Saturn, No More...Dead and Gone

Poor Saturn. Our sympathies to all Saturn owners.

From Automotove News:

General Motors Co. said it will begin to phase out Saturn -- the car company conceived more than 25 years ago to fend off imports -- after potential buyer Penske Automotive Inc. failed to secure a source of vehicles to keep the brand afloat.

“We will be winding down the Saturn brand and dealership network,” GM said in a statement today. "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.”

Penske had been in discussions with unidentified automakers around the world to develop a product portfolio for Saturn after a sale by GM. The retailer had negotiated terms of an agreement to source vehicles from another automaker, but the automaker’s board rejected the deal, Penske said.

“Without that agreement,” Penske said in a statement, “the risks and uncertainties related to the availability of future products prohibit” the vehicle distributor from moving ahead with the deal.

A source familiar with the negotiations told Automotive News that it was France’s Renault SA that had decided not to work with Penske.

In July, Renault said it had been approached by Roger Penske, CEO of Penske Automotive, about supplying vehicles to Saturn. Earlier reports suggested that Penske Automotive might buy vehicles from Renault’s Korean unit, Renault Samsung Motors, for Saturn.

13,000 jobs at stake

GM said it will determine and communicate to dealers how it plans to wind down the Saturn brand and dealership network “shortly.”

Saturn customers and owners will continue to be able to purchase and have their vehicles serviced at Saturn retailers during this process, GM said. Once the wind-down is complete, Saturn owners will be able to have their vehicles serviced at other GM dealerships.

GMAC Financial Services said in a statement that it will continue to provide financing options to Saturn dealers and customers during the wind-down.

GM, which emerged from bankruptcy in July, had said it aimed to finalize the agreement with Penske in the third quarter -- a deal it had said could preserve more than 350 franchises and 13,000 jobs.

As part of its bid for federal rescue loans, GM on Dec. 2 told Congress that it may sell Saturn in order to focus on four core brands. At the time, GM also said it would turn Pontiac into a niche brand. It, like Saturn, is scheduled to be shut down.

Months of ‘limbo’ time

Dealer George Nahas has been through the brand-closing trauma before. Nahas, owner of two Saturn stores in Alabama and Florida, owned an Oldsmobile dealership in 2000 when GM killed that brand.

He says this latest news is disappointing, but it at least provides clarity for his future.

“We’ve been in limbo since Dec. 2,” Nahas said. “The brand has been damaged since then. Penske buoyed our spirits and our hopes. Our spirits were high because we thought the Penske deal was going to go through. At least now we know what it is, and we know what our destiny is, right? We can act accordingly.”

Nahas says he has some import brands that want him to carry their products. “I guess I’ll be selling the competition.”

Golden touch

Detroit industrial hero Roger Penske, 72, had proposed stepping into the unprecedented role of taking over a doomed brand without owning a single auto plant.

GM had agreed to continue selling Penske three Saturn models -- the Aura, Vue and Outlook -- for two more years. After that, Penske would have to put together a portfolio of new products from wherever he could source them.

The white-haired Penske is a familiar face in U.S. racing circles. Penske’s firm also rescued Detroit Diesel Corp. two decades ago after GM decided to sell off that business. It also acquired and restored motor speedways around the country.

Penske Automotive is the nation’s second-largest automotive retailer, with new-vehicle retail sales of 171,872 units in 2008, according to the Automotive News Data Center. It also distributes the Smart ForTwo, made by Mercedes-Benz, in the United States.

John Pitre, general manager of Saturn of Bakersfield in California, said, “If Roger didn’t think it would work, then it won’t work.”