Penske Deal Off, GM To End Saturn Brand

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Penske Automotive Group has walked away from the deal, unable to find a manufacturer to make Saturns. General Motors says it will stop making Saturns and close down the brand. Some dealers say this didn't have to happen. They say Saturn could have been a shining star in the GM lineup, had the company not starved the division of new products. Others say blaming GM won't do any good.

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Apparently, there will be no successor owner to the Saturn car brand. That's the upsetting news that General Motors released yesterday. Its plan to sell its Saturn division to the auto retail giant Penske Automotive Group fell through. Roger Penske backed out. This surprise announcement almost certainly means the end of Saturn.

Michigan Radio's Tracy Samilton reports.

TRACY SAMILTON: General Motors started Saturn in 1983 to try to win back customers who'd developed a taste for small, fuel-efficient and reliable Japanese cars. Saturn's no hassle, no haggle sales approach was popular, but late last year, a struggling GM said Saturn was one of the brands it had to let go.

This summer, former racecar driver Roger Penske said his auto retail group, Penske Automotive, would buy Saturn and contract with other car manufacturers to make Saturns once GM was out of the picture. That would have been a unique business model for the auto industry.

Dan Januska runs four Saturn stores in Arizona. He says as of Wednesday morning, everything looked good.

Mr. DAN JANUSKA (Saturn Dealer): We were all excited about it. We had airfares set up. We were going to meet Roger, and he was going to go over his plans.

SAMILTON: But things changed fast. Late Wednesday afternoon, Penske Automotive said an agreement with another auto company to make Saturn cars had been rejected by that company's board of directors. Published reports say the company was Renault. Without that deal, acquiring Saturn was just too risky. The deal was dead.

Some Saturn dealers say this didn't have to happen. In their view, Saturn could have been a shinning star in the GM lineup had the company not starved the division of new products. But other dealers say blaming GM won't do any good.

Todd Ingersoll owns two dealerships in Connecticut.

Mr. TODD INGERSOLL (Saturn Dealer): You think well, geez, if we had had a different car sooner or if that one had come out faster, if we had more money in advertising, sure. You could play Monday morning quarterback. But the simple fact of the matter is that wasn't in the cards.

SAMILTON: Also not in the cards: a new way of delivering cars to customers. Erich Merkle is president of Autoconomy.com. He seriously doubted that this kind of private label concept was realistic for an auto company, especially right now.

Mr. ERICH MERKLE (President, Autoconomy.com): There's just so many competitors out there now, so many automakers that eventually, some of those automakers have to go away and then the larger ones or the more prosperous ones then survive.

SAMILTON: A spokesman for General Motors says everyone there was surprised, shocked and disappointed by the sudden turn of events. The automaker will return to its fallback plan and stop making new Saturns in a few weeks. Saturn dealers have until the end of next year to wind down, but with inventories at low levels right now, many Saturn dealerships could close their doors within moths.

For NPR News, I'm Tracy Samilton.

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