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MAKE SATURN THE STANDARD-BEARER
In the late 1980s, critics said General Motors Corp.'s small-car spin-off, Saturn Corp., was taking too long and costing too much money. They observed pointedly that, rather than needing a new car company, GM desperately needed to remake the company it already had.
Today, critics of the import-fighting Saturn division are harder to find. Sales are so brisk that Saturn's Spring Hill (Tenn.) factory can't keep pace. The cars' high quality, along with excellent service and revolutionary, low-pressure sales tactics, has made Saturn buyers among the happiest in autodom, according to independent research.
Already, Saturn has had an impact on the way automobiles are sold in the U.S. Saturn dealers are adopting the same simple, one-price, no-haggle approach at their other franchises. And they're treating all of their customers with the kind of respect and pampering once reserved strictly for luxury car buyers. Meanwhile, rival carmakers are frantically trying to train all of their dealers to do the same thing.
Now, to make sure Saturn's $5 billion investment really pays off, GM's brass are confronted by a dilemma (page 34). GM must give Saturn enough capital to keep its momentum rolling, even though the division still loses money. The upstart will soon need a new assembly plant to meet soaring demand and new models to keep customers in Saturns as they age and need bigger cars. That's tough, because cash is tight and other GM divisions are desperate for money and new models, too.
More important, GM managers must sweep aside GM's paralyzing, bureaucratic roadblocks and adopt the innovations that make Saturn a success. All GM divisions should whip their dealers into shape before nimble competitors pass them by. GM and the United Auto Workers should move more quickly toward the kind of partnership that has produced such stunning quality in Spring Hill. And GM's engineers need to work more closely with suppliers, as Saturn's did, to design the kind of cars consumers want to buy. In other words, GM should accelerate the "Saturnization" of its whole enterprise.