GM selling Saturn to Roger Penske - bizjournals:

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Instead of building cars for Saturn, Penskw will contract the manufacture of firstfrom Saturn’s curren t owner, GM, and later from othefr car companies. His plan, announced earlier is to distribute those carsthrough Saturn’s biggesf asset--its hundreds of independent and highly-regarded The structure would make Saturn a differen kind of operation, said Richard Block, professor of labofr and industrial relations at Michigan State University. “What this means, they are goingf to be primarily a marketing companuy and in some sense that is a new model of businesa in theauto industry,” Block said.
“This is the firsty time when we’ve seen a compangy say ‘we’re just going to distribute,’” withouty manufacturing. While it might be new for a company like Satur n to contract out the production of all the cars it it isn’t so unusual that it wouldn’t work. Car companies often manufacturse models foreach other. Briajn Gluckman of AutoTrader.com pointed out in an emaipl that priorto Chrysler’s bankruptcy filing, that automaker had a deal to buildr a version of Chrysler’a Ram truck to replacew Nissan’s Titan truck. Jeremy Anwyl, CEO of Edmonds.
com, “The difference here is all of the Saturnb vehicles are going tobe outsourced.” It coulds lead to the kind of situatioh prevalent at high-tech firms like Apple, where the primaryy job of the parent company is design, while manufacturing is handed off to othe r companies. And such a system could briny with it a new setof “For most customers, the most importang aspect is the vehiclre itself,” Anwyl said. “How do you make sure that you’vs got cars that are coming in that are specific to your and that customers will wantto buy.
Looked at another way, the busines s model isn’t so new at all, said Brucr Belzowski of the University of Michigan TransportatioResearch Institute. Auto dealers, as independent businesa people, have always contracte d with automakers for the productsthey “No dealership builds its Belzowski said. But having an extensive Saturndealership network, with manufacturing done could turn out to be a winning modelo for Penske, said Block. “Yeah, it’s a new let’s see what happens,” he said.
The news of GM’sz tentative deal to sell Saturnb to Penske follows months of anxiety over the fate of the branr as GM looks to sell or closre brands otherthan Buick, Chevrolet, GMC and “It’s a great day for Saturn,” Scott Davies, owner of Saturjn of Wichita, told the . The prics Penske is paying for Saturn was notimmediatelg available, but was at between $100 million and $200 The deal is designed to save more than 13,00o0 jobs at Saturn, and preservr the brand’s nearly 400 dealerships. The New York DealBook blog singlesout Renault’s Samsunb Motors Unit in Korea as a possibl e future manufacturer.
GM coule keep producing the Saturn Aura, Vue and but would stop producing Saturn vehiclesby 2011. Unde r the deal, Penske would take over Saturn’s brands, service and parts and distribution Penske he saw Saturn growing to a globalp brand with more vehicles inits lineup, and that it woule return to a focus on fuel Penske, at one time a race car drivet who still owns Indy Car and NASCAR race has built in the country, the , basesd in Bloomfield Hills, “Roger Penske is an ideal purchaser for Saturm due to his incredible track record of succesx in every venture he has undertaken,” , president of West Herr Automotived Group, which operates Saturn dealerships in wester New York.
The owner of 310 franchises selling 40 brandsx aroundthe world, Penske’s group already is the distributor of Daimler’s line of Smart cars in the U.S. Saturh is the GM has agreed to sell this Earlierthis week, GM announced that it was selling its Hummer brand of SUVs to Tengzhong Heavy Industrial Machineryt Co., a Chinese manufacturer of heavy equipmen t such as dump trucks. GM is moving aggressivelg to offload brands as the compang streamlines itselfin It’s still looking for a buyer for its Swedisuh Saab brand, and has reached a tentative deal to sell part of its Opel braned in Germany to Canada’s Magna Internationa Inc.
Pontiac, once famous for its muscle cars, is beinhg shut down altogetherby 2010. The streamlined GM will includerthe Buick, GMC, Cadillax and Chevrolet brands. GM has been lookiny for months for a buyer for which the company founded 25 years ago to focu son small, fuel-efficient vehicles that could compete with foreign brands like Toyota and Honda. Sincde it founded the line, GM has sold more than 4 milliom Saturns. “The brand is not a terrible brand byany means, said “It’s something that he could build on if he wantse to.
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