As The Princess Bride’s Miracle Max would say, Saturn is “mostly dead”. Yesterday GM said Saturn will simply be retired, because after the deal between Penske and GM fell apart, it would take a miracle for anything else to happen.
When the Penske/GM deal for Saturn was announced many months ago, I was a tad surprised. Roger Penske has always had something of a Midas touch turning businesses into cash cows. The buyout of Saturn, however, seemed to be more of a pig than a bounty-producing bovine.
The main problem with the deal was that GM would only continue to build three models—the Aura, Vue and Outlook for Penske through 2011. At that point, Penske would need to find some other corporation to build the cars, which he thought he had (insiders claim it was Renault-Nissan). Unfortunately, that all fell through.
Or maybe it is actually fortunate. The value of a brand producing badge-engineered product lines is precisely the issue I brought up back when Saturn was put on the block. In the old days when a corporation bought out another automaker, it got the brand, one or two production facilities, the trademarks, the equipment, and workers. Now it simply isn’t that easy. Since Saturn produces not one single vehicle unique to its brand, Penske didn’t have the opportunity to buy anything that resembled a true going concern.
It’s obvious that Penske was placing the value on Saturn’s distribution network with which he had longer-range plans. Saturn’s current lineup of vehicles was no doubt a stop-gap until other foreign car lines from China, India and other countries could be imported and sold/serviced via Saturn dealers. Since importing cars is a tricky business, relying heavily on emissions and safety regulatory bodies, Penske needed some breathing room if certain brands needed more time to meet American standards.
I said it before and I’ll say it again – GM killed Saturn a long time ago by stripping its primary value proposition: autonomy. When the brand was introduced nearly twenty years ago, all of the company’s products were unique. If 1990’s Saturn were to have been shopped, it would have found a buyer.
Over the last two decades GM let Saturn lose its value. Initially it was by not replacing the original car models, and then they replaced it with badge-engineered crap. While some would argue that the current lineup of Aura, Outlook, Vue, and Sky are pretty good, there’s no escaping that all the vehicles were available with slightly altered sheet metal (actually, usually it was simply plastic) carrying other brand badges. Penske might as well have been buying the Chevy Malibu as the Saturn Aura!
Sure, there are other reasons people buy dying – or dead and buried, for that matter, automakers. It was popular in the 1980s for entrepreneurs to buy existing parts supplies of automakers leaving the US market…or the entire world, such as was case for companies like Maserati, Checker and DeLorean. Since the parts of Saturn are largely shared with other GM products, it makes this tactic a moot point.
And what about simply buying the Saturn name and brand logo for trademark value sake? C’mon – you’d be hard-pressed to find an automaker with a more ambivalent customer base less likely to buy logo apparel. I suppose Saturn is the modern brand image value equivalent of Essex or Frazer.
So Saturn will soon hit the junk bin. At the very least let’s hope that GM has figured out a better way to close-down a brand more efficiently than when it killed Oldsmobile at a cost of a BILLION dollars.
Tell you what – I’ll make GM stockholders a deal. I’ll buy Saturn…at the invoice price of a new Sky, which is the only Saturn product that (with enough development and bug fixing over a couple generations) I ever thought had any chance of being a really great car.
Come to think of it… GM is going to have to throw in an extended warranty.