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Saturn No More- Roger Penske Takes a Hike, General Motors to Pull the Plug

Travis's picture




 

I once met Roger Penske, oh, rather- I met his son when I was in the car business.  He was a smooth dude, a good-looking guy who seemed to make the ladies sigh, and put men of all powers and postions shake their heads in the right direction.  They wish they were he; or rather they wish they were his father, Roger Penske.

And who wouldn't want to be Roger Penske?  You're a self-made billionare, a bona fide legend in the business and automotive world.  And hell, you even once raced cars!

So when news that Roger Penske's Penske Auto Group (PAG) signed-on to be the new Saturn, we all knew, if anyone could do it, it was Penske.

General Motors announced today that it's pulling the plug on Saturn, amid an agreement with PAG falling-through.  Concerns of a supply and a production agreement after the initial contract runs out with General Motors sent even Penske running the other way.

"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," Henderson said in a written statement according to the Associated Press. "PAG's announcement explained that their decision was not based on interactions with GM or Saturn retailers."

Penske's beef, not with GM or Saturn, but rather, the company that would produce the likable cars "people want to buy" after GM. 

The other manufacturer was not disclosed- at least not yet.

Without the agreement, not even the mega-motor buck hero could assure Saturn's continuation in world and market after Cash for Clunkers.

PAG had agreed to take the driver's seat at the Saturn brand and dealer network, at the height of GM's reorganization as a "new" and "leaner" car manufacturer, with GM producing the cars for a limited time.

Shares of PAG rose in Wednesday's trading. 

Obviously, people want to buy Saturns.  Just not enough for anyone willing to produce them.

 

 

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Wed, 09/30/2009 - 17:58 | 84322 Miles Kendig
Wed, 09/30/2009 - 18:06 | 84334 Cow
Cow's picture

Does this help or hurt GM's chances of paying back the $65 f'in billion they owe us?  I'm confused.

Obama still out of town?

Wed, 09/30/2009 - 22:09 | 84637 Anonymous
Anonymous's picture

You don't repay a gift, do you? That pile of cash is being burned using every accelerant known to businessmankind.

Wed, 09/30/2009 - 18:12 | 84337 Bubby BankenStein
Bubby BankenStein's picture

It sounded sweet at the time, but once you get a good look under the hood?  Run!

Wed, 09/30/2009 - 18:13 | 84343 docj
docj's picture

And with that, my chances of ever-again buying an "American" car falls from zero to about -25%.

Wed, 09/30/2009 - 18:41 | 84374 Anonymous
Anonymous's picture

Well, this makes it easy for me. I couldn't decide between the Saturn SUV or the Benz G wagon. I guess it's the Benz..........

Thu, 10/01/2009 - 00:11 | 84799 Rick Blaine
Rick Blaine's picture

Nice.

Wed, 09/30/2009 - 18:48 | 84384 ozziindaus
ozziindaus's picture

The big three's demise was not due to free market forces or incompetence but instead strategic and deliberate. US creditor nations needed manufacturing and export and the US debt machine needed credit. A deal was struck and the die was cast. GM and Chrysler faked their own death and Ford's family pride avoided the same. With bankruptcy, all prior contracts with unions, suppliers, bond holders and dealerships were voided and sepration from it's booming Asian entities formed to prevent litigation. For the cherry, taxpayer money was then doled out to investment banks that held it's debt (don't expect that back). Incompetence is humiliating, treason is a crime.

Wed, 09/30/2009 - 19:31 | 84438 Cognitive Dissonance
Cognitive Dissonance's picture

Three cheers for globalization and the mass (financial) murder of the American middle class.

While the global interests are attempting to upgrade the rest of the under developed worlds' standard of living by exporting (American) manufactoring jobs to them, many Americans didn't see that the same calculation required the lowering of the American standard of living.

Mission Accomplished!

Wed, 09/30/2009 - 21:07 | 84551 Anonymous
Anonymous's picture

although it took a few decades to implement
you are right that the demise of the american
auto industry was planned - not a cacaphony
of random acts of stupidity....

Wed, 09/30/2009 - 19:03 | 84404 fil
fil's picture

Penske knows when to fold 'em.

Thu, 10/01/2009 - 07:13 | 84957 ToNYC
ToNYC's picture

revised below

Thu, 10/01/2009 - 07:07 | 84960 ToNYC
ToNYC's picture

All these points miss the "beef"..no clue as to the killer app or product PAG was to be serving up. Connecting the dots through his Detroit Diesel transformation of GM's diesel fiasco in the late 70's to the eventual sale to Daimler....more dots...a clean turbo-diesel (TDI BlueTec) product like the 2009 VW Jetta TDI to be sold through the Saturn pipe. The rub was that BlueTec is a JV between BMW and Daimler...now we have VW/Porsche in the mix and rolling out this super mpg stats and in the real world wonder, and to my mind a $4,000 lithium battery/ electric hybrid Chevy Volt killer...all German..where is the Yank at the table spread for the all-German experience? I thought the missing link was why the Germans would share out their game changer, but I don't know..just wondering. Now it looks to me that the missing link was only PAG's need for the beef and not much else behind the curtain and that just didn't make it happen.

Wed, 09/30/2009 - 19:23 | 84431 Anonymous
Anonymous's picture

This was a good decision in an industry with a short supply of the same. There was no way Saturn could be competitive over the long term. Roger is smart - his occasional appearances at GE Board meetings notwithstanding.

As for the money GM owes the American people, that is gone. Just like Saturn.

Wed, 09/30/2009 - 20:06 | 84494 Anonymous
Anonymous's picture

Sweet!

Wed, 09/30/2009 - 20:49 | 84526 grunk
grunk's picture

They weren't Penske material.

 

C'mon somebody had to say it.

Wed, 09/30/2009 - 21:01 | 84546 ozziindaus
ozziindaus's picture

Ahhh the Penske file. Maybe Roger realized he'd have to deal with a company full of Costanza's

http://www.youtube.com/watch?v=D-TbTzUASco

Wed, 09/30/2009 - 21:55 | 84614 Anonymous
Anonymous's picture

"Saturn makes cars people want to buy!!"

Oh, yeah? Well millions of them looked at Saturn's offerings and said "no thanks". They went to a Toyota dealer and spent their money there instead. And GM just couldn't figure it out...

I recall reading several years back that Toyota had a market cap ten times the size of GM's. I thought to myself then that: "It's all over. They can't compete against that".

I was right, but I take no pleasure in it.

CJ

Wed, 09/30/2009 - 22:16 | 84643 Anonymous
Anonymous's picture

How many people know that GM just built a state of the art Buick factory in China within the last 3 years. Bankruptcy my ass.

Thu, 10/01/2009 - 02:17 | 84889 Slewburger
Slewburger's picture

GM has also been running engineering out of India, along with Navistar, Ford and suppliers...

CAT has been casting engines in developing nations for over a decade....

Remember this little gem?

http://www.npr.org/templates/story/story.php?storyId=100616131

I really laughed when the great O had that press conference with Owens and said the stimulus would go right to places like CAT.... They were laying those people off anyway as part of their global buisness plan. Its an unbeatable tide.

I love how one of these jackass VPs comes up with idea and the lot follows along...

Monkey see monkey do.

Thu, 10/01/2009 - 00:10 | 84797 Rick Blaine
Rick Blaine's picture

This DOES NOT bode well for GM...not one bit.

Maybe I am way off base, but it was my impression that Saturn was one of the GM brands that did "OK" with respect to selling smaller cars, etc.  Well, let me put it another way, I was more likely to buy an Aura than a Malibu...

...of course I went with a Camry instead.

Thu, 10/01/2009 - 00:27 | 84817 glenlloyd
glenlloyd's picture

As I saw it Saturn products (as warmed over and unappealing as they are) were always incarnations of other GM owned manufacturers. How to maintain the relationship with Holden or Opel became the insurmountable issue in the end. With GM cutting ties to every non-core process, except maybe Opel, it would be very difficult to continue production at Saturn without agreements with every one of the component suppliers. And if GM no longer owns the maker who supplied the components the playing field would be completely different.

I liken it to the problem with spinning off Pontiac or even Oldsmobile back in 2004. It simply couldn't be done because there was too much sharing between divisions. To attempt it would require including a certain amount of technology that would be required in order to make the sale palatable. And beyond that the buyer of the name would be producing vehicles that the remaining GM brands would be competing against. It simply wasn't an option to sell either Olds or Pontiac.

And yes, GM builds Buicks in China, they get a Park Avenue that isn't available in the US, and GM is prepping a factory in St. Petersburg IIRC. The Chinese Park Avenue is based on the Holden Statesman which uses the Zeta RWD platform that also underpins the new Chevy Camaro.

Thu, 10/01/2009 - 01:47 | 84876 j0sh1130
j0sh1130's picture

i laughed so hard when i saw this headline earlier today and thought of that commercial.

Thu, 10/01/2009 - 08:36 | 85016 Translational Lift
Translational Lift's picture

Penske didn't get where he is by buying crap or bad deals.....no supprise here....

Thu, 10/01/2009 - 08:42 | 85023 Anonymous
Anonymous's picture

The Saturn was a piece of shit from day one. Anyone who bought one had to be an idiot.
Good riddance!

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