GM Sells Saturn To Ex-Race Car Driver

Tentative Deal Reached With Roger Penske To Take Over Brand

(AP)  General Motors Corp. has a tentative deal to sell its Saturn brand to former race car driver and dealership group owner Roger Penske, both companies said Friday.

Penske has signed a memorandum of understanding that would give his dealership chain, Penske Automotive Group, Saturn's 350 dealerships, the companies said. Penske said that he expects to offer all the dealers new franchise agreements and will retain all 13,000 Saturn employees for the immediate term.

“I would expect that the model that we're putting together, the distribution model, will be profitable day one,” Penske said in an interview with The Associated Press. “We'll have less costs. We'll not be in the manufacturing side.”

Neither Penske nor GM would say how much Penske is paying for the brand. Penske said he expects the deal to close in the third quarter.

Penske Automotive Group also distributes Daimler AG's Smart subcompacts in the U.S., but Smart has its own dealership network and Saturn dealers will continue to exclusively distribute Saturn vehicles, Penske said.

Initially, GM will continue to produce on a contract basis the Saturn Aura sedan as well as the Vue and Outlook SUVs, the companies said. But Penske said he is in talks with manufacturers around the world about building Saturn cars in the future.

“We will be selling as many GM cars - a many GM-produced cars - under the Saturn brand as possible,” Penske told reporters in a conference call Friday.

GM had announced plans earlier this year to sell the Saturn brand. The car maker launched Saturn in 1990 with the tagline “a different kind of car company.” GM's hope was that Saturn would attract younger buyers with smaller, hipper cars to better compete with Japanese imports. It built a new plant in Spring Hill, Tenn., devoted to Saturn production.

The factory had more flexible work rules than traditional GM plants for the employees who built the cars.

Despite a cult-like following that drew thousands to annual reunions in Spring Hill, the brand never made money for GM. The factory stopped making Saturns in 2007 and currently builds only the Chevrolet Traverse.

As GM focused more on high-profit pickup trucks and sport utility vehicles, Saturn began to languish in the late 1990s. Then in 2006, car buyers began to find Saturn's new models more appealing. But after a good year in 2007, sales dropped 22 percent last year as the U.S. car market withered.

Today, Saturn production is scattered at plants across the U.S. The Aura is built at GM's factory at Kansas City, Kansas. The Outlook is built in Lansing, Mich., while the Vue is built in Ramos Arizpe, Mexico.

The Saturn Sky roadster is built in Wilmington, Del., but that plant is scheduled to close in July and the model will be discontinued. The Saturn Astra was imported from GM's plant in Antwerp, Belgium, and was discontinued last year.

Penske Automotive will take over the separate Saturn parts factory in Spring Hill, which will continue to make Saturn components.

Penske Automotive owns the second-largest U.S. automobile retail chain by sales and consistently scores high in customer satisfaction surveys. the company also has race teams in the IndyCar, NASCAR and Grand-Am series. Penske received wide acclaim for heading Detroit's successful effort to host the 2006 Super Bowl.

Carl F. Galeana, who owns two Saturn dealerships north of Detroit, said Friday he was thrilled that Penske would be the Saturn buyer.

“Roger Penske is an icon in the business world,” Galeana said. “I've worked with him personally. Nobody works harder than Roger Penske.”

Galeana said the fact that Penske is interested in Saturn means the brand has value.

“It allows Saturn to get back to its original roots, which is to be an independent car company,” he said.

GM, which filed for bankruptcy court protection on Monday, has said it plans to shed its Saturn, Hummer, Pontiac and Saab brands. Earlier this week, GM said it found a buyer for Hummer in China's Sichuan Tengzhong Heavy Industrial Machinery Co.

However, any such deal would require Chinese Commerce Ministry approval, and reports in state-run newspapers Friday said Sichuan Tengzhong had not yet obtained such an approval.

[impeachbhb]

Support our President. Help him pay back the UAW for their financial support while furthering his socialist agenda. BUY GM PRODUCTS!!!!

Obama and the UAW leadership -- Comrades

[ibsteve2u]

Sad to see that Penske intends to build all the cars outside of the U.S. after the first 2 years...
Posted by azure13 at 1:59 PM : Jun 6, 2009

Sadder, that our leaders expect us to fight and die for them, but when the well-being of the American people is being sacrificed in the name of profit and "free trade", we're just supposed to take it.

Our nation now has two separate and distinct populations: The first consists of those who initially purchased the free trade and voodoo economics legislation, and who are being further enriched by those policies - and who consequentially never need fear losing their grip on our Congress for want of money.

And then there is the rest of us.

[sjc_1]

A classic example is the Saturn VUE. It was made with a space frame and light weight body panels, performed, handled well and got good mileage. Recently they scraped that design and imported from Opel a replacement that is 600 pounds heavier, so heavy it needs a V6. That seems like the opposite direction to go with $4-5 gasoline on the horizon.

[whitemale08]

money to pays its' suppliers or employees.----You act as if there was some other choice in the matter that GM ---or Chrysler could have made!!! If there was-----please tell us all----what was it ??? Please share it with us!!!!
Posted by roscoe2400 at 1:15 PM : Jun 6, 2009 --

First, please go to larouchepac.com, Lyndon Larouche predicted the collapse of the auto-industry 4-years ago to Nanci Pelosi in 2005; she did absolutely nothing but sell her stupid book.

Second, right now people can't afford cars right now, they need public transportation, so that means these plants can be re-tooled to build cars for mag-lev trains.

Third, we need hi-tech energy power plants like nuclear not low-tech windmills and solar panels, which is insane to think we can power a rebuild of this country with this krap.

Fourth, we need to go back to a 'protectionists' economy and protect every step of the way in rebuilding our 'real physical economy' from scratch. No more globalization and free trade.

I hope that helps you for now.

[azure13]

Sad to see that Penske intends to build all the cars outside of the U.S. after the first 2 years...

[veils-2009]

The Saturn division was a huge success. At one time it was the most profitable division in GM. Then politics took over. GM's new CEO, Henderson, ruined Saturns innovation, forward thinking designs and manufacturing practices, and pushed to sell rebranded GM imports under the Saturn brand. GM owns (owned a large share of Isuzu) which made several car models for the Saturn brand.

GM ruined Isuzu's quality and thus reputation under Henderson. The first thing GM board of directors need to do is shed this backward thinking, incompetent CEO for someone new and refreshed with the ideas of modern car manufacturing and business models.

Like Microsoft has learned over and over, good marketing can give a product a great jump start, but lousy quality can send it crashing even faster.

[incog-nito]

Posted by whitemale08 at 9:03 AM : Jun 6, 2009

Correct. The Saturn line was originally created to be an "import killer" brand, a line of small affordable cars that could compete with the imports. I remember the marketing at the time was that a Saturn car had over 90% domestic content, and was designed from the ground up and completely separate from GM's other lines. There was also the no-haggling, no-hassle, options-made-to-order policies which made buying a pleasant experience.

Then somewhere along the way the cars got big and bloated, and integrated with other GM lines so that they are all essentially the same, except for the look and the name badge. The "import killer" goal was dropped or ignored, so there's really nothing to distinguish the brand, no clear target market. What makes Saturn different than Chevy or Pontiac? Nothing.

Too bad. Because I owned one of those original Saturns and really liked them.

[whitemale08]

We have 300,000,000 people in this country and the union bashers think we can sustain that population with 2 to 3 million people working in so-called hi-tech while the other 200,000,000 can make sandwiches or work at Wal Mart for a living .

Union-bashers are the most idiotic, stupidest people on the planet.

[whitemale08]

...and the looting contnues.

GM creates a car company to offer unique affordable vehicles, and they get slammed to dump good-paying middle-class wages and sell it for pennies-on-the-dollar to parasites and maggots.

Nobody is going to buy those cars because unless people who make them can't afford them then there's no logical way.

The whole bankruptcy of what was left of our auto-industry was to dismantle the rest of manufacturing in this country so eventually we will depend on IMF/World Bank loans once China dumps the dollar.

[retiredgustav]

I see the walmart managment people are still bashing the UAW . Saturn was a joint effort with the UAW in their management process. Saturn was a great car until GM managment screwed it up. Stop bashing the unions with your lies and get a life.

[creeper00]

Excuse me? ALL of the Saturn dealerships will be in the hands of ONE man?

Boy, it sure pays to know people.

billpi-2009, nice thought but Penske won't be making Saturns. GM will still do that. This just gives Penske a lock on the sale of every Saturn in the United States.

So much for fair trade.

[incog-nito]

I had a 1995 Saturn, the original design with the plastic side panels. It was tiny, rattled like crazy, and the road noise is horrendous, probably because the side panels offered little noise insulation. But it was also great fun to drive because it was very light, around 2100 lbs. They don't make them much lighter than that anymore. It also got excellent mileage, 35 mpg mixed driving. And although it was underpowered, because it was aerodynamic you can cruise 85 mph all day long. It got a timing chain (not belt) that doesn't need replacement, hydraulic lifters (no valve adjustments), a single drive belt with tensioner that you can change very easily. It went over 120k without needing the clutch replaced or AC recharge, and didn't leak a drop. In other words, although the cosmetics suck, the powertrain is almost maintenance free and well designed.

I remember Saturn developed a loyal following because of its originality. Then GM started using parts from their other lines, and Saturn became just like other GM vehicles, all the same only with a different badge and cosmetics. The Saturn brand became indistinguisable from their numerous other brands. Too bad. It won't be missed.

[randomlybanned]

Great news, Mr. Penske!

[cattiej]

Roger Penske, a great American is buying Saturn.....Yeaaaaaaa! What a happy day for we Saturn owners...Now we can buy another Saturn but we are going to keep our 1997 Saturn that gets 33 miles per gallon. We never had our spark plugs changed until we had 99.590 miles on it. We didn't really need new spark plugs then...we should have waited until we had 100,000 miles on our Pearl ( I'm a women so I can give our car a name if I want to.). We, like thousands of owners of RV motorhomes, pull our Saturn behind our motorhome when we travel. Our 1994 class C motorhome (a Ford) gets 12-13 miles per gallon pulling the Saturn, (which weigh's about 2,500 lbs.). Thank you, Mr. Penske for saving Saturn. Thank you to all the employee's of Saturn for making a great car. We look forward to buying another Saturn. Hurrah for the people in Spring Hill, Tennessee......Yea, a very big day....

[cattiej]

We are sooo happy that Roger Penske is buying Saturn. We, along with thousands of other people who own a Saturn are very proud of owning a Saturn. We, however, will not buy the Vue because they are being made in Mexico. We will only own a Saturn made in American. Ours was made in Spring Hill...Memo to foreign cars buyers,,,if you have a foreign car made in another country...move to that country because you are supporting them by buying their product and not one made in the United States. Buy American, save our country, save your job, your friends job, your realatives jobs, your neighbors jobs..Buy American, Buy American.....Buy American......stop buying junk made in China and other countries....you are selling your soul when you buy their junk.

[billpl-2009]

"The Pontiac Solstice was a step in the right direction. Imagine a sedan version. "--Posted by u-r-right

the Solstice is an Opel.....from Germany

[billpl-2009]

hope he makes cars that go

...........VROOOOOooooooOOM!!

[u-r-right]

What a fantastic move it would be if he can hire some of the Pontiac designers to work with the Saturn guys and come up with some sporty yet practical cars for a change. The Pontiac Solstice was a step in the right direction. Imagine a sedan version.

[tiredofthebs]

A sensible brand name being bought by a sensible businessman ...... that's how you improve the economy.

[armyoftwelve]

Hope things work out for the best!