oh-so-profitable (thanks to very little R&D work needed, ’cause it’s Same Shit, Different Day) SUVs.

Good night, GM…

As I remember it, Saturn, and the purchased EDS, came about because Smith wanted to show the entrenched interests what’s what. Which, of course, means I agree Smith had some idea of what was wrong, but it also means I think he lacked the willingness to take constructive action about it. The entrenched interests were his salaried employees, whom he was free to unentrench, if he was willing to take a risk on the reasonableness of his own diagnosis of GM’s ailments.

Good point, and we can never know what happened in alternate universes where different decisions were made. In this universe we know that Saturn was created as a desperate attempt to start over and that it didn’t work out. We also know that the other GM brand problems never got sorted out. My position is that in the 1980s, as now, the last thing GM needed was yet another brand to attempt to differentiate and sell.

Also, the original Saturn cars were perhaps marginally better than the Vega and Chevette, but they were still nothing special.

I can’t completely disagree with Axel. Had the compact Saturns of the 1990’s been upgraded just enough to compete with the Civic & Corolla of today they’d be selling, but only because of high fuel prices.

I still contend that a large portion of their original customers bought because they didn’t know Saturn was GM. 10-15 years later it’s hard to hide that fact and the bad stigma of GM is hard to shake. The only people I know that drive domestics are either retired or drive company fleet vehicles. Saturn was a good way to dupe people into buying a domestic and could actually change GM bias if the cars were better than the foreign competition. Sadly, they weren’t.

…combined with a heavy dose of MBA-induced beancounterism…

Paul Niedermeyer : GM wasted well over $10 billion on Saturn.

It’s hard to put figures on it. I’ve never found an official accounting of it, and I doubt that I ever will. The best estimates I can find was that Roger Smith’s startup costs were about $5 billion. Since then, Alex Taylor of Fortune estimated back in 2004 that the total tab at that time was about $15 billion. So who knows, maybe we’re up to $16-17 by now?

jurisb : The reason US manufacturing is dying is because of lowering standards of engineering. As more and more is outsourced, there is no need for skilled engineers, no engineers, no schools for them, no jobs, no place to build expertize and experience.

To be frank, I don’t see any proof of this at al But in the case of General Motors, there has been a decline, and the reasons go back to Alfred Sloan. When Sloan became CEO during the early 1920’s, GM was at the brink of failure and lagged well behind Ford. Sloan revolutionized the business by prioritizing styling and market positioning over engineering. Sloan managed to quietly kill off early GM experiments with air cooled engines, worked with Du Pont to add color to the bodies, and differentiated the brands based upon pricing tiers and style.

This lesson stayed with GM throughout Sloan’s leadership. I believe that this attitude lingers until this day. They believe that American consumers are uninterested in engineering advances, so they do not want to invest the money to provide them because they do not believe they will gain from the investment. Obviously, this attitude is wrong, but old habits die hard.

John Horner : Saturn, like almost all of Roger Smith’s ideas, was a bad idea from the start and has only gotten worse over time. All of the capital to start Saturn came at the expense of the existing brands. GM needed to build great cars to compete with Toyota … but they didn’t need to start another division. Many tactical errors have indeed been made along the way, but the core problem is that the strategy was flawed from the start. GM needed to compete with imports, true. But creating a special division to do so missed the point.

It’s easy to criticize Roger Smith for his failings. Hell, I just spent 800 words doing it. But a little historical context is in order here. When Smith started Saturn, GM had had one failure after another in building a successful small car. The failures were expensive and disastrous for the existing brands.

Smith faced a couple of serious challenges. There were brands that had lost substantial value with notorious, well publicized failures. Not only that, but a lot of the problems were due to the bureaucracies across GM and how they interacted with each other. The track record of failure within the divisions was substantial and costly in terms of both cash and brand equity. A new brand was probably necessary just to get consumers to look at the cars, and an effort needed to be made to remove the usual fiefdoms from the design process.

Smith made a lot of errors, no doubt. But working within the existing organization had also failed. Reinventing the existing brands would have been easier said than done. The legacy of General Motors has left a massive web that remains difficult to mend. To this day, no one has really found a solution. Amazing, when you figure that they have had forty years to get one.

David Holzman : Given that the one design of the original made it almost to 300,000, that showed it was a very successful idea. Nothing since has come close. My understanding was Roger Smith’s original idea was to watch Saturn, and gradually remake GM in Saturn’s image.

The 500k sales target wasn’t entirely arbitrary. The sales level was needed to turn a profit. In this market, it’s really impossible to sell 500k of any single car. Saturn would have needed two or three successful vehicles just to hit this number. That alone was reason enough to add another vehicle. Otherwise, there was not much reason to start a brand to sell a single vehicle.

I knew about Saturn trough the Net a few years ago. I have never seen a Saturn in the flesh, only pictures. I am a “virgin” regarding the reliability and handling of those cars. I know only about the looks.

I must say those cars (Saturns from the 1990s) seem to my european eyes esthetically very, very attractive. Just the “high-tech” image that Citroën used to cultivate (DS, GS, CX…) but without (AFAIK) the complexities with which Citroën overburdened those cars.

Plastic panels…just brilliant.

I would be interested in cars with that look.

It´s a pity this brand is going down the drain.

is there no creativity left in Hollywood or Detroit?

You can add the “music” industry into the mix…

The pool of originality has dried up many years ago….

Saturn had a good recipe that was ruined by the constant push to bring it “up market” in search for easy profits, and ignorant management that set too high of an expecation of 500k units so quickly (it was set up to fail probably by bickering GM management). GM just didn’t get the fact that building something new takes time, patience, and support.

If GM kept to the recipe and updated the decent cars they had at the time – Saturn would have continued to grow. Instead they were starved of product and refreshed cars, then given plastic paneled GM cars that did not fit their image, then simple badge engineered Daewoo/Kia (1st Gen Vue)

Given that the one design of the original made it almost to 300,000, that showed it was a very successful idea. Nothing since has come close. My understanding was Roger Smith’s original idea was to watch Saturn, and gradually remake GM in Saturn’s image.

United Airlines and Delta both recently tried the same bone headed idea. The opened new divisions (Ted and Song) to compete with discount airlines. Both efforts are now dead. The time, money and people which were wasted on Ted, Song and Saturn will never come back. Nice work MBAs!

I don’t have proof but from my personal observation of the way people purchase their cars there are a lot of purchase decisions made based on what the neighbors/church members/work associates/family members drive. When the mini-van came to market in the 80’s it didn’t take long before we had one, the neighbors had one, and the church parking lot was filled with them. In the 90’s it was SUV’s and now I notice quite a few Toyota and Hondas populating the parking spaces and driveways which were one home to the SUV and mini-vans.

This is to say that the vast majority of the car buying public does not make their purchase decision solely on the features of a particular make and model as we car-types do. Rather there are the influences of their social circle and people within their social network. That being said, those of us that know and love cars may have influenced others in ways that we are now beginning to regret.

My parents gave me an $11K, 1999 Saturn SL as a college graduation present. Nine years and 181K miles later, it shows no sign of stopping, and has required nothing more than tires, brakes, one clutch, and a new set of fuel injectors. It STILL gets 40 MPG on long road trips (down from 43-44 in its heyday). I can still (thanks to the manual 5-speed) get from 0-60 in under 9 seconds.

Inflation adjust that for today. Name me a $15k compact (NOT a cramped subcompact) that runs forever, gets 40+ highway, and isn’t a total cheap piece of junk. The Corolla and Civic have blinged and bloated themselves up $3K and down 5 MPG. The Yaris is a cramped subcompact. The Cobalt is a joke. The Versa gets worse mileage than a Civic. The Rio/Accent comes close, but then again, the mileage thing. Any Fit you can find is going to run well over $16K.

Can you imagine if Saturn stuck to what it was doing, and today had an updated, evolved version of its 1999 lineup? Decent, reliable, efficient transportation? Cars with NEW EPA ratings of 40/30? They’d be selling cars as quickly as they could make them. The SL, rather than the Civic, would be America’s #1 car. No question.

(To bolster my point: in the past year, the KBB of my 1999 SL has doubled from $1250 to $2500. And I ain’t giving it up even for that price.)

But then, that would require strategic planning and an attention span longer than a financial quarter.

A friend’s mother had 2 Saturns. I rode in her SL2 a few years ago and it seemed like a decent car overall. If GM were to update the SL1/SL2 designs and fix the problems that plagued those models, they might actually be able to offer an economical small car that people want to buy. Evolution, not revolution. I just don’t get why GM brings out so many new models. But I guess they have to change the names to make people forget what POSs the defunct models were.

At that time most people didn’t even know Saturn was part of GM, especially my mother. She honestly thought that she was buying a Japanese import. Inside it did kinda look like a Toyota, if you looked past the uber cheap plastics.

100k miles later the thing was on its death bed. Literally falling apart. So I took Mom out to look at cars again. On the list was the new larger Saturn models and well at stop at the Honda dealer and then onto Toyota. After being somewhat satisfied by the 2000 model year offerings of Saturn she drove the Accord and bought it on the spot without even testing the Toyota lineup.

Never in the realm of thought was other GM offerings like Chevy, Buick, etc. Mom had a crap Olds in the 80’s and wasn’t going back to them. Still contend that GM was onto something making a car that people didn’t know was GM…their failure was not improving the brand. If the new Saturns could compete with the Honda they might have sold one more.

Surely, GM should have dualled the Saturn and Saab dealers once it bought Saab, enabling people to move up to something more Saturn-like?

Actually, that’s how the dealers are set up in Canada. In fact they were Saturn/Saab/Isuzu dealers. I think most of them dropped the Isuzu name, leaving them as Saturn/Saab only.

Folks wanting to move up from Saturn probably wouldn’t want to go to GM products just because Saturn was owned by GM, in my humble opinion.

Oh well, it’s probably too late now, anyway. Too late for Saturn, Saab and soon, too late for GM.

BTW someone commented that pretty much all cars look alike now except the Prius?

Well, imitation being the sincerest form of flattery, I was sitting with a Honda salesman (who know I like my 2008 Prius and won’t be selling it any time soon but also knows we’ll be in the market for a car in a year to replace my wife’s leased car) and he showed me an official for dealer use only rendering in color, of the as-yet unnamed Prius competitor coming next year.

It looked like a current Prius with a Honda grill. It was a 5 door hatchback.

However, the engine and tranny were failing at around 100k (could have been because I beat the hell out of it), and I had a piece of plastic, that as far as I could tell, fall off on the highway. It was also really noisy (wind, tire, and road noise), but it should be said that the noise never bothered me. I just realized how noisy it was after driving an S2000 at highway speeds and noticing how quiet it was compared to my car, despite being a convertible. And turning at ~3500 revs.

If GM could have taken the positives from the SL1 and improved on the negatives, they would have had at the very least a competitive small car.

That kind of thinking is what is killing GM. Every brand tried to be all things to all people. The upgrade path for Saturn customers should have been Buick, Olds, or Cadillac.

On the contrary, Saturn should have stuck to its niche and specialized in funky, inexpensive, small quality cars for young or “different” buyers. A lot like Toyota is attempting to do with the Scion brand. If they had done it right, then for every customer that outgrew Saturn, 2 more up-and-coming customers could replace them.

In other words, Saturn should have been to GM what Apple is to the PC industry.

True…We had a new 5-door Astra in the fleet last month…Overall, a nice car that felt very solid and mildly impressive…until I strolled around to the window sticker…$21.5K ?!?! Are you kidding me? For that kind of money one could buy a Jetta/Rabbit and have change leftover…and have a something more like a real European car not a warmed over Opel from GM.

is a real European car, slightly modified to meet US standards and imported straight from Belgium.

If I can respond to a few of the comments. My apologies for not having time to answer all of them -

aje : Saturn had a good recipe that was ruined by the constant push to bring it “up market” in search for easy profits, and ignorant management that set too high of an expecation of 500k units so quickly (it was set up to fail probably by bickering GM management). GM just didn’t get the fact that building something new takes time, patience, and support.

I have to disagree with you here. I actually believe that the problem is the opposite. Saturn didn’t provide its customers anywhere to go or any thing to trade up to. Although the sales channel was well thought out, the product didn’t get nearly the same attention.

The brands that prove to be successful in the middle-class price class usually started at the lower end. Over time, they would gradually introduce vehicles that cost more. They use the entry-level cars to build trust with their customers, who are often younger and willing to take a risk with a new badge in order to save some money. As these buyers age and their needs change, they earn more money and add members to their families, at which point they become candidates for larger, more expensive vehicles.

Saturn left these customers behind. After getting off to a great start, they left them with very few choices and cars that had grown stale. The refresh cycles were too short and new products should have been added. Those customers ended up leaving, and the momentum was lost.

Saturn ended up getting short shrift because Jack Smith was brought in to turn GM around. They decided that small cars were not going to get them there. The SUV plan worked in the short term, and at the time, Jack Smith was heralded as a miracle worker. Today, I think that we can see that Jack Smith’s plan created only short term benefit and also set up the company for their recent problems. When you want to figure out why GM is totally unprepared for today’s market, Jack Smith and his protege Rick Wagoner deserve all of the blame.

geeber : I don’t think it’s fair to single out GM management from that time for being insular and arrogant.

Thanks for the earlier compliment.

I take your point, in that GM is not alone with the superiority complex problem. However, I would argue that GM is actually substantially worse in this regard than other corporations. Within a historical context, I think that we should remember that GM was not just another company. Not only was it the largest corporation in the world, but it also literally invented modern management practices.

Arguably, GM was the first company to operate in a methodical manner, compartmentalized and organized around a structured, deliberate hierarchy supported by committees. Today, this sort of structure is common, in companies large and small. But at the time, this was a highly innovative approach that revolutionized modern business. It had worked so well for GM that Drucker’s book was taken as a slap in the face, especially for Sloan because he had used these strategies to save GM from Durant’s failures and to pass Ford to become #1.

I believe that even today, GM has difficulty getting past the proud but polite arrogance that defined Sloan’s tenure, and that they were much worse than most. Companies like Ford and GE turned to Drucker for guidance, but GM always rejected it, even decades later.

If you haven’t already, I would encourage you to read Drucker’s book. It’s a bit ponderous and at times, overly theoretical. But read back to back with Sloan’s autobiography, it helps to put it together.

whatdoiknow1 : Call Roger Smith a dumb a$$ all you want but he did have a good understanding of the problems that were facing GM in the 1980s. Like it or not Olds, Pontiac, and Buick were already dead by the early 1980s. Quite simply these brands were “played out” for far to many potential and NECESSARY costumers that GM needed. The folks that had moved and were moving to imports no longer desired any type of TRADITIONAL GM vehicles.

I would caution you against giving Roger Smith too much credit. I agree with you wholeheartedly that he was quite right to acknowledge GM’s quality problems, to realize that Toyota had a lot to teach GM, and to recognize that GM would ultimately suffer without a good small car. However, he also blew substantial resources on distracting acquisitions such as EDS, and spent far too much money and effort on automation, when he could have worked on improving labor relations. Smith so loathed the UAW that he invested too much energy in his robots, a decision that literally cost him in terms of cash and product quality. You can like the union or not, but you still need humans to assemble the cars.

KatiePuckrik : GM’s continual hunt for profit (no matter how they’re achieved) blinkered it from looking after itself. GM continually went to rack and ruin, but no-one cared, because they kept raking in easy money; so according to GM’s logic “We’re still making money so our company is still in rude health”.

I’d like to amend that point. GM is guilty of continually pursuing profit margin, not profit. These are not quite the same thing.

Every company pursues profit. If they don’t, they go out of business very quickly. However, GM obviously has a history of coming close to the brink time and time again. I may just have to write an article about this!

Too bad, the Astra is a pretty decent car from what I’ve heard….

True…We had a new 5-door Astra in the fleet last month…Overall, a nice car that felt very solid and mildly impressive…until I strolled around to the window sticker…$21.5K ?!?! Are you kidding me? For that kind of money one could buy a Jetta/Rabbit and have change leftover…and have a something more like a real European car not a warmed over Opel from GM. If you don’t need all the room for the same $21.5K you could get into new Mini-and there’s simply no comparison of the cache’ between an Astra and a Mini. Which one would you buy?

While today’s Saturn lineup has virtually no common traits tying it together as a cohesive ‘brand’ , GM came close to making a unique brand…at first, I maintain that they did have a ‘different’ kind of car company but they neglected it for nearly a decade-Imagine where Saturn would be today if they had morphed the ‘different kind of car company’ into the ‘Green kind of car company’? What if they had become the home of the EV-1? and it kept being produced and evolved? Imagine if they had a hybrid 5-8 years ago and they evolved it as well? Imagine if they kept going with their plastic panels and evolved that into a full-circle recycling program, much like BMW has today? Just think how they could have been viewed today as an industry and societal leader with a little enlightened leadership, and a lot more ‘ears to the ground’ of what direction American society was headed towards…In the words of Maxwell Smart ” missed it by THAT much”…