• Sep 30th 2009 at 4:55PM
  • 87

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]

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.

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    • 1 Second Ago
      • 5 Years Ago
      Next up, closing Hummer.

      How does Tengzhong think they can maintain Hummer production if they have no factories in the US? It's the same problem Penske had trying to figure out how to run Saturn. Tengzhong isn't a car company, they don't have factories in China that can produce Hummers once the production contract for the current models expires. Even if they did, nobody who still wants to buy a Hummer in America would want to buy one from China.

      The number of Hummers currently on the market has reached carrying capacity as the values of pre-owned Hummers plummets. The canceled agreement between GM and Penske with Saturn should give Tengzhong a wake up call, possibly even Koenigsegg. The world has too many car brands and not enough consumers willing to buy cars from brands whose sales are in the gutter worldwide. US sales of all three of "Old GM's" for-sale brands have fallen over 60% from last year's levels, which weren't exactly stellar in the first place.
        • 5 Years Ago
        They already announced that they would build a new Hummer headquarters in the US and continue to build them at factories here in the US. The Chinese government approved of the purchase recently. All is good to go.
        • 5 Years Ago
        Hummer does have a manufacturing plant. It's the AM General facility in Mishawaka, IN.

        In fact, the whole deal involves the Chinese keeping production at Mishawaka, and probably moving H3 production up there from Shreveport eventually.
        • 5 Years Ago
        I guess a Chinese company building pseudo-military vehicles in a plant owned by a company itself created to isolate military production from foreign influence makes sense given the climate of tolerance in today's society.

        Seemed nobody noticed when Daimler *acquired* Jeep that the nearly first order of business was to demolish the plant that produced huge quantities of vehicles that were instrumental in winning WWII.
      • 5 Years Ago
      A shrewd, successful businessman like Roger Penske dealing with the bunch of blithering prats that heads GM? This news comes as no surprise whatsoever.
      • 5 Years Ago
      Saturn had serious potential, and a really great following of customers.

      Although I seriously was skeptical that Penske could pull it off, it's sad nonetheless

      RIP - possibly the most promising brand in GM history, yet the most ignored
      • 5 Years Ago
      That's a shame, I was looking forward to the Renaults.
        • 5 Years Ago
        @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.
        • 5 Years Ago
        Nothing will stop Renault from getting into the US in another way. Volvo is still for sale.
        • 5 Years Ago
        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.
        • 5 Years Ago
        @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.
      • 5 Years Ago
      To me the biggest shame is that Saturn's current line up is actually pretty good. Even though it has way too many badge-engineered siblings, and the Saturn badge looked a bit out of place on such a big vehicle, on its own, the Outlook is definitely a competitive 7-seat SUV. The Aura is a nicely designed Opal derivative, and while arguably a little low on power, the Astra deserved to be on anyone's small 4-door hatch short list. While I personally believe, the Sky/Solstice duo are barely fit to Armorall the Miata's tires, plenty feel otherwise. But really it is the other three competitive vehicles in very large segments that matter, and it seems they all came out at a point when Saturn had nothing to spend to market them.

      Oh well, I already own an Isuzu and a Saab, maybe I'll buy my son a Saturn for his first car and call my garage the Orphanage.
      • 5 Years Ago
      That was fast.

      When the agreement to take over Penske was first announced, it just didn't seem to make sense to me. I knew that Penske is an incredibly talented and successful businessman, but it just didn't seem to make sense. I wish he'd been able to make it work, but I was very skeptical. I thought this would fail, but didn't expect it to fail before it even got off the ground.
      • 5 Years Ago
      Saturn had the only GM product i was interested in. When it was stated they would no longer provide products to Saturn, GM feel off my radar screen. After looking at the Korean products, I wasn't impressed with them. Saturn is already gone to me. I feel sorry for those that have paid hard earned money on them thinking they would still be around.
      • 5 Years Ago
      Wow. Kinda scary for Saturn. They might as well bend over and take it at this point. Saturn has potential, and it was ready to show it with the new models. Now, it is looking as distant as the planet.
        • 5 Years Ago
        Boxer - the Aura wasn't imported. It used the chassis of the Vectra wagon but shared nothing with the Vectra except for the bonnet, front wings, mirrors and a few minor incidentals.
        • 5 Years Ago
        GM will not last, who do they think they are trying too fool? We are not the same people who purchased GM cars in the 1970's because GM said so.
        The hole "old GM' and "new GM" is absurd, that's like saying "old Bin Ladden" is much worse than "new Bin Ladden".
        They are doomed and hopefully our Government won't see fit to bail them out the next time.
      • 5 Years Ago
      This is a sad day for GM....
      • 5 Years Ago
      Saturn deserves to wither away. For many years to GM allowed Saturn to languish with old unattractive product. Contrast Saturn with Mini and Scion. Even if Penske had secured a supply deal Saturn's future would have been iffy at best.
      • 5 Years Ago
      Like I said back in February regarding the President’s decision to not have a Car Czar, “There needs to be a trail boss here!”

      See at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aQHVRdBzyUxI

      Now, taxpayers should demand to learn “Who’s in charge here!?!” as we still “own” part of this mess by virtue of the TARP loans and God knows what else was promised by the President’s Automotive Task Force to keep GM afloat.

      See more at: http://carczarconsulting.com/09/30/gm-to-shut-down-all-saturn-stores-penske-board-rejects-talks-to-buy-gm-brand/
      • 5 Years Ago
      Very sad.
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