Saturn has bidders. That raises thorny questions.

Posted by: David Welch on April 15, 2009

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Who would want Saturn? At least one bidder has popped up with an interest in buying the brand to set up a retail network to sell foreign cars and energy-efficient vehicles. An investor group that includes private equity firm Black Oak Partners has contacted both GM and the Treasury Department about buying the brand. The goal would be to stock Saturn retailers with green vehicles from small startups and high-mileage cars from foreign carmakers who would be new to the U.S. market. “We’re looking at a rebirth of the Saturn brand,” says John Pappanastos, CEO of EFG Companies, which is involved in the acquisition. “The brand has done a pretty good job of finding consumers who like the no-haggle purchase and a green vehicle.”

Selling Saturn as a distribution chain does bring up some thorny questions for GM and the Treasury Department. On one hand, it would spare GM from having to compensate its retailers if the automaker—which is struggling to restructure and avoid bankruptcy—just kills off the brand. It would also save GM’s dealers, some of whom sell Saturn cars and other GM brands, from financial distress. And it would preserve some 15,000 jobs. On the other hand, Black Oak’s group wants to form its so-called new Saturn Distribution Corp. to possibly sell cars from Chinese, Indian and European carmakers who aren’t here in the U.S. Since starting a retail chain is a huge expense, the group would knock down a big barrier to entering the U.S. market and give GM, Ford Motor and Chrysler more foreign competition in the long run. Counters Pappanastos: “The cars would only sell if there is demand from American consumers.”

But in the end, GM will have no choice. Dispatching Saturn without buying off dealers would save GM a lot of money and headaches. The company wouldn’t have to buy back cars and parts and the new company would help phase Saturn out. If a deal is done, GM will supply Saturn cars through 2011. Saturn’s current retailers would own their stores, while the investor group would handle marketing, logistics and find carmakers who want to sell their vehicles in the existing stores. Saturn Distribution would even service cars owned by Saturn buyers, keeping them happy. GM could even use the channel to sell some other cars, Pappanastos says. For its part, GM said only that Black Oak’s group is just one of several bidders. But the company will decide soon what to do with Saturn and its other brand on the chopping block, Hummer. If this deal happens, Saturn will literally be what it was designed to be. It’s a retail experience. It will just sell a plethora of brands.

Reader Comments

ThePrairiePrankster

April 15, 2009 5:15 PM

This is an excellent idea. I hope they can find a way to make this work. People will buy cars again, this is an excellent solution to provide choice to consumers and preserve a viable dealer network.

tq

April 15, 2009 5:34 PM

I think this will hurt GM in the long run and that the administration should take a long, hard look at how this will help the ecconomy. Jobs lost do not help, and if imported cars are brought here not manufactured here, there will be a loss of jobs. I thought that by helping GM, the government was 'supposed' to be saving jobs?

I_Hate_China

April 15, 2009 5:35 PM

According to CNBC, there is one other bidder, and that one is an automaker, most likely a Chinese one.

They'reuppacreak

April 15, 2009 6:02 PM

Oh yes, I can seriously see American car shoppers beating a path to the door of the local Saturn dealer to buy Chinese-made cars. It'll take years for NHTSA/DOT/EPA certification for cars from China, Europe, India or anywhere else.

But on the other hand, GM has no choice.

ps

April 15, 2009 9:15 PM

Perfect example of why GM is tanking. Great concept, awesome dealer network but lacking product. The last few years saw some awesome rebadged vehicles and the Vue but it just shows you when MBA's and unions get together they can kill a great concept. Starve the product line (UAW) so you can make slab sided bores in Michigan and don't think strategic (MBAs). The perfect storm.

james

April 16, 2009 5:59 AM

i think that these thorney questions have always been there but need to be answered.

tim

April 16, 2009 12:12 PM

This is a great idea. As a former Saturn owner who fell out of favor with the brand when it moved away from its core idea and became just another GM brand. I'll go there first to look for a new car. Saves jobs, makes GM healthier in the early going and provides more consumer green choice down the road - seems like a no brainer to me.

Ted Burgos

April 16, 2009 3:45 PM

If a company like Black Oak does purchase the Saturn Corporation, does that mean that the cars will no longer be "Saturn" cars any longer? They are going to just sell any brand they can get and whatever sells? I've been a loyal Saturn owner for years and I don't want any other car other than Saturn. And Saturn has always prided themselves on being an American idea and an American car.

Paul (Vw)

April 18, 2009 7:33 PM

This is a damned shame. Really.

In a sense, Saturn was an admission -- a quarter of a century ago -- that Detroit could not adapt to new times. They had to create a new car brand out of nothing in hope to avoid the self-destructive inertia of where the (then) Big3 were headed (like 2009).

In the end though, GM never let it be it's own company. Saturn could not escape the gravitational pull of the black hole called Detroit.

It's like a few million years ago...when dinosaurs saw all these furry little mammals multiplying. Realizing their peril, they got an expensive management consultant to come in. The consultant said, "What you need is some fur implants and you too can be like the mammals." So the dinosaurs got fur implants and tried to behave just like mammals...but in the end, they went extinct. Why? You can't change DNA. The sun comes up and all a lizard wants to do is sleep in the sun.

To be honest, I'd think Fiat would be better to buy Saturn off GM. And I think Saturn would be better off too. I'd hate to see Saturn turned into another ill-fated American Motors...peddling a hodgepodge of vehicles from various origins.

But what do I know, I drive a VW and an Audi.

Squeezebox

May 7, 2009 10:28 AM

Fiat could buy Saturn to sell Opels?

knsrvitiv

June 2, 2009 6:21 PM

I used to work for a Saturn Retailer. GM screwed up big time by infighting and starving the young company R&D $'s when it was hot which postponed updated & diverse models. We lost customers whose families outgrew the original small cars and we had nothing to offer them. What a shame. During the same period, they spent several hundred million trying to save Oldsmobile. It has now cost them big time.

bags

September 11, 2009 7:18 AM

i dealed with the no hassel inflated price dealers and assure you I WILL NEVER BUY ANOTHER SATURN AGAINi dealed with the no hassel inflated price dealers and assure you I WILL NEVER BUY ANOTHER SATURN AGAIN

Ben holcomb

October 7, 2009 4:58 PM

Interesting....this is like WalMart re-branding every product it buys as WalMart.

Can you imagine the warranty, parts and repair issues with stocking or trying to stock all that is needed from 3, 4, or 5 manufacturers around the world? Is the warranty different for each manufacturer? How long is the parts delay on the Indian model or Sri Lanka Model?

This seems too difficult. Let's build American cars for Americans and make it simple. SAVINGPONTIAC.ORG

Ben holcomb

October 7, 2009 5:41 PM

Interesting....this is like WalMart re-branding every product it buys as WalMart.

Can you imagine the warranty, parts and repair issues with stocking or trying to stock all that is needed from 3, 4, or 5 manufacturers around the world? Is the warranty different for each manufacturer? How long is the parts delay on the Indian model or Sri Lanka Model?

This seems too difficult. Let's build American cars for Americans and make it simple. SAVINGPONTIAC.ORG

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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