VH_Supra26
02-19-2009, 09:36 PM
by Ralph Hanson
http://www.motorauthority.com/content/thumbs/2/0/2009_saturn_sky_redline_main630_02-0212-630x360.jpg
Bob Lutz foretold the end of GM's association with Saturn earlier this week
The last couple of months have seen General Motors looking at dropping its poor performing Saturn brand, along with sales of Hummer and Saab. Earlier this week retiring product-development guru Bob Lutz said he doesn't think the brand will make it through the current market trough, though he likes the cars. Now a letter from Saturn to its customers says the company is exploring a spin-off from GM, to operate as its own stand-alone company.
Lutz's words, then, were prohpetic at least in regard to GM's relationship with Saturn. The 'different kind of car company' is still seeking ways to exist on its own, however, even if that means purchasing GM cars in a vendor-vendee relationship. The plan as it stands now could have Saturn buying current-gen cars from GM through 2011. The company is putting a bold face on, moving forward with sales as it works out its now very uncertain future. The brand's general manager, Jill Lajdziak, the letter's writer, put an even brighter spin on things.
"This is an exciting time at the Saturn Brand, and I have to confess, it feels a bit like it did back in the 1980s when the original Saturn project was being developed," Lajdziak wrote. "As loyal Saturn owners and enthusiasts, I know you support this brand, and you can believe we are working toward a vibrant future. Difficult times sometimes yield the most innovative solutions, and those who are willing to take on the challenge will emerge victorious. Stay tuned."
GM's stance on the Saturn issue is that the problem isn't limited to the slumping economy - it has never amounted to what GM had hoped for. "We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized. So we have to act on that. It's our duty," Lutz told Automotive News.
While GM is throwing the majority of its cash and effort at its most profitable brands - Chevrolet, Cadillac, and Buick - the company had, until submission of its latest viability plan to Congress, insisted that the Saturn brand has both a "current and future" product program. Saturn dealers, on the other hand, are anxious about the brand’s future.
The outlook isn’t good, even if the company does spin off on its own. According to Autodata vehicle statistics, Saturn’s sales figures in January dropped 59.8% on the same period a year ago and the brand’s share has dropped to below 1% - less than Buick and Pontiac. In the past 20 years, Saturn has been profitable for only one year.
On the flipside, dumping Saturn and cutting its losses would put GM out of pocket by a significant amount of cash – something it currently does not have. To dump the brand, GM would be forced, by law, to buy out the 211 Saturn dealers across the country at a cost of nearly $1 billion. That may be the better long-term option, however, says Lutz. "The fact is, we don't have the time or the resources to take 10 years to figure it out and possibly turn it around."
Saturn may not have those resources on its own, either, leaving all of those dealers, buyers and employees out in the cold.
All Content Copyright 2006-2008 Motor Authority
http://www.motorauthority.com/report-gm-may-keep-saturn-and-rebuild-it.html
http://www.motorauthority.com/content/thumbs/2/0/2009_saturn_sky_redline_main630_02-0212-630x360.jpg
Bob Lutz foretold the end of GM's association with Saturn earlier this week
The last couple of months have seen General Motors looking at dropping its poor performing Saturn brand, along with sales of Hummer and Saab. Earlier this week retiring product-development guru Bob Lutz said he doesn't think the brand will make it through the current market trough, though he likes the cars. Now a letter from Saturn to its customers says the company is exploring a spin-off from GM, to operate as its own stand-alone company.
Lutz's words, then, were prohpetic at least in regard to GM's relationship with Saturn. The 'different kind of car company' is still seeking ways to exist on its own, however, even if that means purchasing GM cars in a vendor-vendee relationship. The plan as it stands now could have Saturn buying current-gen cars from GM through 2011. The company is putting a bold face on, moving forward with sales as it works out its now very uncertain future. The brand's general manager, Jill Lajdziak, the letter's writer, put an even brighter spin on things.
"This is an exciting time at the Saturn Brand, and I have to confess, it feels a bit like it did back in the 1980s when the original Saturn project was being developed," Lajdziak wrote. "As loyal Saturn owners and enthusiasts, I know you support this brand, and you can believe we are working toward a vibrant future. Difficult times sometimes yield the most innovative solutions, and those who are willing to take on the challenge will emerge victorious. Stay tuned."
GM's stance on the Saturn issue is that the problem isn't limited to the slumping economy - it has never amounted to what GM had hoped for. "We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup, top to bottom. They had a better and fresher lineup than any GM division, and the sales just never materialized. So we have to act on that. It's our duty," Lutz told Automotive News.
While GM is throwing the majority of its cash and effort at its most profitable brands - Chevrolet, Cadillac, and Buick - the company had, until submission of its latest viability plan to Congress, insisted that the Saturn brand has both a "current and future" product program. Saturn dealers, on the other hand, are anxious about the brand’s future.
The outlook isn’t good, even if the company does spin off on its own. According to Autodata vehicle statistics, Saturn’s sales figures in January dropped 59.8% on the same period a year ago and the brand’s share has dropped to below 1% - less than Buick and Pontiac. In the past 20 years, Saturn has been profitable for only one year.
On the flipside, dumping Saturn and cutting its losses would put GM out of pocket by a significant amount of cash – something it currently does not have. To dump the brand, GM would be forced, by law, to buy out the 211 Saturn dealers across the country at a cost of nearly $1 billion. That may be the better long-term option, however, says Lutz. "The fact is, we don't have the time or the resources to take 10 years to figure it out and possibly turn it around."
Saturn may not have those resources on its own, either, leaving all of those dealers, buyers and employees out in the cold.
All Content Copyright 2006-2008 Motor Authority
http://www.motorauthority.com/report-gm-may-keep-saturn-and-rebuild-it.html