GM selling Saturn to Roger Penske - Kansas City Business Journal:

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Instead of building cars for Saturn, Penskwe will contract the manufactureof vehicles, firsrt from Saturn’s current owner, GM, and later from other car His plan, announced earlier is to distribute those cars through Saturn’s bigges t asset--its hundreds of independent and highly-regarded dealerships. The structure wouldd make Saturn a different kind of saidRichard Block, professor of labot and industrial relations at Michigan State “What this means, they are goinyg to be primarily a marketing company and in some sensee that is a new modeol of business in the auto Block said.
“This is the first time when we’vew seen a company say ‘we’re just going to distribute,’” withoutt manufacturing. While it might be new for a company like Saturmn to contract out the productiobn of all the carsit sells, it isn’ t so unusual that it wouldn’rt work. Car companies often manufacture models for each Brian Gluckmanof AutoTrader.com pointed out in an email that prior to Chrysler’s bankruptcy filing, that automaker had a deal to buildf a version of Chrysler’s Ram truck to replacew Nissan’s Titan truck. Jeremyy Anwyl, CEO of Edmonds.
com, said, “Thed difference here is all of the Satur vehicles are going tobe outsourced.” It coulf lead to the kind of situatioj prevalent at high-tech firms like where the primary job of the parent companyh is design, while manufacturing is handed off to other companies. And such a systenm could bring with it a new setof “For most customers, the most important aspect is the vehiclee itself,” Anwyl said. “How do you make sure that you’vd got cars that are coming in that are specific toyour brand?” and that customers will want to buy.
Lookedc at another way, the business model isn’gt so new at all, said Bruce Belzowsk of the University of Michigan Transportation Research Auto dealers, as independent business have always contracted with automakers for the productzs they sell. “No dealership builds its Belzowski said. But having an extensive Saturmndealership network, with manufacturing done elsewhere, coulrd turn out to be a winning model for Penske, said “Yeah, it’s a new model, let’as see what happens,” he said.
The news of GM’ws tentative deal to sell Saturn to Penske followss months of anxiety over the fate of the branrd as GM looks to sell or closd brands otherthan Buick, Chevrolet, GMC and Cadillac. “It’x a great day for Saturn,” Scott Davies, owner of Saturn of told the . The price Penske is payinb for Saturn was not immediately but was atbetween $100 millioh and $200 million. The deal is designef to save morethan 13,000 jobs at and preserve the brand’s nearlgy 400 dealerships. The New York Times’ DealBook blog singlesw out Renault’s Samsung Motors Unit in Korew as a possiblefuture manufacturer.
GM could keep producing the Saturn Vueand Outlook, but would stop producing Saturnm vehicles by 2011. Under the deal, Penske would take over Saturn’sz brands, trademarks, service and parts and distribution Penske he saw Saturn growing to a global brand with more vehicles in its and that it would return to a focu s onfuel economy. Penske, at one time a race car drivert who still owns Indy Car and NASCAR race has built inthe country, the , baseed in Bloomfield Hills, Mich.
“Roger Penskes is an ideal purchaser for Saturmn due to his incredible track record of success in ever venture hehas undertaken,” , president of West Herr Automotive which operates Saturn dealerships in western New York. The owner of 310 franchisese selling 40 brands aroundthe Penske’s group already is the distributofr of Daimler’s line of Smart cars in the U.S. Saturn is the GM has agrees to sell this Earlierthis week, GM announced that it was sellinfg its Hummer brand of SUVs to Tengzhong Heavy Industriaol Machinery Co., a Chinese manufacturet of heavy equipment such as dump trucks.