GM: Saturn-Penske Deal Saves 350 Dealerships, 13,000 Jobs
05 Juni 2009 - 4:36PM
Dow Jones News
Each of General Motors Corp.'s (GMGMQ) 350 U.S. Saturn
dealerships will receive offers to continue selling the vehicles
under a tentative deal announced Friday to sell the brand to mega
dealer Roger Penske.
Penske, who runs the Penske Automotive Group (PAG) chain of
dealers, will take over the brands, trademarks, service and parts
operations and distribution operations related to the Saturn.
"We will have a completely independent company, and it will be
lean," Penske said in a conference call with reporters Friday.
GM filed for bankruptcy Monday, and as part of its restructuring
plan hoped to sell the lineup it launched in 1984 as "a different
kind of car company" to battle foreign-based rivals such as Toyota
Motor Corp. (TM).
In addition to taking over the retail network, Penske will
strike deals with various auto makers, including GM and Renault SA
(RNO.FR), allowing him to buy vehicles from those auto makers'
factories to fill out the Saturn vehicle portfolio.
GM and Penske have a memorandum of understanding signed, and the
deal is considered tentative at this point. Penske declined to
disclose the price tag of the Saturn deal. He said the sale is
expected to preserve around 13,000 jobs. Penske already has an
exclusive deal with Daimler AG (DAI) allowing him to distribute
Smart mini cars in the U.S. He essentially serves as the U.S. sales
and marketing arm of Smart, and works to provide a network of
dealers with Smart cars. Penske said Friday he has no plans to join
Saturn with Smart dealerships.
Penske will initially buy Saturn vehicles from GM that are
already part of the Saturn lineup, but eventually branch out to
purchase vehicles from Renault and its Korean Samsung Motors unit.
Other auto makers could also be part of the arrangement.
Saturn, he said, would eventually grow to a global brand with
more vehicles in its lineup. Short-term plans call for keeping the
Outlook crossover, Aura sedan and Vue SUV. The Saturn Sky roadster
won't continue.
The brand's dealer network had been widely lauded for its good
customer service, which introduced a "no haggle" approach to auto
sales. It dealerships are more modern than the average GM-brand
dealership, and they tend to be stationed in more desirable
locales.
Despite the advantages, the company never delivered what GM
hoped for and has lost money since its inception.
The Saturn deal represents the second preliminary sale GM has
reached this week in relation to its U.S. brands. Earlier this
week, Tengzhong Heavy Industrial Machinery Co., based in China,
agreed to a preliminary deal to buy Hummer. That deal is subject to
regulatory clearances in China, and is not expected to be finalized
until the third quarter.
GM began pursuing strategic options for Saturn earlier in the
year and hired longtime auto analyst and United Auto Workers
advisor Steve Girsky to explore a sale of the brand after it became
apparent the company no longer had enough money to fund its eight
U.S. brands. Girsky worked with hundreds of Saturn dealers around
the nation to find the appropriate buyer in a relatively short
period of time. The auto maker is still working to sell its Saab
operation in Sweden, and is in a tentative deal to sell a stake in
German Opel division to Magna International Inc. (MG.A.T)
-By Sharon Terlep and John Stoll, Dow Jones Newswires;
248-204-5532; sharon.terlep@dowjones.com