Saturn Letter Describes Spinoff Possibility

The Saturn Vue



A letter was sent out last night from Jill Lajdziak, who is Saturn's General Manager, warning customers that the company may be spun off from General Motors. This would be the best case scenario for the plucky auto manufacturer.

As part of GM's restructuring plan submitted to Congress Tuesday, the Saturn brand will be phased out with the last models appearing in 2012. GM is also trying to sell the Hummer line. Eliminating Saturn will reduce GM's production costs, payroll costs, advertising costs, etc., but it sure is bad news for existing, loyal Saturn owners.

Saturn was in the process of producing a plug-in Saturn Vue, but since this financial crisis, I have heard nothing further about its release. In fact, they originally were going to market the plug in version this year but that date has slipped. The last date I heard for this car was in 2010, but it looks like that is in jeopardy. The plug in Saturn Vue was going to be a great car because it could run for about 10 miles solely on battery power. For many folks, this means that the local running around and short errands could be accomplished without gasoline.

Let's hope Saturn can somehow survive.

From Automotice News:

Saturn has begun alerting customers that it may be spun off by General Motors as an independent marketing and distribution company.

In a letter sent to about 1.5 million Saturn owners last night, Saturn said it would have to line up products to sell -- either from other manufacturers or from GM in the role of a vendor -- after GM's current commitment to build Saturn products ends after the 2012 model year.

"The Saturn Distribution Corporation already exists as an indirect subsidiary of GM," wrote Jill Lajdziak, general manager of Saturn, in the letter. "It's the entity with which our retailers have their franchise agreement.

"An independent Saturn would still have its great retailers, and it would continue to source current products from GM through 2011. If successful, SDC at that point would source products from other manufacturers."

A Saturn spokesman confirmed the letter and its contents. The purpose of the letter is to reassure current and potential Saturn owners that Saturn is a viable brand and that GM will back its warranties and product quality, says spokesman Steve Janisse.

The goal of a spinoff would be to find future vehicles "that match the Saturn Brand: fuel-efficient, safe, reliable and affordable," Lajdziak said. "From a retailing perspective, we would build on our core strength of unmatched customer service."

No decisions for 60 days

Meanwhile, Saturn dealers say Saturn asked them on Wednesday to make no decisions about what to do with their stores for at least 60 days. That's because Saturn has formed a study group consisting of Saturn retailers, GM employees and independent consultants to do the "hard-core due diligence" work on what it would take to spin off Saturn, said Janisse.

The subcommittee will study possible sources of future product, either from GM or another manufacturer, which might take over Saturn, Janisse said. Another possibility is for an independent investment company to take over a spun-off Saturn and give it the money to buy product.

"That's what that subcommittee is studying, and they're working day and night on this," Janisse said.

"The goal is within 60 days to have a solid understanding of if the current spinoff option is valid," Janisse said.

But he said a decision might be delayed if the process isn't complete.

In its viability plan submitted to the U.S. Treasury Department on Tuesday, GM said Saturn will remain in operation through the end of the planned lifecycle for all

Saturn products. In the interim, GM said it would be open to the possibility of Saturn retailers as a group or other investors present a plan that would allow a spinoff or sale of SDC. If that didn't occur, GM said it planned to phase out the brand.