BREAKING: Penske walks away from Saturn deal, brand to "wind down"
by Sam Abuelsamid on Sep 30th 2009 at 4:55PM 
Saturn fans will be saddened to hear that the brand is about to be history. Penske Automotive Group (PAG) and General Motors have been in the final stages of negotiations to transfer the brand, but late this afternoon, both parties issued statements that Penske was walking away from the deal.
The reason cited by Penske for the deal's demise is difficulty in securing a supply of product beyond the end of 2010. GM had agreed to continue supplying the Outlook, Aura and Vue until the end of next year, at which point Penske would get other automakers to produce vehicles to sell through the Saturn dealer network.
It was originally believed that Penske had a deal with Renault, possibly supplying vehicles from its South Korean subsidiary, Renault-Samsung Motors. However, the other automaker's board of directors rejected the deal, leaving Penske out in the cold. In the wake of the news, GM announced that it would wind down Saturn and close all the dealerships. After Saturn dealers close, Saturn owners will be able to get service from other GM dealers. You can read the official statements from both Penske and GMchronicling the demise of Saturn after the jump.
[Sources: Penske Automotive Group, General Motors | Image Source: Bill Pugliano/Getty]
PRESS RELEASES
Penske Automotive Terminates Discussions with General Motors to Acquire Saturn
BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--Penske Automotive Group, Inc. (NYSE: PAG) an international automotive retailer, today announced that it has terminated its discussions with General Motors Company ("GM") to acquire the Saturn brand, citing concerns directly related to the future supply of vehicles beyond the supply period it had negotiated with GM.
Since announcing its discussions with GM on June 5, 2009, the company has been in the due diligence process to determine the feasibility of developing an independent distribution model for Saturn-branded products and service parts in the United States, including the sourcing of vehicles from GM and other potential suppliers. The company had negotiated a definitive agreement with GM to source vehicles on a contract-manufactured basis for a period of time. After this period, the company would have been required to source vehicles from another third party under a similar contract-manufacturing agreement.
Penske Automotive Group negotiated the terms and conditions of an agreement with another manufacturer; however, that agreement was rejected by that manufacturer's board of directors. 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.
General Motors Media Statement Attributed President & CEO Fritz Henderson
Today we learned that Penske Automotive Group (PAG) has decided to terminate discussions with General Motors to acquire Saturn. 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. PAG's announcement explained that their decision was not based on interactions with GM or Saturn retailers; rather it was because of the inability to source new products beyond what it had asked GM to build on contract.
As a result of PAG's decision, we will be winding down the Saturn brand and dealership network, in accordance with the wind-down agreements that Saturn dealers recently signed with GM. Pursuant to the terms of those agreements, the wind down process will be determined and communicated shortly.
Saturn customers and owners will continue to be able to purchase and have their vehicles serviced at Saturn retailers during this process. Once the wind down is complete, Saturn owners will still be able to have their vehicles serviced at other GM dealerships. We will be communicating with our customers very soon to explain the next steps in this process.
Today's disappointing news comes at a time when we'd hoped for a successful launch of the Saturn brand into a new chapter. We will be working closely with our dealers to ensure Saturn customers are cared for as we transition them to other GM dealers in the months ahead. I'd also like to thank every GM employee and Saturn retailer who worked so hard to try to make this new beginning happen for Saturn.
Reader Comments (Page 1 of 7)
MeiSooHaityu 5:00PM (9/30/2009)
Kind of sad. Saturn was marketed as the consumer orientated brand. They had some neat products (even if they were re-badged vehicles).
Too bad it didn't work with Penske
Reply
Sea Urchin 5:06PM (9/30/2009)
Those Renos would have sold like hotcakes in USA.
Luis 5:10PM (9/30/2009)
Original Saturns were not re-badges. If only Saturn had stuck to its guns and maintained it's brand loyalty it enjoyed in the 90s. GM royally F*ed Saturn up, and GM deserves what it got in return. All those loyal Saturn SL owners now drive Camrys and Accords. Saturn COULD have been what Mini is today, a growing brand with a cult following.
Bravo, GM.
Bob-omb 6:36PM (9/30/2009)
Word, Luis. The first Saturn was honestly a revelation. It was a safe (for the time) car with an efficient, modern powertrain and it was a total smash success. And you STILL see those 90's Saturns all over the roads. They weren't just assembled well, they were also arguably the most reliable product GM had ever offered -- and better than many of GM's followup efforts. Yet after years of mostly cosmetic updates....the Ion replaced it. And people wonder why Saturn is dead. So sad.
nrb 6:46PM (9/30/2009)
When GM started "rebadging" vehicles with Saturn, I remember speaking to the General Manager of several Saturn stores. It was a very sad day for him, as he predicted it would be the death of the brand. Looks like he was right.
heltersceltic 8:00PM (9/30/2009)
"Why else do you think walmart sales continue growing [?]"
This has more to do with the skyrocketing numbers of working poor in the US. Walmart was a huge failure in Germany.
"Anyway give 10 years, i bet 50% of cars sold here will be made in China."
And when 50% of Americans are out of work, I guess that's all we'll be able to afford.
shortshifter 10:11PM (9/30/2009)
@ Luis:
1) how many of the 'original' Saturns did you buy? not enough people did.
2) despite the best product lineup in their history ("rebadges" or not) there just was not enough room in the industry for the brand. period.
Fact is, those 'original' models were POS compared to the latest models.
Give it up, it just didn't work within General Motors. There was no need for it in the current market, and therefore it failed. Perhaps the dealership experience was one area that GM lost sight of, but that doesn't explain it all.
Judy Zik 10:15PM (9/30/2009)
+1
My husband still uses a 1999 Saturn SL1 for daily commuting with over 250,000kms on it. It is essentially the same vehicle as the first SL1 that rolled off the assembly line in 1990. They had created a really good platform and car for it's day. Unfortunately that is as far as it went. GM left them to rot on the vine. The interior needed some refinement but never got it and it took GM engineers 10 years to address the engines burning oil.
Saturn vehicles were miles ahead of anything GM was building in the 1990's. It was obvious that thought and effort went into designing them. Had they continued to refine them GM might have been competitive 15 years ago instead of playing catch up now. As it stands up until perhaps the recent Cobalts the 1990 Saturn SL1 was a far superior small car to anything sold under the Chevrolet banner.
campasini1 11:25PM (9/30/2009)
i have on of those old saturns you guys are talking about and it has over 250k miles on last year the alt and transmission went out put thats it,great car. was my moms when she passed i kept it and im still driving it daily.
dukeisduke 12:14AM (10/01/2009)
Chevrolet hated Saturn from the get-go, and felt that GM screwed them by creating Saturn and giving them the funds to do the SL-series, instead of spending the money on Chevrolet. But then in the late '80s and early '90s, Chevrolet's name was MUD as far as consumers were concerned. Saturn was able to make buyers forget they were a GM brand, and sell cars that Chevy could never have. Don't forget that early on, Saturn had a coolant-related engine problem with about 2,000 cars, and instead of fixing the cars, Saturn replaced them with new vehicles and scrapped the recalled ones (Wow!). That proved to owners that Saturn was serious about quality.
Then, when Saturn owners wanted a bigger car, GM screwed them by pushing a reworked Opel (not even built in a Saturn plant) instead of a clean sheet car like the SL-series. They also waited way too long to give them the Vue. GM really blew it with Saturn, chasing off plenty of loyal owners.
It will be sad to see them go, but they wouldn't have been the same company, just selling rebadged Asian products.
daleam 12:42AM (10/01/2009)
"dukeisduke - But then in the late '80s and early '90s, Chevrolet's name was MUD as far as consumers were concerned."
You mind giving me the number to the dimension of this alternate reality? Because in this dimension, Chevrolet was still a top selling brand in the US as late as last year and even last month.
jv2k 12:52AM (10/01/2009)
Saturn failed because it was a stupid decision to make for three reasons.
First reason is that GM should have put that effort into improving what they had. Instead of superior J-bodies we got new saturns, instead of new midsized offerings we got a new saturn version, and instead of giving money and development to brands that needed it they made a new brand. Given the amount of time and money it took to kickstart the brand it was just a stupid way to "beat the imports at their own game".
The second reason it failed was because it followed the old outdated and unsustainable GM model of being a separate brand. GM couldn't afford to keep it's old brands completely separate it couldn't sustain dumping money into platforms and engines that would only serve one of their badges. When the cost of one platform gets you 3 cars vs one it's easy to see why GM couldn't keep it. It could have worked out if it became GM's experimental brand, but the developments from saturn didn't leave the brand.
The last was that they moved saturn upmarket and that was just a stupid thing to do at the wrong time. GM might have been able to pull of Opel Saturn the recession hadn't hit but it did and given that the cars were more expensive and the user base was alienated and Saturn withered and died.
All in all Saturn was a brand that shouldn't have even existed and it's existence as it was born was unsustainable. GM tried to keep it alive by changing the brand's focus but tough times made that unsustainable as well.
MeiSooHaityu 10:24AM (10/01/2009)
"Those Renos would have sold like hotcakes in USA." - Sea Urchin
:lol: I rememer the last time we had Renault here. I believe that was the Eagle Premiere / Dodge Monaco. Not so good sellers :)
James 1:33PM (10/01/2009)
GM is analogous to one big bureaucracy...just like the US Federal Gov't. Saturn is like one of many overlapping "gov't agencies" (to Chevy, Buick, etc) that is now being "purged" along with Pontiac....
Mike Se7en 5:01PM (9/30/2009)
That's a shame, I was looking forward to the Renaults.
Reply
inteller 7:51PM (9/30/2009)
Nothing will stop Renault from getting into the US in another way. Volvo is still for sale.
Lars 8:29PM (9/30/2009)
Inteller-
Renault has not just one but two channels into the US: Nissan and Infiniti.
VictorRaikkonen 10:57PM (9/30/2009)
@Lars" Thank you mate, I think a lot of people either forget, or are unaware, that Reno has an open door into the US as it is. They really do not need help from anyone, let alone Saturn/Penske.
Weaksauce 1:43AM (10/01/2009)
250k in km = 155600ish miles
That's not a big deal. My Jetta, has about 170k Mi on the clock.
I've replaced the starter. That's it.
Are you saying that it's as reliable as any other auto mfr?
Or are you saying that it's exceeded your expectations?
At one time, the thought of Mercedez-Benz guaranteeing a diesel for 200k miles sounded amazing.
Truth be told, ANY car, modestly maintained, should be able to achieve that.
Judy Zik 11:20AM (10/01/2009)
@weaksauce since you seemed to be replying to me.
250,000kms replaced nothing other than oil, one battery and brake pads. So yes I consider that reliable.
We live in Ontario where they heap salt on the roads every winter. Around here getting to 250,000kms on a vehicle without any major work is not common.