GM may rebuild Saturn rather than kill it
When it comes to Saturn, General Motors is a little stuck. The plucky brand that promised something different and then turned into much the same hasn't seen critical acclaim or profitability for more than ten years. GM has halted funding for new Saturn products, and its plan to Congress indicated that a sharp focus on Buick, Cadillac, Chevrolet and GMC. That would appear to leave Saturn something pretty close to dead.But GM can't simply close the Saturn shop. There are 425 Saturn dealerships, and one dealer-broker figured that GM would have to shell out $3-$4 million to each dealer if Saturn gets put down. That puts GM past the billion dollar mark even before any other cost is taken into account. And Saturn can't simply be sold either, except as a brand name and blueprints – it has no engineering nor manufacturing abilities outside of GM.
A meeting is planned for later this week to "conceive a new business model" to make Saturn profitable, because the uncertainty isn't helping anyone. Dealers don't like the sound of GM putting all of its eggs in a basket that doesn't include Saturn, customers don't like the sound of "No new product," and GM can't stay in a holding pattern and shell out money for a brand going nowhere. We hope they sort something out that restores its initial promise – and some profits – because we still have a soft spot for the otherwordly brand.
[Source: Automotive News, sub. req'd]
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Reader Comments (Page 1 of 5)
inteller 8:33AM (12/09/2008)
sounds like the Big 3 dealer agreements are about as stupid as the UAW agreements. Every time I hear about a brand getting killed off (and rightly so) someone brings up this spectre of dealerships needing to get paid off. I call BS. I'm sure there are clauses in GM's contracts that allow them to modify what these dealerships sell.
Alternatively, GM should take the german solar company up on its offer, but force them to take the US Saturn dealership network with them.
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Sea Urchin 8:39AM (12/09/2008)
"Every time I hear about a brand getting killed off (and rightly so) someone brings up this spectre of dealerships needing to get paid off."----------but these people paid millions of dollars for these dealerships, you can't just confiscate their investment.
Also the reason Saturn sucks is......CEO is a moron.
#1 Saturn does not need Outlook, that car costs in mid 30's, that's too much.
#2 I said this here 1000 no one in his right mind will pay $1,300 for a 4 speed automatic tranny that is on Astra, no one. I believe BMW charges less for its automatic.
#3 Make the entire brand a Honda Civic oriented brand, make it more like Scion, no minivans, so expensive sports cars, yes Sky is nice but not at that price. Offer only 4 -5 cars, no SUVs, make only affordable, hip cars ala Civic, Mazda3, Subaru Imprezza.
shethj 8:56AM (12/09/2008)
Dealers are protected by state laws. These rules have nothing to do with GM specifically. You just cannot arbitrarily force a dealer out of business on a whim. This is complicated stuff.
Saturn should not be closed. It should be a brand that sells small cars, four cylinder equipped vehicles and hybrids only. The lineup should be reduced to 4 vehicles with nothing larger than the Vue. It would be stupid to kill it now with the hybrid and plug in Vue on the way.
Frylock350 8:59AM (12/09/2008)
That plug-in Vue can easily become a plug-in Equinox. In fact, Chevrolet has far more use for it than Saturn does.
Flashpoint 9:14AM (12/09/2008)
I say KILL SATURN, OLBSMOBILE and drop SAAB.
Refocus your efforts into making better Chevys and better GMC's. Refocus your efforts to make Cadillacs as good as BMW's or Audi's.
Buick is a cash cow in China. Focus on sales in China because as more Chinese move up the socio economic ladder, they will desire an "American" luxury vehicle. (secret: Chinese people HATE Chinese products - and they don't like buying Japanese either - I lived there for 3 years)
GM should also focus on making a luxury and entry luxury brand popular in India for the same reason they need Buick's in China. India is a growing market for cars and I believe they'd want a Chevy or Cadillac before they'd want anything owned by Tata.
K Ryan Hasse 9:31AM (12/09/2008)
I agree w/ Inteller:
Plan for GM: Bankruptsy. No more UAW, reduce brands to Chevrolet and Cadillac only (RIP GMC, Pontiac, Buick -China can live w/ re-badged Buicks as Cadillacs). Sell Saab, Hummer (for like $200 to a dreamer Indian/Chinese). If dealers don't like the New Deal, they can sell something else. I'll take my $70 million Golden Parachute now.
The thought of these CEOs w/ hat in hand for the purposes of bailing out the UAW has me nuts. The CEOs met with the government from a position of strength: Threaten Bankruptsy, like any other industry can do. The they should have flown back to California, and put sugar in Nancy Polosy's private jet's fuel tank.
If our most valuable CEOs will not defend true Capitalism (no government interference or bailouts), and worse, if they're all in bed w/ government, then you and I are living in the U.S.S.A. Prepare to stand in line for toilet paper.
Read: Milton Friedman, Ayn Rand, John Locke, James Madison, and Thomas Jefferson.
"I swear by my life, and my love of it, that I will not live for the sake of anther man, nor ask that he live for mine"
Judy Zik 9:55AM (12/09/2008)
@Flashpoint
What a great idea. They can kill Olbsmobile! That will fix everything. Why didn't the rest of us think of that?
Death to OLBSMOBILE!
happy_penguin 11:14AM (12/09/2008)
Ummm... Oldsmobile was killed years ago. Did someone forget to send that memo?
alex 11:20AM (12/09/2008)
it's called franchise law, dumbass. and by law, i mean United States of America law. And last time I checked, United States of America laws dictate the agreement between franchiser and franchisee, not the other way around. So no, just because you've never taken a business law class doesn't mean GM is making up this problem of having to pay off dealers.
Giving Oldsmobile the axe cost over $1 billion and counting. I say "and counting" because there is still pending litigation.
Polly Prissy Pants 12:23PM (12/09/2008)
You know, when you're burning through $25 billion every year what's another $1 billion when it means jettisoning a brand that's an anchor around your neck? GM has too many brands and too many dealerships. Period. "Fixing" Saturn won't change this. Bite the bullet, spend the money now and reap the benefits later. If you (GM) really want to fix yourself instead of continuing the same stupid mistakes you made over the past 30 years then this is a fantastic place to start.
blotto 2:18PM (12/09/2008)
@ Flashpoint
Funny little thing about China is that they're dependent on US for their wealth. The same goes for India.
Our recent financial debacle is affecting both nations' economies.
Buick can exist as a brand in China, but it should be a re-badge of vehicles from the new core brands proposed by GM.
Speaking of core brands, GM should just pare things down to Chevy and Cadillac and maybe Saturn. What's with the Buick/Pontiac/GMC "channel" strategery? Chevy can cover low to near luxury brands and Cadillac can cover the luxury segment. Saturn can potentially be recast as an alternative green or youth oriented brand.
We can armchair quarterback GM's restructuring all we want, but in the end, GM has a once in a lifetime opportunity to do an extreme makeover of its operations. GM needs to bite the bullet and take the hit now or we (the taxpayers) will be dealing with this again.
Rich 4:12PM (12/09/2008)
Sea Urchin -- I was going to say "Opel!", but I like your idea better.
Absolutely: concentrate on small, efficient, but fun cars. Don't make it a complete line-up. Saturn could be a subset of Opel. I don't know what the sales figures are like for the Sky, but it would be nice to keep that on. Otherwise, bring on the VX220, like they should have done in the first place. It was stupid to re-engineer the backwards Austin Metro over again.
And then do the same thing to other brands. Reduce them. Make everything a desirable niche, and (shock!) reduce output to suit demand. Maybe even Pontiac could be given a reason? Or maybe not.
gearhead18 1:36PM (12/13/2008)
Dam, whats with all the Oldsmobile hating around here, we are talking about Saturn a company with an identity crisis. Back before Olds got killed they made some decent cars, I would have rather seen Buick go than them. As for Saturn get rid of the Outlook and keep bring in little European cars, maybe Saturn could be the fun brand at GM. The got the better looking Sky/Solstice twin and except the G8 Pontiac isn't doing to well, slap a Saturn badge on the G8, kill off Pontiac and it's all good.
James 8:37AM (12/09/2008)
Kill Buick and GMC. Both suck anyway. Chevrolet needs a wagon too. Want fuel efficent cargo hauling vehicle? STATION WAGON!.
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Frylock350 8:55AM (12/09/2008)
Any station wagon that's fuel efficient is also incapable of hauling anything...
hypermiler 8:56AM (12/09/2008)
Buick brand is GM's cash cow in China, so it is untouchable. Likewise GMC has a loyal customer base, so it will be saved.
Frylock350 8:56AM (12/09/2008)
GMC sucks? It outsells Mazda, Subaru, etc. Its also profitable.
Dann D. Donn 5:48PM (12/09/2008)
Station Wagon Comments - My '02 Saab 9-5 V6 has hauled everything but livestock - 141000 miles, and 22-24 MPG combined ALL DAY LONG. The later 9-5's with 260 hp/250 or so lb-ft of torque will give you 25-28 MPG, plus 73 cu ft of interior volume w/ middle seats down.
The American Manufacturers gave away the midsize wagon market to the Europeans back in the 80's. . .Saab is a cost effective, versatile and reliable option to Volvo, Audi, BMW, with better fuel economy and interior room than most if not all the CUV's sold today, and satisfying (not exhilarating) performance.
Since Saturn and Saab are so heavily influenced by GM Europe (Opel), combine 'em to compete with Eurpean style and technical innovation (green, alt fuels, turbo expertise).
That said, I'd buy a Malibu wagon in a minute if GM would have the vision to sell one. Hell, I'd have bought a LeSabre wagon for the same reason! The point is, American manufacturers, sell what I WANT to buy, instead of what YOU WANT to sell!
happy_penguin 11:17AM (12/09/2008)
Nobody wants station wagons. Crossovers make more sense for those needing a vehicle in that class.
Torrent 11:40AM (12/09/2008)
You have it all wrong, James. ALL WRONG.
Have you seen Buick's 2 latest car entries? Enclave and LaCrosse (Invicta). Buick is once again on the verge of making cars that everyone wants. Everyone. Well, except for you.
GMC has always meant trucks and tough machines. You obviously don't work in construction or even pay attention when you might be passing by a building being built, because GMC has been known for making the most capable trucks since 1912. Believe it or not, buildings still have to be built, highways repaired and houses fixed, and people need a brand they can trust. GMC. That's why they sell great.
You want a station wagon? You can have my mom's Cutlass Cruiser. Get with the times, man. A Station Wagon? A new one? Cereal? You have to learn that trends have to end sometime. A Dying Trend>H2
And hell no you can't have my mom's Cutlass...