GM's Failed Saturn Brand Goes On The Block

(CBS)  When General Motors unveiled the Saturn in 1990, customers loved the brand's "no haggle pricing" policy. But they're not buying anymore. Saturn has just 1 percent of the market and GM has slapped a "for sale" sign on the brand, as CBS News Business Correspondent Anthony Mason reports.

"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.

Selling Saturn won't be easy either. Chinese or Indian automakers might be interested in getting a foothold in the U.S. market, but only at a fire sale price.

"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.

[au_fait]

About Unions making 14 to 35 dollars an hours. Who are these employees. Speaking with friends parents in unions, the pay is 50 to 75 dollars and hour. Then you have the ability to draw full or partial pay for up to two years for sitting on your ***. Go to hell unions. At one time there was a need for unions, what is needed is accountability, by managment and by workers. You work, you get paid, you manage well you get paid. No performance you lose your pay and no bonus or buyout!!

[tennartex]

This is to Katy Couric.

Once our family looked upon your news program as one we desired to see. However, your blatant bias during the election and pushing of Democratic agendas turns us off. We will not watch your program.

[dgruber150]

my granddad drove fords and then chsylers as best i can rember. my dad always drove chevys. but now has volvos and infinti in his garage for the past 10 years

[tennartex]

If this is a "loan" to the big three, then where is the details of repayment and what is the interest rate? Please do not give me that bull about the UAW not being one large cause for automotive''s problems. Also, the guy at Chrysler ran Home Depot into the ground and now he has another one just about there. Are we supposed to believe him?

[saturngsm]

Just to be clear as well, the "Government Loan" is your money and mine. The government does not earn or create wealth. It comes from us. As far as the media, I agree. Let us feel like Americans and not the sheep we have become. Skip the media and investigate for yourself. Go online and check out these companies. They are publicly traded and therefore financial records and practices are made public. Be the smart industrius American that you are and do the right thing. Find out the truth instead of being spoonfed garbage.

[quikdude307]

Just to clear one thing up. The BAILOUT is not a GIFT it is a LOAN which will be paid back to the government.

[saturngsm]

As a Sturn employee, I agree that the marketing efforts for our brand have been lackluster at best over the years. Turning Saturn into Global Platform cars was a huge mistake and removed the uniqueness of the brand in one fell swoop. Big Brother GM has always had their favorites, and we were never it. I don''t agree with a government "bailout" and even bridge loans represent empty dollars. The federal reserve is in deficit state and there is no "money". When my checking account reaches zero, I don''t write checks. My opinion: Private industry, banks included, need to take their lumps like any other failed business and figure it out. Buick- Your Tax Dollars at Work???

When my tenure runs dry here, my work ethic and desire to succeed will force me to figure it out. I''d shovel dung if it meant staying off of the government dole and supporting myself.

[hitoyou11]

GM spends only 10% of it''''s budget on labor.

Unfortunately, due to misconceptions, the Unions take a lot of heat for earning between $14 and $35, which is barely middle class.


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Posted by vadem1 at 11:06 AM : Dec 05, 2008


You sure are sucking up to the UAW. They don''t know how to work, they are over paid and what they do is worthless. You need to stop beliving all the LIES they tell. They make a lot of money, way over middle class. Maybe the new people don''t, but the big 3 are not adding people they are letting the no goods go.

[valentin73]

Who in their right mind, is going to buy a Saturn, Not we, the American people.
Same goes for Ford''s Escape and Dodge Avenger, all
NO-SELLERS!!!
Diversification is not always the answer to everything.
About the only thing the Big 3 sell are trucks, and all three compete heavily in this market by designing and redesigning the same basic truck. Right now all eyes are on the Chevy Silverado, after the Ford F150 last year''s model and before that Dodge Ram, and the puppets who buy into this clever marketing ploy. How sick is that.

[whitman]

GM spends only 10% of it''s budget on labor.

Unfortunately, due to misconceptions, the Unions take a lot of heat for earning between $14 and $35, which is barely middle class.