GM's Failed Saturn Brand Goes On The Block
CBS Evening News: Abundance Of Brands And Models Has Been One Of The Struggling Carmaker's Many Problems
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Chuck Hallenby works on the assembly line at the General Motors Powertrain Warren transmission plant in Warren, Mich., in this June 1, 2006 file photo. The plant helps manufacture GM's once-popular Saturn line, but Saturn sales have foundered and GM is seeking to rid itself of the brand while seeking tens of billions of dollars in federal bailout money. (AP Photo/Carlos Osorio)
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General Motors Executive Vice President Tom Stephens poses with a Saturn Vue Green Line Plug-in Hybrid at the North American International Auto Show, Jan. 14, 2008 in Detroit. Analysts say GM has suffered as a result of having too many brands and models compared to its more efficient foreign competitors. (AP Photo/Paul Sancya)
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A Saturn Vue plug-in hybrid vehicle, is shown with at a July, 2008 conference on plug-in hybrid vehicles. Saturn, which General Motors tried to position as a forward-thinking brand, is very likely to be sold off or eliminated. (AP Photo)
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"They have to sell Saturn. They also probably have to do something with Pontiac," says Kevin Tynan, senior auto analyst at Argus Research.
Tynan says the problem is simple. General Motors has eight brands and 57 models. Toyota sells nearly as many cars and trucks with just three brands and 32 models.
"The cost of trying to put that many models in the marketplace - to design, build 'em and market them - is just too expensive" for GM, says retail analyst Mark Kiness.
The Saturn Aura is built around the same drive train as GM's Chevy Malibu and its Pontiac G6 and they share many of the same parts. But those cars compete against the Toyota Camry, which last month outsold all three GM versions combined, something Kiness says underscores the poor management decisions that have put GM where it is today.
But carmakers can't simply shut down a brand.
"It seems very easy, but it is not a matter of flicking a switch," says Rebecca Lindland of research firm Global Insight.
As GM discovered when they shuttered Oldsmobile four years ago, dealerships have to be bought out - and that can get very expensive.
"It was billions and billions of dollars to shut down Oldsmobile. And that was a pretty small brand," Lindland says.
It was billions and billions of dollars to shut down Oldsmobile. And that was a pretty small brand.
Rebecca Lindland, Global Insight"It's certainly a buyer's market. But there's no credit to be had. [And] they're damaged brands to begin with," Tynan says.
And automakers will also pay in loyalty.
"Will these people go out and buy another GM brand?" asks Tom Waurishug, general manager of a Saturn dealership in White Plains, N.Y. "I don't think so."
But for some of Detroit's once revered brands, it's looking more and more like the end of the road.
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