Penske Deal Falls Apart, Saturn Likely Going Under

Debates continue to linger in regards to the closure of operational dealerships at General Motors, but another set of dealerships will likely go out of business following recent news regarding GM’s Saturn division. Heading into bankruptcy GM was an automaker made up of eight separate divisions, but it had vowed to emerge from the proceedings a more streamlined unit with only four core divisions (Buick, Cadillac, Chevrolet and GMC). Talks immediately began swirling as Roger Penske’s automotive group showed interest in purchasing Saturn, but today both the Penske Automotive Group and GM announced that the talks have been terminated and that Saturn is likely follow the same fate as GM’s Pontiac and Oldsmobile division.

Penske had originally sought to purchase the Saturn Corporation from GM in an attempt to bring new, unique vehicles to the United States similar to how the company is responsible for bringing Daimler AG’s smart fortwo to the U.S. One of the major players said to be involved with Penske’s plan was the French automaker, Renault, who would supply vehicles to the new Saturn through its South Korean subsidiary, Renault-Samsung Motors. The biggest problem posed through this plan is that GM only guaranteed current vehicles (Saturn Aura, Saturn VUE and Saturn Outlook) through the end of 2010, but to engineer an import vehicle to meet U.S. crash and emissions standards would have taken longer than that. A lapse in product would spell disaster for Saturn retailers and it would likely leave Penske’s company open to lawsuits from its retail chain.

Brief statements were released both by Penske Automotive and GM in regards to the termination of talks between the two. According to the Penske Automotive press release, Penske had been in talks with an unnamed automaker to act as a supplier to the new Saturn, but terms of a contract were negotiated by that company’s board of directors. The reaction from GM was somber as it seemed hopeful that Saturn could be kept alive and the 350 dealerships and 13,000 jobs could be preserved.

Some Saturn retailers are holding out for another bidder to come along and save the brand, but if Penske couldn’t do save the company, it’s likely no company could. Another sign that Saturn will not be saved is the fact that Volvo has been on the market without any serious bidders to Ford Motor Company, and Volvo is arguably a much more viable automaker than Saturn.

In light of this situation, GM said it would wind down the Saturn brand and its retailers “quickly,” and that customers can still purchase new Saturn models and have their current vehicles serviced at dealerships. Once the brand has been dropped, Saturn customers can have their vehicles worked on at other GM dealerships. The only vehicle in Saturn’s recent lineup that didn’t have lineage to another GM vehicle in the U.S. was the ill-fated 2008 Saturn Astra which only survived for a single model year.

The Saturn Corporation started as the small imports grew in popularity, and the first prototype was unveiled in 1983. It officially launched 1990 with the S-series that gained a reputation for its dent-resistant, plastic body panels. It wasn’t until 1999 that Saturn’s lineup grew to include the L-series, and from there the company eventually grew to six models by 2007.