GM Pulls Plug on Saturn

Oct 05, 2009

Saturn, GM’s brand of small cars once billed as a new and different kind of car company, is next in line for the chopping block after the demise of Pontiac and Oldsmobile.


GM reached a tentative agreement to sell the Saturn brand to former race car driver and auto magnate Roger Penske in June.  But Wednesday, Penske Automotive Group Inc. announced that it is walking away from the deal due to an inability to find a manufacturer to make the cars after GM ceases production of new Saturn models at the end of 2011.  GM followed Penske’s announcement with their own, saying that the automaker would simply close down the brand.


The Saturn brand was set up in 1990 to combat the growing popularity of Japanese imports. Now the owners and employees of Saturn dealers nationwide are frantically looking for ways to remain in business and save approximately 13,000 jobs.


“I find this hard to believe,” said Carl Galeana, owner of two Saturn dealerships in suburban Detroit. “Everyone’s been saying we’re right at the goal line.”


The deal between Penske and GM collapsed Wednesday, after an unidentified manufacturer told Penske that its board had rejected a deal to make new Saturn vehicles.  GM had agreed to continue making 3 Saturn models after 2011, but all new vehicles would be Penske’s responsibility.


Penske spokesman Anthony Pordon said there is little if any chance that the talks could be reopened. Without another supplier in place before the deal was signed, Penske couldn’t run the risk of taking on Saturn, Pordon said.


GM will stop making Saturns as soon as possible, but no layoffs are expected, said spokeswoman Sherrie Childers Arb. “Those plants produce products for other brands, and we think we can increase volume on those products that will meet market demand,” Childers Arb said.

Galeana said he’s heard nothing yet from GM or Saturn, but if the plan is to phase out the brandand cut the products, he’ll have to come up with other options.


“I assumed if you’re at the goal line, those things would have been figured out,” he said Wednesday. “We’re going to try to put some plan Bs in place at this point.”


Galeana said he’s concerned for his employees and still hopes the deal can be resurrected.
“It’s tough out there, but we’ll keep fighting. That’s all we can do.”


Photo courtesy of multitrack under the Creative Commons License.