By on April 16, 2009

Saturn dealers, customers, managers, assembly workers, The Presidential Task Force on Automobiles, what’s left of General Motors and the mainstream media (MSM) would all like to believe there’s life after GM for the moribund “rethink” brand. A group of investors calling themselves Telesto Ventures has stepped forward to enable these champagne wishes and caviar dreams. Their plan: rebrand other people’s stuff and sell them as Saturns. It’s the same sort of plan that saw Americanized Opels in Saturn showrooms—that led to a 58 percent sales drop so far this year, compared to 2008’s miserable 188,004. (Toyota sold 158,884 Priora last year.) It was also a part of Cerberus’ original plan for the bankruptcy-bound Chrysler Corporation. Anyway, the MSM’s down with Saturn’s “rescue.” “While such a business model doesn’t exist today,’ the Detroit Free Press almost warns, ‘Telesto’s backers say the global overcapacity among automakers and the growing number of start-up firms in China and elsewhere would give the reformulated Saturn several possible sources of new vehicles.” Gullible much?

Finding automakers to work with “is not a tremendous concern,” said John Pappanastos, a group spokesman. “It would allow manufacturers not in the United States to launch without incurring the largest expense they would otherwise face, setting up a distribution network.”

Even if you buy this entirely dubious proposition, it raises one important question: Who the hell is Telesto Ventures and why should we believe a word they say? (Google is not my friend.) It’s a question whose primacy seems to have evaded the MSM. Automotive News dances around the issue.

Telesto spokesman John Pappanastos says his group is in discussions with several unnamed foreign manufacturers.

He says Telesto includes a private equity firm, Black Oak Partners LLC, based in Oklahoma City, and several other investors. It’s not clear how much money is backing Telesto and what auto experience the group has.

In the blogosphere, however, writers condemned by professional journalists as “some guy in a basement with a computer” have flagged the flaw in the “private equity saves Saturn” meme.

PE (Private Equity) Database sounds the alarm.

Big press release today regarding strong interest in General Motors’ Saturn unit by“investor group” Telesto Ventures, a consortium of sorts which includes “private equity firm” Black Oak Partners. What’s not being mentioned however, are any specific details on the two groups. The web generally provides a treasure trove of info, but this is the first time Black Oak or Telesto seems to be mentioned anywhere. It’ll be interesting to see if more details emerge on whose behind the names.

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16 Comments on “Mystery Saturn “Investors” Enable Dealer Denial...”


  • avatar
    Detroit-X

    Here we go again: cars are just “brands” like toothpaste. Saturn customers should be smart enough to see through such folly, and reject the brand.

    Who makes the car is your basis for trusting/selecting/buying it. I just don’t see this ‘rebranding’ scheme successful. Just think of a Chrysler or a Daewoo rebranded as a Saturn. Just think of all the dissimilar parts the dealers must stock, or make you wait for while ordered. Just think of the mechanics trying to service such a zoo. You can’t use leopard parts on a hyena.

    This, in such a crowded marketplace which needs less brands to be healthy. I still don’t see big savings for GM, to sell and compete with it’s previous brand (even while making cars for them). It’s a mess. Only the Detroit clowns could think this scenario up.

  • avatar
    roar

    GM has done everything possible to kill Saturn over the years, the other brands have always been concerned it would become to successful. In the last 2 years:
    No compact sedan when that is what the market wanted the most, made up over 40% of Saturn’s sales, you can add 125,000+ sales to last years numbers if Saturn had a compact sedan. Saturn was built on compact sedans and when the market was hot for them GM decided not to have one. Not having a compact sedan at Saturn would be like Toyota not having a Camry.

    Not having a mid sedan for 2 years and then intro the Aura with 2 V6 models, 80% of the mid sedan sales in the U.S. are 4 cly’s, nice miss by GM.

    Intro a large crossover when the market for large crossovers fell off the table and Saturn had zero market identity for this product.

    Intro a 5 door hatch when the market does not want a 5 door hatch and the product was not built for American buyers. Another miss.

    Intro a new compact SUV that is heavy, does not have a 4cly at intro and gets average/poor fuel economy when the market is looking for fuel economy.

    Intro a convertible to change it’s image when what it needed was a solid compact sedan/ mid sedan and a compact SUV.

    GM has done everything in it’s power over the last 4 years to kill Saturn, you cannot intro all the wrong products at all the wrong times with all the wrong attributes and not reach this conclusion. If Saturn has a partner that provides it with real product it will do just fine.

    Roar

  • avatar
    DweezilSFV

    Black Oak Partners. Perfect for “Black Hole Motors”…

    Introducing the 2012 Saturn Ponzi….

    @Roar:What you are saying is absolutely true. Post S Series, the hated ION was Saturn’s best seller. But if the S Series Saturn was the best GM could do with a blank sheet of paper with all it’s resources, how would farming out product manufacture and design and slapping a badge on it make Saturn any more salable than GEO ?

    Unless the new investors have GM’s limitless [err formerly limitless] bank account to subsize it for the next 20 years as has already been done, write “fin” to this nonsense and let it die already. [BTW: I have two of their products in my driveway, so I am not a hater, just a realist. Saturn is done.]

  • avatar
    foolish

    “Their plan: rebrand other people’s stuff and sell them as” …Geo? Anybody else think this sounds familiar?

  • avatar
    GS650G

    So Saturn is to become the Harbor Freight of car sales?

    All these cheap foreign vehicles, they all meet safety and emission standards, right? Parts available and affordable, no? Anything built by 16 year old kids in dimly lit factories surrounded by toxic fumes? Impressively styled cars which get great gas mileage, perform well, look fantastic and have solid resale value, right?

  • avatar
    Steven Lang

    Believe it or not… this could actually work.

    But not immediately. The buyout would have to enable a shutdown of the overwhelming majority of the dealerships. Then more than likely, the venture would have to be unprofitable for several years while the quality of the overseas offerings improve.

    There are also a LOT of complications with these features. Parts, plants, intellectual assets, employee related issues, unions…. I can go on for days on end about the issues at play.

    It can work… but it has to be done with very deep pockets and the most liberal of terms. GM may be willing to offer them. But I doubt if most of the other stakeholders will.

  • avatar
    TTACtruebeliever

    It’s the high car industry IQ of the readers and their posts that keeps this publication the best on the web.

  • avatar
    Rod Panhard

    I’m not sure how this plan is any different than taking another well-known existing brand, and then filling it’s showrooms in two years with products that are designed in Europe and probably made in existing brands factories. Yes, that’s Chrysler.

    I’d heard this plan for “revamping” the auto business more than 10 years ago.

    The difference now? I don’t think Americans want Chinese-made Saturns. I know it’s next to impossible for any manufacturer to redesign and bring to production a vehicle that will leap through all the US government agency hoops within a two-year time frame.

    So what, pray tell, would Saturn dealers sell until their PRC-made econoboxes can squeak past all the government agency tests?

  • avatar
    nudave

    Hmmmm…

    If they can’t sell American Saturns,
    and they can’t sell German Saturns,
    why would anyone think they could sell Chinese Saturns?

  • avatar
    Jared

    As long as Telesto Ventures comes up with some cold, hard cash, then GM should sell Saturn to them. Their business plan won’t work and Telesto Ventures will lose their shirt (just like Cerberus with Chrysler), but as long as their bank transfer clears, then hand them the keys. And most importantly, it will be amusing to watch yet another group of “masters of the universe” financial types get their heads beaten in in the auto business.

  • avatar
    CaliforniaRed

    Black Oak is the family investment vehicle for a major Oklahoma car dealer. Guy has 17 dealerships I think. Ironically, if it’s the group I think it is, they recently closed their 2 Saturn shops.

  • avatar
    dwford

    Can someone tell my why GM would want to sell these “damaged” brands? Wouldn’t that just create a new competitor for them? I would think that they would want to keep ever possible sale for themselves rather than give any up to a new competitor.

  • avatar
    Landcrusher

    Great plan for someone who knows nothing about selling cars. If you source your cars from different manufacturers, then you have to support those totally unrelated cars at the dealership, and the parts inventory cost just shut down your dealers.

    It’s a non-starter (pun intended because the cars will stop working without the parts).

  • avatar
    carsinamerica

    @dwford:

    GM wants to sell these brands because they can’t afford to keep or euthanize them.

    Keeping them is an obvious non-starter. The eight US-sales divisions of General Motors cannibalize each other relentlessly. All of the marketing and product support for GM products has to be diluted three ways. Buy a Malibu! Buy a G6! Buy an Aura! They do this advertising, and maybe it increases the odds that someone will buy one of the three, but they could do better if they didn’t have to fritter away money on three models, with three different sets of trim combinations, and three different noses and tails. TTAC has documented the follies of that plan for years.

    Killing the superfluous brands is too expensive. You have to pay out those involved, most notably the dealer network. It cost $1,000,000,000 to kill Oldsmobile, and that was years ago, and when GM had much better finances than it does now.

    So, if you can’t keep them, and can’t throw them away, you do what anyone would do: sell or give them away, and hope that the next party pays the price when things don’t work out. GM doesn’t want an independent Saturn to compete with Chevrolet: they want Saturn to fail under someone else’s watch, with someone else’s money. It’s schadenfreude, to be sure, but what other option does GM have?

  • avatar
    Runfromcheney

    Its GEO all over again.

    As a refresher, lets go over what happened with GEO. GEO was made in 1989 by Roger Smith as a cheap brand that sells rebadged imports. It was meant to strengthen GM’s ties to foreign brands as well as a way to get sceptics back into GM showrooms. And since the cars had import style, handling, and quality (because they were imports), the stupid American public would start to think better of GM.

    It did none of that. Since GEOs were sold in Chevrolet showrooms, the GEO cars just competed with the Chevrolet cars that they sat across the lot from, and GEO was dissolved after the 1997 model year.

    So yeah, by going by history, turning Saturn into a GEO like venture is going to be a rousing success. /sarcasm

  • avatar
    wil

    Would be interesting to see Tata air powered car in Saturn showrooms. Would give India a foothold in the US.

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