Why Penske Let Saturn Die
Penske Automotive’s official explanation for pulling the cord on Saturn was that they couldn’t get a supply deal. Renault-Samsung figured the risks of supplying a reborn Saturn were high, while the reward was (at best) competition with established Nissan offerings. But Roger Penske was putting his company out on a limb as well. Penske Automotive stock had been bid up in the days before the Saturn deal fell apart, as speculators sought to get in on the ground floor of the new company. As usual though, the speculative bid-up was based more in hype and long-term potential than underlying financial realities. Despite a losing over $3 in share price after the collapse of the Saturn deal, Penske’s forbearance is being rewarded. Standard and Poors had put Penske on a credit-rating downgrade watch on fears of the firm over-leveraging to take on Extreme Makeover Saturn Edition. With the deal called off, Penske stock might not have the speculative upside it once did, but it has already doubled this year. And backing away from a potentially messy revival of a troubled brand has PAG headed out of the credit-rating doghouse. And as the man himself has said, “my dad told me a long time ago, it’s not what’s good for you Roger, it’s what’s good for the company.” Meanwhile, Pete “ Autoextremist” DeLorenzo figures the Saturn network would make a good upscale network for Hyundai’s Genesis and forthcoming Eqquus lines. A whole network for two vehicle lines? I wouldn’t be holding my breath. Luckily Saturn dealers have had a few years to get used to being unwanted.
More by Edward Niedermeyer
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Mr. Panhard: at least Fiat has something to sell: trucks,vans,etc. After 2 years Saturn would have nothing. Apparently work has been continuing on the 200C and the new Jeep is set to debut. The Pentastar V6 is nearly ready as well. With all due respect, there's a lot going on there @ Chrysler especially in comparison with what Saturn would have to offer in 2 years. As a matter of fact, the intention by GM was to end all Saturn products after the 2009 build out, a claim that was made in a statement some time before Penske got involved. Me? I was hoping to buy a Korean made non GM Saturn as a big Fung Gu to GM, so I am a Little disappointed.
Is Penske getting senile and losing his touch? After his horrible blunder with the "Dumb" (aka the "Smart" covered scooter), who would have been a blunder from day one if not for the oil price spike in mid-08), he wasted his time with that loser Saturn. WHY? he should not ever have touched it, let alone waste so much time and effort before, as he should, dropping it.
I don't know what De Lorenzo is smoking with his "Hyundai will buy Saturn thing". First, Saturn is no longer for sale. Second, there's no indication that Hyundai is even vaguely interested. Third, his idea is completely retarded.
Geotpf: De Lorenzo has been in full on Hitler-in-the-bunker delusional psychosis for a while now. He will advance any half-assed idea that might help save Detroit without regard for logic, common sense, or the laws of physics.