Penske calls off Saturn deal with GM
09-30-2009, 05:26 PM
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Penske calls off Saturn deal with GM
Wednesday, September 30, 2009
Penske calls off Saturn deal with GM
Robert Snell and David Shepardson / The Detroit News
Detroit auto icon Roger Penske has terminated a deal with General Motors Co. for the Saturn brand, because Penske could not find an automaker to supply new vehicles.
The deal's unraveling dooms about 340 dealers and the Saturn brand, which appeared to be saved this summer when Penske announced he had reached a memorandum of understanding with GM.
The deal was expected to be finalized as early as Wednesday, and dealers already had signed and returned new two-year sales and service agreements to Penske. Instead, GM will gradually wind down the dealerships, with details expected to be announced soon.
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"This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," GM President and CEO Fritz Henderson said in a statement. "Today's disappointing news comes at a time when we'd hoped for a successful launch of the Saturn brand into a new chapter."
GM had agreed to supply the Aura sedan and the Vue and Outlook SUVs on a contract basis for a period of time. When the memorandum of understanding was announced in June, Penske said GM would supply those vehicles for at least two years.
Penske Automotive Group said in a statement Wednesday it had negotiated a deal with another manufacturer to provide vehicles once GM stopped supplying the three models. But the agreement was rejected by the unidentified manufacturer's board of directors.
"Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction," the Penske group said in the statement.
The expected sale had been hailed by dealers who were looking for Penske to bring stability to the brand and stop an erosion of vehicle sales that has accelerated since GM said it would shed Saturn along with Hummer, Saab and Pontiac as part of a massive restructuring. This year, Saturn sales are down 59.2 percent, the second-greatest decline among GM brands behind Hummer, which is down 61.5 percent.
"Wow, I'm, like, in shock," said Stuart Lasser, who owns three Saturn stores in New Jersey and was expecting to hear Wednesday or Thursday that a deal had been completed. "We've been hanging in there literally 8 to 10 months, waiting for this to happen, and now it's not happening."
GM, which emerged from bankruptcy court July 10 after shedding brands, billions in debt and thousands of employees, is focusing on Chevrolet, Cadillac, Buick and GMC.
Penske's deal with GM included the Saturn brand, the parts operation based in Spring Hill, Tenn., and a network of about 340 dealerships, and was expected to preserve 13,000 jobs.
The Penske Automotive Group Inc., which operates 310 franchises in the United States and internationally, sells 40 brands. Penske also distributes the Smart car, made by Daimler AG.
The Smart car and Saturn vehicles would have been sold in separate dealerships, Penske said.
Penske calls off Saturn deal with GM
Robert Snell and David Shepardson / The Detroit News
Detroit auto icon Roger Penske has terminated a deal with General Motors Co. for the Saturn brand, because Penske could not find an automaker to supply new vehicles.
The deal's unraveling dooms about 340 dealers and the Saturn brand, which appeared to be saved this summer when Penske announced he had reached a memorandum of understanding with GM.
The deal was expected to be finalized as early as Wednesday, and dealers already had signed and returned new two-year sales and service agreements to Penske. Instead, GM will gradually wind down the dealerships, with details expected to be announced soon.
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"This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," GM President and CEO Fritz Henderson said in a statement. "Today's disappointing news comes at a time when we'd hoped for a successful launch of the Saturn brand into a new chapter."
GM had agreed to supply the Aura sedan and the Vue and Outlook SUVs on a contract basis for a period of time. When the memorandum of understanding was announced in June, Penske said GM would supply those vehicles for at least two years.
Penske Automotive Group said in a statement Wednesday it had negotiated a deal with another manufacturer to provide vehicles once GM stopped supplying the three models. But the agreement was rejected by the unidentified manufacturer's board of directors.
"Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction," the Penske group said in the statement.
The expected sale had been hailed by dealers who were looking for Penske to bring stability to the brand and stop an erosion of vehicle sales that has accelerated since GM said it would shed Saturn along with Hummer, Saab and Pontiac as part of a massive restructuring. This year, Saturn sales are down 59.2 percent, the second-greatest decline among GM brands behind Hummer, which is down 61.5 percent.
"Wow, I'm, like, in shock," said Stuart Lasser, who owns three Saturn stores in New Jersey and was expecting to hear Wednesday or Thursday that a deal had been completed. "We've been hanging in there literally 8 to 10 months, waiting for this to happen, and now it's not happening."
GM, which emerged from bankruptcy court July 10 after shedding brands, billions in debt and thousands of employees, is focusing on Chevrolet, Cadillac, Buick and GMC.
Penske's deal with GM included the Saturn brand, the parts operation based in Spring Hill, Tenn., and a network of about 340 dealerships, and was expected to preserve 13,000 jobs.
The Penske Automotive Group Inc., which operates 310 franchises in the United States and internationally, sells 40 brands. Penske also distributes the Smart car, made by Daimler AG.
The Smart car and Saturn vehicles would have been sold in separate dealerships, Penske said.
10-01-2009, 10:16 AM
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The Wall Street Journal said on Wednesday that the Board of Directors at Renault turned down the Penske proposal that would give Renault the contract to manufacturer the new Penske Saturn. Knowing Penske the deal may not be done quite yet.
10-01-2009, 04:53 PM
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yes but Penske is out. Others were interested and still may be. GM is better to close it and eliminate competition agianst itself. Closing it will be expensive for GM. There are just to many car companies for them all to survive in this world now.
10-02-2009, 06:44 AM
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Friday, October 2, 2009
GM, dealers begin the end to Saturn
Robert Snell / The Detroit News
A day after a Saturn deal with Roger Penske fell through, General Motors Co. proceeded with plans to shutter 350 dealerships and there was little indication a deal could be salvaged or another suitor found.
Eliminating Saturn means one fewer competitor for GM, though it will cost the Detroit automaker money to close the dealerships in the short term.
Dealers, who had a conference call with GM executives Thursday and heard how the process of closing dealerships will unfold, started strategizing the future of their retail stores as used car lots, or selling rival brands or simply listing the land and buildings.
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There are 12,000 Saturn vehicles on dealer lots -- about a four-month supply -- and dealers say they cannot survive long enough for another deal to be reached.
"It's already been dragged on for too long," New Jersey dealer Stuart Lasser said. "It's done. It's over."
Dealers have until the end of October 2010 to close, but many will be gone by January because inventory is low, dealers said.
The automaker will begin winding down Saturn dealers, who are being offered between $100,000 and $1 million to stay open and gradually sell inventory.
Saturn dealers this year signed wind-down agreements that provide for the orderly closing of their stores instead of seeing their dealerships left in bankruptcy court.
GM late last month sent Saturn dealers a letter extending the retailer agreement until Nov. 30 -- a precautionary move in case the Penske deal didn't close by Wednesday. The letter left some wondering if the extension left some room to salvage a deal.
But GM spokesman John McDonald reiterated plans to shut down Saturn.
"The deal is dead," he said.
The developments came less than 24 hours after Penske said he was terminating a deal to buy Saturn after his prospective provider of new vehicles -- the Renault-Nissan Alliance -- pulled out.
GM, dealers begin the end to Saturn
Robert Snell / The Detroit News
A day after a Saturn deal with Roger Penske fell through, General Motors Co. proceeded with plans to shutter 350 dealerships and there was little indication a deal could be salvaged or another suitor found.
Eliminating Saturn means one fewer competitor for GM, though it will cost the Detroit automaker money to close the dealerships in the short term.
Dealers, who had a conference call with GM executives Thursday and heard how the process of closing dealerships will unfold, started strategizing the future of their retail stores as used car lots, or selling rival brands or simply listing the land and buildings.
Advertisement
There are 12,000 Saturn vehicles on dealer lots -- about a four-month supply -- and dealers say they cannot survive long enough for another deal to be reached.
"It's already been dragged on for too long," New Jersey dealer Stuart Lasser said. "It's done. It's over."
Dealers have until the end of October 2010 to close, but many will be gone by January because inventory is low, dealers said.
The automaker will begin winding down Saturn dealers, who are being offered between $100,000 and $1 million to stay open and gradually sell inventory.
Saturn dealers this year signed wind-down agreements that provide for the orderly closing of their stores instead of seeing their dealerships left in bankruptcy court.
GM late last month sent Saturn dealers a letter extending the retailer agreement until Nov. 30 -- a precautionary move in case the Penske deal didn't close by Wednesday. The letter left some wondering if the extension left some room to salvage a deal.
But GM spokesman John McDonald reiterated plans to shut down Saturn.
"The deal is dead," he said.
The developments came less than 24 hours after Penske said he was terminating a deal to buy Saturn after his prospective provider of new vehicles -- the Renault-Nissan Alliance -- pulled out.
10-02-2009, 07:30 AM
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Also read someplace that Penskes talks with Renault to build the Saturn ended as well.
Last year I though read that Renault was not interested in the USA market as they could not or would not build cars to the US safety and emission standards.
Last year I though read that Renault was not interested in the USA market as they could not or would not build cars to the US safety and emission standards.
