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Penske Hopes to Drive Saturn Off GM's Lot

Aura, Vue, Outlook all expected to remain in the line-up

By Mark Huffman
ConsumerAffairs.com

June 5, 2009

Saturn • Aura • Vue --- • Engine problems • Transmission problems • Airbags • Ignition interlock • Oozing goo • Miscellaneous woes • The Shamrock Saturn --- Recalls/News • Penske Scraps Plan to Buy Saturn; Brand Likely to Die • Penske Hopes to Drive Saturn Off GM's Lot • Saturn Climbing the Roadway to Heaven • Saturn Aura Gets a 5,000-Mile Road Test • NHTSA Probes Timing Chain Again • NHTSA Recalls Saturn L Series • NHTSA Probes Saturn Timing Chain Failures • Saturn Astra Named Safest Car Under $25,000 • Saturn Outlook Gets Top Marks from Consumer Reports • Saturn Targets Toyota, Honda for Side-by-Side Tests • Saturn Sky Prices Go Sky High • Saturn VUE Recalled • L-Series Cars Recalled

Saturn will live on despite being flung out of General Motors' solar system. The Penske Automotive Group has tentatively agreed to purchase Saturn Corp. by the end of the third quarter, the companies announced. The deal is a welcome reprieve for 350 Saturn dealers and about 13,000 employees. It's also good news for Saturn owners who had faced the prospect that their cars would be orphaned by GM's bankruptcy reorganization.

"We will have a completely independent company, and it will be lean," Penske Automotive CEO Roger Penske said in a conference call Friday morning.

Earlier this week, a Chinese heavy-equipment manufacturer tentatively agreed to buy the Hummer brand.

Under the deal, Penske will assume all Saturn operations. The company will contract with different automakers, including GM, to build the Saturn, as well as other models, allowing Penske to supplement current Saturn offerings. GM announced it was jettisoning its Saturn, Hummer, Saab and Pontiac brands back in April, as it tightened its belt in a doomed effort to stave off bankruptcy. It had already targeted Saturn for extinction by the end of 2011.

The Penske Group is the nation's second-largest auto dealership group, with 158 dealerships in 19 states and 152 outside the U.S. Penske said he planned to keep the Aura sedan, the Vue SUV and the Outlook crossover in the Saturn lineup for at least two years, Automotive News reported. Penske Automotive is also the exclusive U.S. distributor of the smart fortwo, sold through 75 smart retail centers in the United States.

“We have agreed upon a framework that we believe will build momentum for the Saturn brand,” Penske said. “Saturn has a passionate customer base and outstanding dealer network. For nearly 20 years Saturn has focused on treating the customer right. We share that philosophy, and we want to build on those strengths.”

All Penske has to do now is find someone to build Saturns. Analysts expect Penske to contract with international manufacturers to build the cars after its initial contract with GM runs out.

The Saturn dealer network and reputation are highly regarded in the auto industry. Saturn began selling cars in 1990 and has sold more than 4 million vehicles. More than 80 percent of those vehicles are still in operation, according to data from R.L. Polk. Saturn has regularly scored among the industry leaders for non-luxury brands in customer satisfaction surveys.

“This is the combination of two iconic teams: Saturn and Penske. GM had the vision to create Saturn and has the desire to see it succeed in the future,” said Saturn general manager Jill Lajdziak.

Penske said he hoped to keep Lajdziak in a management role at the new Saturn. He said he also hopes to find a spot for former Chrysler President Tom LaSorda, who has worked with Penske as a consultant on his bid to buy Saturn.

Dealer closings protested

The closing of car dealerships, by both GM and Chrysler, has produced a grass roots firestorm in Congress, where many lawmakers have objected to the widespread job losses in their districts. Executives of both GM and Chrysler were hauled before a Congressional committee earlier this week, where they defended the closings as painful, but economically necessary.

Automotive consumer activist Duane Overholt is also highly critical of the dealer-closing criteria used by GM and Chrsyler. Overholt, who in the past has sued a number of car dealers for fraud, says the list of closed dealerships is heavily weighted with what he termed “honest” dealers.

“The factory is using this bankruptcy to help their big publicly held auto dealers at the expense of the public,” Overholt charges. “They’re getting rid of the best role models for the business.”

Overholt called on Congress to delve deeper into the dealership closings and the criteria used to target them.

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