GM to Sell Its Saturn Brand to Racing Magnate Roger Penske
Saturday, June 6, 2009
General Motors reached a tentative deal yesterday to sell its Saturn brand to auto racing magnate Roger Penske, a longtime business partner of the Detroit automaker.
GM did not disclose how much Penske Automotive Group, which operates more than 300 franchised dealerships, paid for the brand and assets, such as Saturn's parts inventory and retail network.
"Saturn has a passionate customer base and outstanding dealer network," Penske, chairman of the company, said in a statement. "For nearly 20 years Saturn has focused on treating the customer right. We share that philosophy, and we want to build on those strengths."
GM, which is operating under bankruptcy protection, is restructuring by selling off Saturn, Hummer and Saab. GM found a Chinese buyer for Hummer this week, though the sale has hit Chinese regulatory hurdles, according to China's state media.
GM said the Saturn deal will save more than 13,000 jobs, preserve the "renowned brand" and keep Saturn's 350 dealers in business. On an interim basis, GM will continue manufacturing the Saturn Aura, Vue and Outlook vehicles.
In about two years, Penske plans to seek out another manufacturer to build cars for Saturn, said Anthony R. Pordon, a Penske senior vice president. Pordon didn't rule out partnering with an overseas automaker.
"We are going to talk to everyone we can," he said.
Analysts say importing vehicles from low-wage countries such as India and China might be the best strategy to maintain Saturn's historically affordable lineup. But buying cars manufacturers and re-branding them as Saturns could be problematic.
"You need to define what Saturn means in terms of product," said Jeremy Anwyl, chief executive of Edmunds.com. "Penske needs high control over design of vehicle. That's a new thing in the car world. Manufacturers usually control the design, not distributors."
Since the 1980s, Penske and GM have designed race cars, rented trucks, sold cars and manufactured diesel engines. Together, they've won dozens of IndyCar and NASCAR races.
"He's got great relationships with GM," Anwyl said.
And he has an impeccable track record in the auto world, which helped separate Penske from the 16 other bidders, analysts said.