Saturn Sold to Penske

Steven Lang
by Steven Lang
saturn sold to penske

Not “a” Saturn. “The” Saturn car company. Yes, that’s right: ladies and gentlemen, Saturn has just left GM’s building. Bloomberg reports that the feel good GM division that had once seemingly overcome GM-itis, only to be sucked in by the Borg of GM’s divisional infighting, has finally achieved independence. The Penske Automotive Group has offered a bid in the low nine’s ($100 to $200 million) for a company that has gone through well over ten billion dollars and not a penny of profit. Was it all GM’s fault? Is the Saturn “no haggle”-friendly dealer formula still a winner in today’s heavily discounted world? There’s no telling. But there is a twist. Apparently the cars that may be used for this “different kind of company” will be Renault based and built . . . in South Korea. Who wants to bet that the PRC will also be in Saturn’s orbit within the next few years? Any takers?

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  • U mad scientist U mad scientist on Jun 05, 2009
    but the former president’s first budget proposal in 2002 worked on the assumption of a $5.6 trillion surplus by 2010. Oh, I guess the Laffer curve didn't quite work out for him. - When one takes into account the extreme drop in tax revenue of $450 billion (which is natural in a deep recession), putting former “supplementals” onto the budget (instead of only accounting for it in the public debt ledger), and also accounting for the fact that $1 trillion of this year’s projected on-budget deficit was clocked in before Inauguration Day, then it clarifies the situation. Yes, but those aren't real conservatives. Real conservatives are manly piraty men who'll take deflation right to the balls without even a peep. Also, we need to have free money, not this fiat crap, but based on real commodities (like the paper they're printed on, or gold nuggets), just like somalia.

  • Charly Charly on Jun 05, 2009

    The SM3 is based on the Renault Megane. About new cars for Saturn. I assume that GM and Opel will build new Saturns when asked. At least for the cars who's badged engineered twin is kept in production

  • on Jun 05, 2009
    Redbarchetta: What Roger is getting is a nationwide dealer network infrastructure for a (relative) song and a brand name that has some following. There are plenty of Saturns out there and my guess is that by the time this is all said and done most of them will be out of warranty anyway. I believe sales started their drop off the cliff when the Ion came out.

  • CapVandal CapVandal on Jun 05, 2009

    I think that this has a lot going for it. First, the federal government made it clear in March that they were guaranteeing the car company warranties. Warranty work is a profit center for dealerships, so it isn't a problem for Penske -- he's going to make money on it. The Saturn dealers got high marks for customer satisfaction, so they are starting out with with a good marketing platform at salvage pricing. GM should have considered *keeping* the Saturn dealerships and used it as a relatively low cost "Green" brand. Or something. Anyway, the idea of splitting manufacturing and design/sales might work extremely well. Think of Apple. They no longer manufacture anything but they design and source every product with a coherent design philosophy. There is a lot of excess manufacturing capacity worldwide, which leads me to believe that getting product at acceptable price point is very doable. Your typical Saturn buyer was there for a no haggle experience and was looking for "car as appliance". Starting with this concept, I think a lot of buyers want less choice. Let Penske pick a single "Saturn" trim level with the cars reasonably well optioned, a couple of colors, etc. I've always liked Honda/Accura for their no option philosophy. They have gotten a little away from it with too many trim levels (Like LX, EX, then with/without 6, leather or no leather, and nav or no nav). It is still a lot easier than other manufacturers with the various packages. Saturn probably attracted a lot of Vegans, so they could ditch leather part of their design philosophy. The single trim level would eliminate the agony of the upsell. You walk in and Roger and his design team has a couple of colors that work with the particular model, a single, practical trim level, etc. This would be a huge expense savings, as you would need much less inventory, etc. And an attractive price. Obviously, cars are a lot more complex than computers (excluding the operating system), so the idea of company owned design and retail centers (Apple) -- without ANY manufacturing just might work. I don't know that much about the car business, but I could see this working. Also, FWIW, Penske has a logistics firm. Outsource the capital intensive part of the business and keep the relationship with the customer -- the dealers -- and the design.