GM to phase out Saturn, Penske walks away

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Northstar

Northstar

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I thought that it was a done deal, I guess not.

DETROIT (AP) -- General Motors Co. said Wednesday it would shut down its Saturn brand after an agreement with Penske Automotive Group Inc. to acquire it fell apart.


Penske, citing concerns of whether it could continue to supply vehicles after a manufacturing contract with GM ran out, ended talks with GM Wednesday to acquire the brand.

GM CEO Fritz Henderson said in statement that Saturn and its dealership network will be phased out.

"This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," Henderson said in a written statement. "PAG's announcement explained that their decision was not based on interactions with GM or Saturn retailers."

In a statement, the Bloomfield Hills, Michigan-based auto retailer says an agreement with another manufacturer to continue producing Saturn vehicles after GM stopped making them fell through, leading Penske to terminate talks with GM.

Penske said it negotiated terms and conditions to make Saturn cars with another manufacturer, but that company's board of directors rejected the agreement. Penske spokesman Anthony Pordon would not identify the other manufacturer.

"Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction," the company said in a statement.

In June, GM and Penske agreed to take over the Saturn brand and related dealerships, although GM would produce the vehicles for a limited period of time.

GM said Saturn vehicle owners can still go to their Saturn dealer for service and would be able to go to a certified GM dealer for service once Saturn dealerships are closed.

It was expected that GM would announce the completion of Saturn's sale to Penske in the coming days.

Share of Penske fell $1.93 to $17.25 in after hours trading. They rose $1.32, or 7.4 percent to $19.18 in regular trading Wednesday.
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Being in domestic driven Detroit, my Facebook is lighting up with all sorts of status updates giving the big middle finger to Penske. I honestly can't blame them for backing out of the deal, they had no way of securing a supply of vehicles past next year. It seems like Penske made a smart business decision in all of this, and I can't really fault them for that.
 
I think they should be more mad at GM, they basically drove the brand into the ground over last 4-5 years. Last I checked they only had 1 car under $20,000 not sure about anyone else but that doesn't sound like the budget brand Saturn originally was.
 
Justin
I think they should be more mad at GM, they basically drove the brand into the ground over last 4-5 years. Last I checked they only had 1 car under $20,000 not sure about anyone else but that doesn't sound like the budget brand Saturn originally was.
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True, it just became yet another badge engineered division of GM. And while they do have one car under $20k, it's awful and even then it's still starts at over $16k which isn't cheap either. In order to be a cheap car you need to do what Toyota's done and offer a 4 cars and 1 pickup under 20 grand.
 
I'm surprised that the deal fell through, but like Joey, I don't blame Penske. He was clearly getting the short end of the deal, and with the way GM wanted to handle things, he may as well have started his own car company to get what he would need. I keep thinking that it would be worth Penske's time just to buy the rights to the brand name, and get some of the dealers together to have a stable network to sell some cars... But, you have to have some cars first. Having Renaults would have been awesome, but I'm of the mindset that I'd rather just have a Renault badge on the hood. Penske should just do that instead.
 
So, Saturn Sky Redline, or whatever they called their Miata competitor, won't return?
 
i didn't even know that saturn was intended to be sold to someone. wondered why all the commercials were still popping up.

they were intending to give the Solstice/Sky platform to opel/Vauxhall as an update for the Speedster/VX. they should still do it.
 
Sniffs
they were intending to give the Solstice/Sky platform to opel/Vauxhall as an update for the Speedster/VX. they should still do it.
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They already have done, on mainland Europe, as the Opel GT since 2006. It wasn't a success, selling only 7500 up to now.
 
couldn't be too hard to a Chevy version could it? Hell in the next iteration of the platform I could see a Cadillac version!

It's a shame about the brand overall because in my head of all their brands this seemed like the one that could survive on it's own.
 
Leonidae
So, Saturn Sky Redline, or whatever they called their Miata competitor, won't return?
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GM was going to kill the Kappa cars across the board for 2010 anyway, so it wouldn't have remained whether Saturn would have stayed. Unfortunate, really, because the Kappa chassis still had a lot of life left in it. Part of this was the closure of the plant in Delaware that had been building the cars, part of it also the reluctance to make the investment to begin production down in Kentucky on the Corvette line. There had even been rumors, at one point, that the C7 would rest on a significantly updated Kappa platform.

There is still a chance that a small, two seat roadster could return later on based on the incoming Cadillac ATS, but that remains to be seen. They could brand it as a Caddy, or maybe a Chevrolet, but its hard to know for sure.


* Side Note:

The Pontiac Solstice was meant to be the MX-5 competitor, the Sky was the "upmarket" sibling. As I recall, GM wanted to market the Sky Redline against the Z4 3.0i and "standard" Boxster.
 
They were both kinda FAIL against the newest Miata anyways, so the performance versions were both really more upmarket anyways.

Though I still think its idiotic to kill off their compact RWD chassis that they spent 3 years developing when it could easily be utilized by Cadillac for a sub-CTS vehicle that they want to develop anyways.
 
Toronado
They were both kinda FAIL against the newest Miata anyways, so the performance versions were both really more upmarket anyways.
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Agreed. I always thought the Solstice drove like a Porsche Boxter that had been in a really bad accident and fixed by a backyard mechanic. It was good but still felt sort of awful.
 
YSSMAN
As I recall, GM wanted to market the Sky Redline against the Z4 3.0i and "standard" Boxster.
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Really? Wow. No wonder I've seen maybe two. I think GM would have a lot of trouble building a Porsche caliber car.

Toronado
Though I still think its idiotic to kill off their compact RWD chassis that they spent 3 years developing when it could easily be utilized by Cadillac for a sub-CTS vehicle that they want to develop anyways.
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That seems to be the story around GM a lot lately. They spend a ton of money developing a chassis and then create a big deal about it as if it was the greatest thing ever and then kill it two years later, continuing to use their decades old platforms. At least for the Kappas and the Zetas.
 
Saturn should've went under 10 years ago.
 
Omnis
Saturn should've went under 10 years ago.
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Not really, they were fairly profitable up until a couple years ago when they moved away from the budget brand business model. On average I see about 20-30 S-Series Saturn's a day, this is because they were cheap to buy new which means cheap to buy used.
 
Saturn was ready to die when they botched the L-series debut back in 2000/2001. Granted, it wasn't a terrible car, but it wasn't good enough to take away the sales from the Camry and Accord that its predecessor had been doing for years.

Then the S-Series to the Ion? Fuhghedaboudit!



It was really surreal listening to NPR this weekend with them talking about the closure of Saturn. It was painfully obvious that no one who was sharing their stories of Saturn had been in a dealer in the last five or so years, and more so, when they tried to act like they knew what they were talking about, it only made things worse. The story just seemed so typical for the situation in Michigan... Its nice that you care, but you should have been doing it years ago.
 
the Saturn L's were rebadged Opel Omegas...and even europeans call them crap. all imports have to be americanized, remember? that means they gain 50% in weight from US required safety equipment, and another 25% from the items americans view as standard in a vehicle.
 
The Omegas were RWD. The Saturn L-class was FWD.

I dont' see how they could be rebadged Opels. The Catera was an Omega.
 
Sorry to see Saturn go kind of, but its GM's fault and they should bare the brunt of all the negativity.
 
Roger Penske had a deal to import cars from Renault's Korean Samsung subsidiary, but the Renault Board of Directors vetoed it. My guess is that they didn't want Saturn to compete against Nissan (which Renault controls) in the US, especially if it's their own cheaper cars stealing sales from Nissan.

Saturn always seemed like a bad idea to me, anyway. The idea was to make a new domestic brand for people who preferred imports to domestics. Wait, what? If you're targeting people who don't like domestics, you don't try to sell them another domestic. If they want imports, then sell them the imports you already own: Isuzu and Suzuki. But instead, all that money went into Saturn, and Isuzu and Suzuki were left to wither. Isuzu used to build Chevy's small truck back in the '70s, but by the time they withdrew from the US market earlier this year, they weren't selling a single Isuzu designed or built car. Ironically, they were only selling rebadged Chevy SUVs. That's pitiful. If GM had thrown that money at Isuzu in the first place, it would be a much stronger company, potentially rivaling Nissan, Toyota and Honda for sales and credibility in the eyes of the buying public. And not just in the US, but around the world.

There's a lesson here: don't just create new brands because it sounds cool. Strengthen the brands you already have.
 
Jim Prower
The Omegas were RWD. The Saturn L-class was FWD.

I dont' see how they could be rebadged Opels. The Catera was an Omega.
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Yep, the Saturn L was based on the front drive Vectra from two generations ago (same as the Saab 9-5).
 
martialstax
Saturn always seemed like a bad idea to me, anyway. The idea was to make a new domestic brand for people who preferred imports to domestics. Wait, what? If you're targeting people who don't like domestics, you don't try to sell them another domestic. If they want imports, then sell them the imports you already own: Isuzu and Suzuki. But instead, all that money went into Saturn, and Isuzu and Suzuki were left to wither. Isuzu used to build Chevy's small truck back in the '70s, but by the time they withdrew from the US market earlier this year, they weren't selling a single Isuzu designed or built car. Ironically, they were only selling rebadged Chevy SUVs. That's pitiful. If GM had thrown that money at Isuzu in the first place, it would be a much stronger company, potentially rivaling Nissan, Toyota and Honda for sales and credibility in the eyes of the buying public. And not just in the US, but around the world.

There's a lesson here: don't just create new brands because it sounds cool. Strengthen the brands you already have.
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Thing is though, when they first created Saturn back in the early 90's they did have a good idea going. Cheap cars with dent resistant body panels and an outstanding dealer network. Of course, selling the same single car for a decade would get old, so they had to introduce something else and along came the L-Series, which at the time was still a great vehicle. Then they introduced the VUE which followed in the footsteps of the S-Series, all well and good. Once they dropped the S-Series for the Ion, so began the rebranding habit of Saturn. Granted the Ion was a great car compared to the Cobalt and G5 (due to the two half-doors).

Perhaps GM would have done better if they would have allowed Saturn to remain a completely "separate" brand from the rest of GM. Maybe share an engine or some suspension bits if needed, but otherwise design completely different cars. But now, Saturn is once a ghost of its former self, tarnished by the rebadge bug that GM hasn't found a vaccine for.

Sorry for rambling, but I really got interested in Saturn when my dad bought a SC2 back in 1993. :p
 
martialstax
Saturn always seemed like a bad idea to me, anyway. The idea was to make a new domestic brand for people who preferred imports to domestics. Wait, what? If you're targeting people who don't like domestics, you don't try to sell them another domestic.
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That is why they spent billions upon billions of dollars making Saturn out to be different. They had their own engineers, their own ads and their own assembly plants. As a result, they had their own (very brand loyal) customers. For all intents and purposes, they were only part of GM because GM paid the bills.

martialstax
If they want imports, then sell them the imports you already own: Isuzu and Suzuki. But instead, all that money went into Saturn, and Isuzu and Suzuki were left to wither. Isuzu used to build Chevy's small truck back in the '70s, but by the time they withdrew from the US market earlier this year, they weren't selling a single Isuzu designed or built car.
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They gave Isuzu complete control over the engineering and design of the truck to replace the S10. The result was a vehicle arguably worse than the 20-year-old one it was replacing.
As such, the last vehicle they sold in America, the I-series, was entirely Isuzu designed as it was a rebadge of the Chevrolet pickup that they designed.

martialstax
There's a lesson here: don't just create new brands because it sounds cool. Strengthen the brands you already have.
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Saturn was working as a brand until they tried to "strengthen" it.
 
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NissanSkylineN1
1 bad car company gone, 2 more to go (Pontiac and Buick)
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Pontiac is already dead. Have you NOT paid any attention?
 
My dad tells me Saturn is giving dirt cheap leases right now. Anyone have info? I'm too busy eating my Cocoa Puffs to look it up.
 
Seems reasonable given how cheap the sales and lease offers were on the remaining Pontiacs around here. They were offering 0% financing for 60 months on brand-new G8 GTs, which if I'm honest, if I had the money, I would go for. But, for Saturn, I'm not sure what's left that would be worth getting. The VUE, without updates, isn't competitive. The Astra has been totally outclassed by everything. The Aura gets topped by the Bowtie across the street. What else is left? The Outlook? The Sky? Meh.
 

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