(Updates with details on Black Oak, statement from GM)
By Kate Linebaugh and Sharon Terlep
With time running out for General Motors Corp.'s (GM) troubled
Saturn brand, a group that includes private-equity firm Black Oak
Partners LLC came forward Wednesday as potential buyers.
The group would initially sell GM vehicles through Saturn's
network of 440 U.S. and Canadian dealers and later aim to add
vehicles from other auto makers and would seek to transform Saturn
into a fuel-efficient brand.
A GM spokesman said Wednesday the Oklahoma City-based Black Oak
group is among several bidders interested in Saturn, and that the
auto maker plans to update dealers within the next week on the
future of the brand.
GM in February promised it would have more clarity on Saturn by
April 17.
The auto maker is struggling to offload Saturn, along with its
Hummer and Saab brands, as it faces a June 1 deadline to
restructure the business or face a government-ordered bankruptcy. A
$13.4 billion government loan is keeping GM afloat as the company
scrambles to slash billions in debt and overhaul its global
operations after President Barack Obama shot down the company's
first survival plan.
John Pappanastos, a spokesperson for the investor group , said
they have had contact with officials from the Treasury Department
after they made their offer to GM on April 8. The group also has
received gauged interest from other manufacturers seeking a
distribution network, such electric vehicle companies, Pappanastos
said.
The precarious financial state of GM's ailing brands and a
global credit crunch have complicated GM's efforts to find buyers
for its brands.
GM spokesman Steve Janisse said the company is weighing several
options for Saturn, including spinning the unit off to its
dealers.
GM, in a statement, said it "is simply premature at this time to
speculate on what any eventual outcome may be," for Saturn. "When
we have additional information on this topic, we will communicate
to all involved."
Saturn, created by GM in 1985 to fend off competition from
Japanese-based rivals such as Toyota Motor Co. (TM), has
underperformed GM's already dismal company-wide sales. In December,
GM announced a plan to kill or sell Saturn by 2011.
In February, The Wall Street Journal reported some Saturn
dealers want to spin off the brand and sell it separately. At the
time, then-Chief Executive Rick Wagoner said the company could be
very open to such an offer. Wagoner was ousted in late March by the
U.S. government.
The Black Oak group said its proposal for the brand would
preserve 10,000 U.S. jobs and keep the Saturn retail network
alive.
The parties didn't provide financial details of the proposal,
but the investor group's Pappanastos said the investor group
expects that it will take capital investment to transform the
brand.
The investment group bidding on Saturn includes several
investors in addition to Black Oak, an Oklahoma-based private
equity fund that owns auto consultancy EFG Companies, which was
founded by Oklahoma car dealer Bob Moore. Bob Moore Auto Group in
Oklahoma City currently has a Saturn franchise.
Black Oak is involved in auto distribution and services, oil and
gas and real estate businesses, among other ventures.
A spokesperson for the group wouldn't say where the financial
backing from the deal would come from or who else is involved but
said the information will be forthcoming in the next five to 10
days.
The group says its proposal would relieve GM of franchise
agreement liabilities and fallout on other brands if it closed
Saturn dealerships, and would give the Saturn retailers the
opportunity to make returns on their existing operations
-By Kate Linebaugh and Sharon Terlep, Dow Jones Newswires;
248-204-5515; kate.linebaugh@dowjones.com