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Saturn May be Reborn Offering a New Twist on an Old Theme

April 15th, 2009 | Posted in: Brand, Financial

As many are aware, the Saturn brand is on the list of items that GM must shed to become viable. GM has only agreed to support a product line though 2011 and encourages the possibility of spinning off the brand to investors.

Reports have surfaced including an acknowledgment from GM that a group of investors led by Black Oak Partners LLC and some Saturn dealers has submitted a proposal. This proposal is in addition to several others.

The proposal is to spin off Saturn as, you guessed it, a different kind of car company. Where did I hear that before?

A new company would be formed called the “Saturn Distribution Co.” It would utilize the high customer satisfaction ratings that Saturn’s 450 national dealerships enjoy as a network to sell vehicles.

The cars that would be sold however would be sourced from several different carmakers including large international brands. The cars would be built to order as new the Saturn would retain its own design center and create vehicles based on what customers want.

So now instead of the manufacturer telling the dealer what to sell, the dealers would tell multiple manufactures what cars it whats to sell. Sort of a Best Buy of cars. EREVs anyone?

Meanwhile there are new reports that even the GMC brand may have to be shed along with Saturn and Pontiac in an effort to make GM viable, based on discussions with the Obama administration. This would then lead to a three-brand new GM; Chevrolet, Cadillac, and Buick, each presumably with a Voltec car.

Source (AP)

Posted by: Lyle

79 Responses to “Saturn May be Reborn Offering a New Twist on an Old Theme”

Sean Says:
April 15th, 2009 at 8:49 pm

No more GMC, what about all the medium and heavy trucks?

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Young Says:
April 15th, 2009 at 8:56 pm

They should buy EV1 from GM.

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hayley Says:
April 15th, 2009 at 8:59 pm

Hey, not bad, this is like when Dell started making computers built to order… I’d love to have that luxury with cars in the future, instead of having to settle for what’s available on the lot, or waiting indefinitely for the right color and options to maybe show up.

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eGMC Says:
April 15th, 2009 at 9:04 pm

Saturn – Chilly machine! Beautiful Headlights!

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jeffhre Says:
April 15th, 2009 at 9:09 pm

That’s great, maybe Chrysler can sell it’s dealers to some other group and and the Saturn group can order cars from Chrysler. Sort of a perpetual sales motion, hedgefund/foreignowner/invesmentgroup action, ponzi scheme.

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Malamute Wolf Says:
April 15th, 2009 at 9:13 pm

Wow thats really awesome to hear! It’s been sad seeing the decline of Saturn and them getting discontinued. I wish they had kept the smaller cars. Maybe now they will bring some really awesome small cars to the marked, maybe even a small sub-compact BEV or EREV or Hybrid that gets 80 to 100 mpg.

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unni Says:
April 15th, 2009 at 9:18 pm

Off the news :
http://www.autoblog.com/2009/04/15/report-bill-gates-files-patent-for-electromagnetic-generator-p/

Bill Gates files patent for electromagnetic generator, plasma injector. He may be interested in an EREV company ( Just for GM’s CEO hope )

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CaptJackSparrow Says:
April 15th, 2009 at 9:21 pm

So does that mean I can order my car as bare bones the way I want it. That would be awesome ordering either a EREV or BEV.

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Steven Says:
April 15th, 2009 at 9:22 pm

The Saturn model of “no haggle” price was always a bad idea. People like to get a deal on cars, not feel like they are paying MSRP. Its a good thing if GM could shed the brand.

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CaptJackSparrow Says:
April 15th, 2009 at 9:24 pm

fyi, I have a Saturn 97 SL2 and I abuse the friggin sh|t out of it but it still runs like a mofo!

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statik Says:
April 15th, 2009 at 9:25 pm

What is interesting here is that the dealers are in collaboration with Black Oak Partners, who are also said to be representing some ‘foreign interests’ and part of their proposed deal is said to include Saturn selling ‘other’ vehicles, but also specifically mentions ‘electric’ vehicles.

We could be looking at a non-domestic player looking at this as easy/cheap way to shoe-horn their way into NA, with a existing dealer base.

Further supporting this arguement is Black Oak Partners spokesman John Pappanastos, a spokesman who said “GM needs to act quickly to complete a deal before more Saturn dealers choose to shut down.”

For this reason, this offer is probably the ‘best’ they have monetarily, but it may be of the greatest danger to them (and the other domestic automakers) down the road. Not sure they want to give BYD, SAIC, Chery or whoever a wide open door to the market for a billion dollars (or whatever) when they are going to end up getting 100 times that from the government before they are done.

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an_outsider Says:
April 15th, 2009 at 9:26 pm

Bring back the polymer body panels as BTO option

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George K Says:
April 15th, 2009 at 9:28 pm

I don’t really understand the GM/dealership relationship. How do they control their dealers? Can they control the dealers? Who controls dealer customer satisfaction?

High dealer satisfaction ratings are one of the most important parts of the sales cycle from the customer perspective.

I have had any number of things go wrong with my Toyota cars. But my dealer is so good to me, that I give Toyota (not the dealer) a high rating.

To me, the dealer is Toyota. If GM doesn’t control the dealers, then that part of the sales cycle is up for grabs.

=D~~~~

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Dave K. Says:
April 15th, 2009 at 9:29 pm

I agree haley 3,

A menu system is worth consideration. This will provide a very basic inexpensive model for those who like to self customize. It will also provide the “sport / leather / GT” factor for those who have the extra pocket cabbage to splurge.

Tesla’s model for building a standard platform and having an infinite number of shell possibilities will surely be a hot item as well. They just need to work away from the 6000 cell battery power system. Will A123 come calling?

Just a thought: I can see a 3″ tubular frame being a good place to house a battery system.

=D~

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Stan Says:
April 15th, 2009 at 9:32 pm

That’s a great idea if they can get great cars! While they are at it they should change the name Saturn – sooo 70’s/80’s cheesy vision of the future.

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solo Says:
April 15th, 2009 at 9:52 pm

The plastic body panels were a hit with Saturn loyalists but for whatever reason they could not be made popular enough to be ‘mainstream’. Everybody and their brother in the automotive press said the plastic panels had too much of a gap between the panels to allow for expansion and it made the cars look poorly put together. I have to disagree, I had 2 Saturn “L” series cars and neither I nor any of my car guy buddies noticed or cared. The panels never dented and were better than average at surviving 6 year old’s swinging moms minivan door into its sides without getting scratched.

I put 205,000 miles on the second one. After the warranty expired at 100,000 miles I switched to Amsoil engine oil and changed the oil every 35,000 miles (YES, I said thirty five THOUSAND miles).

I sold the car for 800 bucks to the neighbor 2 years ago and he is still driving it. The motor was so quiet it was hard to tell it was running even when standing next to it.

The car wasn’t 100% problem free but it kept me in the saddle with my girlfriend who lived 250 miles away for several years.

I am definitely loyal to the brand. If I needed a car today, I would give them serious consideration, esp. for the dealer service.

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kdawg Says:
April 15th, 2009 at 10:14 pm

#3 hayley,
I’ve always ordered my cars to what I wanted.

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kdawg Says:
April 15th, 2009 at 10:21 pm

#13 George,

The dealers get rated by GM via surveys buyers fill out after making their purchase. The dealers are very concerned about the ratings they get. I dont know the details of what happens for certain amounts of bad ratings.. but I would guess eventually GM would just shut them down.

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George K Says:
April 15th, 2009 at 11:02 pm

#18 kdawg
“but I would guess eventually GM would just shut them down.”

Didn’t know GM could do that. Then, If Saturn dealers are doing such a good job, lets use their work model for the other dealers!!?

=D~~~~

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nasaman Says:
April 15th, 2009 at 11:03 pm

I’ve been a Saturn owner since 1994, and have purchased/serviced my Saturns at 3 different dealerships. Both the purchase and the servicing experiences have been far superior to those with any other brand’s dealers I’ve experienced. Regarding foreign-designed vehicles, I’m currently driving a 2008 Saturn Vue, an Opel-designed clone of a BMW X-5 with fit, finish & handling equivalent to the X-5 at less than half its cost!

Saturn dealers already have a successful business model for distributing superb cars designed & manufactured outside the US, and if this “Black Oak” proposal or something very similar to it is successful, I’ll likely remain a Saturn owner for the forseeable future.

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Adam Says:
April 15th, 2009 at 11:18 pm

#1, remember, whatever GMC builds, Chevy does the same thing.

#2, That idea is kick butt!! But it’ll never happen.
Welcome to the new era of GM, or Government Motors…

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kdawg Says:
April 15th, 2009 at 11:24 pm

19 George,
i over simplified it.. there are contracts etc. It may require GM to buy them out. I guess my point was, GM get’s feedback on dealership performance, and its in the best interest of the dealership to make sure that it’s good feedback.

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Jim I Says:
April 16th, 2009 at 12:21 am

I am a bit confused by the article.

At first, it mentioned build to order vehicles, which would make them an OEM, putting the Saturn name on cars produced by others. But then it talked about the new Saturn just being a distribution company, which sells cars from other manufacturers, like Best Buy. There was nothing to indicate that Saturn would actually be a manufacturer, just possibly a design firm.

So which is it?

Somehow I can’t imagine BYD, Fisker, or Tesla wanting to make cars with a Saturn badge on them. Maybe Tata, I suppose. Do you think GM or Ford would want to build cars for the competition?

What am I missing here?

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DonC Says:
April 16th, 2009 at 12:43 am

At the risk of being a broken record, splitting manufacturing from design and development is worth a look. It worked in chips and it might work for cars. The original idea was to make the entire process vertically integrated. If you wanted to make steel you bought iron mines for the raw material and then a shipping line to transport it.

With the end of the 20th century those days are gone. It just works better if each company specializes in what it does best. The Detroit car companies have terrific manufacturing expertise, but their designs are predictable, and when one comes up with a hit — be it mini vans or the mustang — the others all pile into the space, resulting in a lot of “me too” product and too little real innovation.

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CorvetteGuy Says:
April 16th, 2009 at 12:51 am

I had a Saturn Coupe about 10 years ago. It was okay for my work/commuter car. Great dealer service. Great warranty. Poor quality car. Had lots of recalls and warranty service work needed. But with all the work they did on it, I managed 96,000 miles out of it before it died.

I hope Saturn 2 does better.

And we all know Saturn 3 was a crappy movie!

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Rashiid Amul Says:
April 16th, 2009 at 4:19 am

A made to order car would be great, but I highly doubt it would be cost effective. Take me for example I want an EREV. If I can’t have that, I want a 6 speed manual shift. Docking station for my I-pod. Ejector seat for the passenger side, convertible 4 door. I want to car to do most controls via voice activation.

The point I am trying to make is this. We all want so many different things. It can’t be as simple as building a PC from Dell. When I build my own PC, I start with the right motherboard and case and work my way up from there.
We can’t exactly do that with a car. There will be too many restrictions.

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Thomas Gilling Says:
April 16th, 2009 at 5:20 am

Rashiid Amul is saying the correct thing. Computer Manufactures won’t let you build it from scratch. What some computer manufactures like Dell do is that they get cheap Japanese component’s and slam it together and call it a computer and put a high price tag on it. A custom built car might come with what you want but could the Car Company’s make money from it? The executives of GM have a nice pampering every month, they cannot trade that in for pleasing customers!

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BillR Says:
April 16th, 2009 at 6:03 am

This business model reminds me of Sears.

When you buy a Kenmore product, it is typically made by some other manufacturer and given the Kenmore name. Their clothes washers might be made by Whirlpool, refrigerators by Amana, and dishwashers by GE, but they all are labeled Kenmore.

So Saturn will contract with Auto manufacturers to have a complete product line with the “Saturn” label. But your small car may be built by Kia, a midsize by Ford, and the crossover by GM. The electric car could come from BFD.

Just like Sears, Saturn will go for bids to the manufacturers to get the best bang for the buck in each market segment.

This may not be the business model they have planned, but it’s what I can see happening.

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Jim I Says:
April 16th, 2009 at 6:36 am

Rashiid #26: I agree with what you are saying. Another reason it is hard to compare ordering a car from ordering a computer is that some options require other options to be installed, that you may not want. For example. If you want the right side ejector seat, you have to upgrade to the electronic automatic convertible top XLT option. And then Capt Jack gets mad, because he is being forced to buy stuff he doesn’t want. But if you do not get it, every time you use the ejector seat, the top is ruined, and then people are mad that GM builds junky cars.

And You forgot to add this seemingly popular mantra:

“I want it all for $19.9K, no matter what options I get, because that is the price point for the masses, and it will beat T & H.”

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Jim I Says:
April 16th, 2009 at 6:44 am

BillR #28: Who is going to service that car, with all those non-common parts that no one would want to keep in inventory. That is kind of the problem with Kenmore. When they come to the house, they take a look and tell you they have to order the part, and it may take a week or so before they can actually come and get it fixed. This is especially true if the model is five or six years old. They want you to go and buy a new one.

Plus the techs are not all that familiar with all the different models. Which makes you wonder about the quality of the repair.

That is not the kind of service I want for a car that I need every day.

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Bill Marsh Says:
April 16th, 2009 at 6:53 am

Interesting that each of the ‘brands’ would have its own E-Rev. Did GM consider simply having a e-Rev/Electric brand on its own? IT seems to me this might be a better approach (and, if all electric becomes practical the line could end up being the only brand at GM).

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k-dawg Says:
April 16th, 2009 at 7:02 am

Are you talking about cosmetic details or function details, regarding customization?

Think of the Scion.
GM also tried this approach with certain Pontiacs.
I think Kia is in it now with the Soul.

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nasaman Says:
April 16th, 2009 at 7:14 am

I wonder if many Americans who think of Saturn as marketing American-made cars, realize that 3/5ths of the lineup is already designed & manufactured outside the US…..

The 2009 Saturn lineup is…..

Astra (compact hatchback sedan)
Aura (mid-size notchback sedan)
Outlook (7-pass SUV)
Sky (2-dr roadster)
Vue (CUV/Crossover) — (in 2008 the Vue outsold all of the above, combined)

Of these, only the Outlook & Sky were designed & made in the US. In fact, the Opel-designed & manufactured Astra, Aura & Vue are their most popular models. So Saturn dealers already have plenty of experience marketing & servicing vehicles imported & rebadged from outside North America, and it doesn’t appear to have caused any significant parts availability or model acceptance problems.

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Schmeltz Says:
April 16th, 2009 at 7:16 am

Hmmmm….

So they’re contemplating the removal of GMC and Pontiac now to trim down to 3 brands. I speculated a few weeks ago, that they (GM and PTAF) could be “making room” for Jeep, if it comes to that.

Lets think about it for a moment. Buick is a 3 vehicle division currently. Now they make good quality cars, and the profit margin on them is healthy. Plus, generally Buick customers tend to be loyal. But Buick alone is not enough to be sold at a dealership without the accompaniment of another brand. This is probably why GM chose to keep the GMC truck brand next to Buick to compliment the offerings. Makes pretty good sense. Now however, if there is serious consideration of dropping GMC, thus leaving Buick alone as a brand, this could be positioning to roll the Jeep line into the GM fold if Chrysler would liquidate. Just a guess on my part as to what they could be talking about.

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Dave B Says:
April 16th, 2009 at 7:18 am

And wouldn’t it be ironic if Saturn came back to crush GM?

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Rashiid Amul Says:
April 16th, 2009 at 7:47 am

Dave B #135,

Yup. That would be history repeating itself.

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Jeff Says:
April 16th, 2009 at 7:58 am

#11 Statik

I agree…but I’ve wondered why CarMax has not partnered with “BYD, SAIC, Chery or whoever “. CarMax sells new vehicles from a few of the automakers…just not one you mentioned. I would think that CarMax is a similar business model to the one suggested for Saturn.

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zipdrive Says:
April 16th, 2009 at 8:12 am

Bill R @ 28
—————-
That’s the same thing I was thinking as I was reading the article – Sears. Kenmore, Craftsman – Sears just goes out and contracts manufacturers to build stuff to their specs and Sears puts their name on it.

Often it is the BEST stuff too. Kenmore appliances are an example. I buy nothing but Kenmore.

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Schmeltz Says:
April 16th, 2009 at 8:15 am

I’m finding it hard to wrap my head around what Black Oak is proposing with Saturn. In general, if you have to struggle to explain your business model, it probably isn’t a very good one. Currently there are too many brands and models of cars out there for consumers to assimilate. How in the world is Saturn going to explain something like this to customers, “Well, this Saturn here was made by GM previously, but is now made in China by BYD, and this Saturn over here is still being made by GM until 2011, and then will be replaced with a similar looking car sourced from Suzuki and made in Canada…” Makes my head spin!

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Starcast Says:
April 16th, 2009 at 8:35 am

I don’t think they are talking about allowing the customer to pick a “made to order” car.
They are just talking about Saturn going to different companies to build the cars. Much like many parts are done now.

A down side of this is a car may look the same from year to year but be built by a different company and not have the same quality.

This would make Saturn the Walmart of car companies. For good or bad. Your choice

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Cautious Fan Says:
April 16th, 2009 at 8:48 am

intrade betting market has had a GM CH11 bankruptcy liklehood at greater then 70% since April 9th.

http://www.intrade.com/

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PLJ Says:
April 16th, 2009 at 8:51 am

This whole thing is just the continuing saga of Roger Smith – of “Roger and Me” fame. (I don’t like Michael Moore, but he was dead-on right in his criticism of this inept fool who ruined General Motors in my view).

Saturn is a company that NEVER should have come into existence. GM already had FIVE car divisions at the time, SIX if you count GEO.

What the hell were they thinking? “Well, the buyers are shunning our other six divisions, let’s form ANOTHER one!”

” And we’ll use the R&D money we made from Oldsmobile,” which had the TOP selling nameplate (Cutlass) in the world for many years. Rock solid quality, until that bean counter idiot in charge made the entire GM car lineup front wheel drive, poorly styled, cookie cutter vehicles that were barely distinguishable from one division to the other.

Well they ripped off Olds’ profits to start Saturn, and guess what happened to Oldsmobile. GONE. The oldest car company in the US. Out of business. There was no excuse for that. Americans loved Oldsmobiles! I put my head in my hands and just about weeped when that happened.

Saturn does make good stuff though. I bought my two oldest daughters Saturns, and they still have them (1999 SL1 and 2002 SC1) and they are going strong.

That SC1 coupe by the way had a 40 mpg rating on its sticker. Yep, you read that right – 40 MPG. Of course, that was before the EPA changed their rating system a oouple of years ago. But still, great mileage. The car has one of the slipperiest shapes in the business.

So, think of Saturn as the child of Oldsmobile, my friends. Olds gave its life for that brand.

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Dan Petit Says:
April 16th, 2009 at 9:02 am

I really like the idea of only Chevrolet, Cadillac, and Buick as GM.
These big three would allow for a very tight set of financial controls on everything. As well, in something called “group dynamics”, where, when there are only three parties to a single mindset, all three parties know what each other is about. (As opposed to, say, 7 or so very highly diverse corporate missions).
If I teach three technicians at a time, (the very optimal number of advanced systems techs for any shop), I can very easily keep track of what each of them are thinking while I explain each waveform, because of their body language, questions, (or lack of questions), and other aspects of their interactions.
I think that GM will be able to keep exceptional control over the advancements we need in order for us all to convert over to green electric motoring, by having three very big, mission-unified divisions in concert together.
Dan Petit Ausin TX.

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ccombs Says:
April 16th, 2009 at 9:15 am

GM with just Chevy, Buick, and Caddy is what I’ve wanted all along! It just makes sense. Consumers will be less confused, and a clear hierarchy can be established. GM can work its customers up from Chevys to Buicks to Caddys over their lifetime. Of course, I am too cheap to buy any non-base brand, but I’m sure others will. And then, of course, GM can EREV its entire lineup…

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kent beuchert Says:
April 16th, 2009 at 9:25 am

Thus we see the end result of unionized destruction of the auto industry -what’s left is a shell that (ala Lotus) designs and merchandises and then contracts offshore to build the cars (although they certainly COULD contract with non-union American workers). A corporation structured in that fashion could succeed.
ironic sidelight is that BYD (Volt’s soon to be erstwhile competitior)
is thinking of signing up with the saturn dealership org to market their cars. Thus shedding Saturn results in unbeatable competition for the car that the brainless Obama administration thinks will make
US auto companies profitable again. This is getting more and more bizarre.

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LauraM Says:
April 16th, 2009 at 9:35 am

Personally, I never understood why they would keep GMC anyway. There’s no reason to keep two trucks with two different name plates. Of course, I haven’t done their consumer surveys–if the cost is minimal and a significant percentage of GMC truck buyers say they wouldn’t buy a Chevy, then they should keep it.

About Saturn–I think GM is doing this as a public relations move. There are still people angry about Oldsmobile. People are upset with them about Pontiac and Saab. They don’t want to anger Saturn customers any more than they already have. And their arrangement with the Saturn dealers may not allow them to simply close the division down.

But I’m sure they’re privately hoping that this doesn’t work. The last thing they need is to give their competition increased access to the American market.

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Schmeltz Says:
April 16th, 2009 at 9:47 am

#44 Ccombs:
Agreed regarding the simplicity of the tri-brand scenario, Chevrolet/ Cadillac/Buick, although I just don’t know if Buick is a strong enough brand even for a niche, to carry along with Chevrolet and Cadillac. Currently the brands break down roughly like this for sales. The big question will be will 4-5% of total sales justify the existance of Buick in the abscence of GMC?

Out of total GM sales:

Chevrolet = 60%
Cadillac = 5%
Buick = 4%
GMC = 12%
Pontiac = 9%
Saturn = 7%
Hummer = 1%
Saab = less than 1%

The divisions slated to be dropped/spun off/sold constitute roughly 30% of total sales in aggregate. To get rid of GMC is a big hit on sales, but may be the wise route for the long term to keep from stealing Chevrolet sales. Moreover, keeping Buick creates a good opportunity to make a higher margin on a car with the same Chevrolet underpinnings, and maintain some brand loyalists as well. Buicks now have a sterling quality image to boot.

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Malamute Wolf Says:
April 16th, 2009 at 9:51 am

@#42 PLJ,

Yes! I was so upset when GM killed off Americas oldest car company. I really loved all the Oldsmobiles I have ever owned.

I have owned 15 cars from
Oldsmobile
Buick
Cadillac
Chevy
Toyota
Honda
Hyundai
AMC-Renault

And thus far my Olds Regency got me 320,000 miles without having any problems next to my newer Park Ave at 200,000 miles with having no problems at all. These are the 2 best cars ive owned/own.

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LauraM Says:
April 16th, 2009 at 9:51 am

#31 Bill Marsh

The problem is that GM can’t just shut down its brands. They have franchise agreements with their dealers. Closing Oldsmobile cost them a billion dollars. And the state franchise rules are even stricter now. Apparently, a bunch of states decided in November that instead of cooperating–they were going to make it even more expensive for GM to shut down dealers.

Besides, Chevrolet and Cadillac have a long history and loyal customers. There’s no reason to give that up in favor of a new brand.

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Schmeltz Says:
April 16th, 2009 at 9:57 am

Wanted to add to my comment at #47, that the big question is will 4-5% of total sales justify the existance of Buick in the abscence of GMC?

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john1701a Says:
April 16th, 2009 at 9:59 am

The problem is that GM can’t just shut down its brands. They have franchise agreements with their dealers.
_________________________

Yes, they can.

That’s what bankruptcy is for.

Reorganization not possible under normal circumstances suddenly becomes realistic upon filing. That’s why failed efforts to do it without have made way for taking that step. It’s pretty much the only option now available.

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DonC Says:
April 16th, 2009 at 10:21 am

#33 nasaman – You’re absolutely right that this would not be much different from what is happening now, or as BillR pointed out, what Sears does now. But people hate change OR the appearance of change.

#46 LauraM – The problem is you can calculate cost in different ways. There are the marginal costs of production — that’s what people generally think of. But there is also the loss of focus and co-ordination issues — both in development, marketing, and advertising — that arise from trying to pretend that two vehicles separated at birth are really distinct.

# 49 LauraM – john1710a has a good point about using bankruptcy but it may be a moot point. Because of falling sales and tight credit dealers are closing rapidly. Since the manufacturers want to keep the stronger dealers and shed the weaker ones, they may not need a bankruptcy to get where they want to go. The entire process may happen organically.

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Jackson Says:
April 16th, 2009 at 10:30 am

I’ve had 2 SL2s, I’m still driving the last one (a 2002, literally among the last ones). In my opinion, this is the best small car GM ever made. It’s a good thing, too; as it will likely be well into six-digit mileage by the time there is something meaningfully electric out there.

I agree with several who point out that
1) This is likely to be the opening in NM for Chinese manufacture
2) “Made to Saturn Specs” doesn’t mean “design your own”
3) The potential is high for it’s eventual eclipse of GM

The business model does indeed remind me of Wal-Mart. Before Wal-Mart, retailers went to manufacturers to see what they could get to go on their shelves; based on what the manufacturer was willing to make/charge. These days, the manufacturers go to Wal-Mart to see if they can get shelf space at the world’s largest retailer, based on what Wal-Mart wants to buy/at what price. The specifications and costing is Wal-Mart driving the manufacturing process, rather than adjusting cost / availability based on the manufacturer’s needs. The relationship has been turned on it’s head. Partly this is due to Wal-Mart’s size and power. The Black Oak deal may just be a tiny wedge in the door by comparison, but this is what it could come to if successful.

As a loyal Saturn customer, I must admit to some mixed feelings; even if this results in high-quality offerings. It’s a different dimension to moving manufacturing offshore (does anyone really think that US-sources are a credible alternative to this for the Black Oak deal?)

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noel park Says:
April 16th, 2009 at 10:38 am

#26 Rashiid Amul:

40+ years ago, it was SOP to custom order your GM car or truck. They had a paper form with 20 or 30 options. You paid your deposit, made your deal, checked the boxes for the color, interior, and options you wanted. Viola, 6-8 weeks later exactly the car you wanted arrived on a truck.

None of this LS, LX, LTZ, “option package” stuff where you have to take stuff you don’t want/need to get the stuff you do.

And this was done in the days of slide rules, Frieden calculators and 10 key adding machines. Maybe they had a Univac, LOL. So how can it be “too hard” today? It seems to me like it should be easier. They probably sent the form to Detroit via US Mail!

The value of GM collector vehicles today is directly related to what boxes the buyer ticked in 1965 or whatever. A SHP 427 in a Corvette can easily add $100K in value over a base 327. Or how about a Dodge Challenger with a factory 426 hemi?

As to GMC, it can go, IMHO. As to the Saturn dealers, anything they can do to salvage their businesses is OK with me. But I’m not buying a BYD from them or anybody else. But Black Oak Partners LLC? Can anyone say Cerberus, LMAO? We used to think that these guys were “Masters of the Universe”. Not any more. Where is “Chainsaw Al”, now that we need him?

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RB Says:
April 16th, 2009 at 10:38 am

The cars that would be sold however would be sourced from several different carmakers including large international brands. The cars would be built to order as new the Saturn would retain its own design center and create vehicles based on what customers want.
——————————————————–

If this change were to come to pass as described, it could be tumultuous. GM may be opening Pandora’s box.

/ “Pandora’s box” has a lot of different interpretations these days.

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Jackson Says:
April 16th, 2009 at 10:39 am

I meant “the opening in NA for Chinese [car] manufacture”

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Jackson Says:
April 16th, 2009 at 10:45 am

noel park (#54):

In 2001 I ordered my Saturn SL2 almost exactly this way. The difference was that I got the car in about half that time. They explained that the really long part of the process was the paperwork; so they always had the paperwork for every conceivable combination ready to go.

I think we can blame the Japanese for LS LT LuTZ (whatever) package mentality. You couldn’t build to order from across the ocean. As American auto buyers got used to buying cars as package levels, the US manufacturers tried to get some of the business back by emulating this (missing the point, as usual).

Looking back over the past 20 years or so, it’s interesting how often ‘progress’ has been characterized by the loss of something good and worthy in exchange for something with questionable benefits.

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noel park Says:
April 16th, 2009 at 10:47 am

#52 DonC:

Yeah, it’s like a big chicken game between GM/Chrysler and the dealers to see who goes broke first. Can GM/Chrysler hang on until the dealers go broke “organically”? Can the dealers hold on until GM/Chrysler have to buy them out? Tune in tomorrow for another exciting episode of “As the GM/Chrysler Turn”.

#55 Jackson:

It wouldn’t surprise me that much to see Wal-Mart become some sort of a distribution channel for BYD, Chery, or whatever. Costco already offers some sort of a car buying service for it’s customers.

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BillR Says:
April 16th, 2009 at 11:02 am

Although I’m not sure what the business intent of the new Saturn might be, what I could envision is again the Sears business model.

So Saturn negotiates with GM for a crossover based on the Lambda platform (Enclave, Acadia, Traverse, and Saturn Outlook). If their goal is to be fuel efficient and lower in cost, they will specify maybe two models, a low-cost version with cloth seats and basic features like PW, PDL, AC. They will contract GM to use their 2.4L direct injected 4 cyl (same as in the Equinox) to provide good fuel economy, yet low cost.

The second model might have the 3.0L direct injection V6 (slated for SRX, Equinox, and LaCrosse), more amenities like basic leather seats, XM radio, larger wheels, and 4WD, and for better mpg, offer something like the BAS+ hybrid system.

These more fuel efficient, low cost models would then compete with GM’s Lambdas which have the 3.6L direct injected V6 and more features and amenities, standard Onstar, and other upgrades (at a higher price point).

This could actually be to GM’s advantage, as they can keep their manufacturing volume high, while leaving service and warranties to others, and actually sell more vehicles than they do now.

And just like Sears, I can hear it now, “Would like our extended warranty with your vehicle, sir?”

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LauraM Says:
April 16th, 2009 at 11:26 am

#52 DonC/ #58 Noel Park

The problem with waiting for this to happen organically is that it’s not happening fast enough. Also, while it might reduce their costs for shutting down a brand, it won’t eliminate them altogether. I doubt that every single Hummer/Saab/GMC/Pontiac dealership will go out of business. Especially since a lot of them also have other franchises. Ch. 11 could eliminate this cost altogether.

So, as much as I hate to say it, I think john1701a is right that a bankruptcy might be the only solution. I think it’s risky, but there’s no real choice at this point.

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noel park Says:
April 16th, 2009 at 11:31 am

#60 LauraM:

Alas, I can only agree.

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HyperMiler Says:
April 16th, 2009 at 11:37 am

Well, now that Pontiac and GMC got the axe from GM, you will see Pontiac and GMC dealers selling Chinese and Indian vehicles in competition with Saturn dealers after Chinese and Indian automakers pick up Pontiac and GMC brand at the liquidation auction.

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DonC Says:
April 16th, 2009 at 12:06 pm

#60 LauraM – Chicken among millionaires. All the dealers know that most will have to exit. They just want to be the one left standing.

FWIW Toyota has about 1/4th the dealers that GM has.

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noel park Says:
April 16th, 2009 at 12:32 pm

#62 HyperMiler:

Nothing would surprise me any more. RB at #55 mentions the opening of Pandora’s box. It is well and truly open, IMHO. With ever stranger and scarier creatures flying out day by day.

It will be interesting to see what the Chinese and Indian auto manufacturers do to Japan, Inc. Much the same as Japan, Inc. has done to us is my guess. Minus the fact that Japanese in the homeland are too smart to cause their own destruction by buying imported cars, would be my bet. But I would also bet that China, Inc. and India, Inc. will really hurt them in the US market. Korea, Inc. isn’t doing them any good as it is.

As I reported the other day, I am finally forcing myself to read “The World Is Flat”, by Thomas L. Friedman. In last night’s reading, to my amazement, he quoted at length from Karl Marx. He said that in “Das Kapital”, published in 1848 (!) Marx bascially predicted what we call “globalization” today.

Marx said that capitalism was so efficient that it would eventually abolish all of the traditional “friction” in the system and source materials, labor, manufacturing capacity and customers world wide from the most “efficient” sources. He thought that this was all good as workers, finally realizing that they were in a global race to the bottom in terms of wages and living standards, would bring about his long desired “revolution”, and take the means of production away from the “bourgeois” and into their own hands.

Friedman is a grand supporter of the “flattening” of golbal commerce, and an ardent free enterpriser. He presents this as sort of a cautionary tale. Be careful what you wish for, you might get it. He also tips his hat to what he sees as the incredible prescience of Marx on this issue.

“Marxism” may be a dirty word in out society, and I may get some flak for even bringing this up. Still, there is a lesson here somewhere.

(Quote)
LauraM Says:
April 16th, 2009 at 12:39 pm

#63 DonC

I know. What I find unbelievable is that the states have decided to make this whole process more expensive. I’m beginning to think that we give the individual states too much power. When different states compete against each other, everyone loses.

The problem is that I don’t trust the federal government with to much power…

(Quote)
DaV8or Says:
April 16th, 2009 at 12:41 pm

I’m not sure why so many people seem to think Saturn wants to go down scale where there are slim profit margins. I see repeatedly people assuming Chinese hook ups. Why? I see Saturn going up scale and hooking up with European brands. Upscale is where the profit is. As to the picking and choosing the best cars from around the world and then sticking a Saturn badge on them, I think they will find that to be a logistical nightmare with regards to parts and service. Much more likely that they will align themselves with one, maybe two manufacturers and sticking there. I think it is highly likely that GM will be one of them.

(Quote)
noel park Says:
April 16th, 2009 at 12:51 pm

#66DaV8or:

The problem with that is that I don’t think that the successful European brands want any more dealers any more than GM does. Well maybe FIAT, LOL. Maybe they could give Saturn to FIAT, undercut Cerberus’ play, and send Chrysler to the dumpster once and for all.

No charge for that brilliant idea Fritz!

Although, come to think of it, GM didn’t come out too well in its last romance with FIAT, so maybe there is no love lost there, hehehe.

(Quote)
HyperMiler Says:
April 16th, 2009 at 1:21 pm

#64 noel park Says:

> It will be interesting to see what the Chinese and Indian auto manufacturers do to Japan, Inc.

Toyota, Honda, and Subaru will not be affected. Mazda, Mitsubishi, Nissan and Suzuki, not so much.

> Korea, Inc. isn’t doing them any good as it is.

According to Hyundai-Kia’s anaylsis, most of their new customers are former GM and Chrysler owners.

#66 DaV8or Says:

> I’m not sure why so many people seem to think Saturn wants to go down scale where there are slim profit margins.

You don’t go to Wal-mart to buy luxury goods; you don’t go to Saturn to buy luxury cars.

> I see Saturn going up scale and hooking up with European brands.

And resell whose car? Only German cars are competitive in the US; British, Swedish, and French cars are non-sellers in American market. Of German makes, only luxury makes(BMW, Mercedes, Audi, and Porsche) do well, while Opel(Saturn Astra) and VW struggle. Anybody and everybody whose car is competitive enough to sell in the US are already represented in the US, those who haven’t come aren’t competitive.

> Upscale is where the profit is.

If you have the goods to sell, that is.

(Quote)
N Riley Says:
April 16th, 2009 at 1:22 pm

Just getting a chance to check into the site and have not read any comments – just Lyle’s post. To me, the three brands make more sense than having GMC mixed in. GMC does not sell any cars, just trucks and SUVs. I don’t know if they still sell any van (mini or full sized) or not, but that doesn’t really matter. Either GM needs to drop GMC or allow only GMC to make trucks and commercial vans. In today’s world it just does not make any sense to mix up your brand like that. I am OK with GMC going.

(Quote)
fas Says:
April 16th, 2009 at 1:39 pm

Investors might show interest in buying Saturn but we cant really say a word till GM really manages to sell it.

(Quote)
LauraM Says:
April 16th, 2009 at 1:50 pm

#64 Noel Park

Japan is in major trouble right now. Their demographics are a nightmare. Their government debt is 180% of GDP–the highest in the industrialized world. Their domestic auto market is shrinking dramatically. (A lot of younger Japanese citizens prefer public transportation.) They’ve been facing protectionism and new rivals from Korea, China and India who want to develop their own industries. And, now, the American market collapsed overnight.

And, honestly, I’m not happy about. If America is going to lose its predominance, I’d much rather see Japan take our place than China. Japan may be an insular society, but they don’t have a record of human rights abuses. And their products are generally high quality. And, they haven’t shot down our weather satilites or hacked into our electric system. Or started massive loans to South American countries.

(Quote)
statik Says:
April 16th, 2009 at 2:35 pm

#64 noel park said:

As I reported the other day, I am finally forcing myself to read “The World Is Flat”, by Thomas L. Friedman. In last night’s reading, to my amazement, he quoted at length from Karl Marx. He said that in “Das Kapital”, published in 1848 (!) Marx bascially predicted what we call “globalization” today.

Friedman is a grand supporter of the “flattening” of golbal commerce, and an ardent free enterpriser. He presents this as sort of a cautionary tale. Be careful what you wish for, you might get it. He also tips his hat to what he sees as the incredible prescience of Marx on this issue.

“Marxism” may be a dirty word in out society, and I may get some flak for even bringing this up. Still, there is a lesson here somewhere.
====================

The World is Flat doesn’t read at all like the quasi- ’sequel’ does it? I have a original copy, and I always think I will check out the ‘updated version 3.0′ at the library…but I never do, darn those new Dilbert books, lol.

I found it to be a fairly interesting read, but his conclusions about how America keeps a head in a ‘flattening world’ was a little lacking in my opinion. (ditto for wrapping up Hot, Flat and Crowded).

It is like he really enjoys telling the story and revisiting history, along with his interaction with it…then just whips up a hasty summation/solution. I’d like to see a 420 page book from him with the same topic, but with the last 320 of them devouted to going forward and taking it farther down the line. It is easy to look back…but another thing to look forward and put yourself on the line.

/both good books though
//sorry about the diversion to the rest of the site, but noel is the only other guy I know that has read either one, just wanted to throw my 2p out…and maybe get his too

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Tom H Says:
April 16th, 2009 at 2:37 pm

Is an off topic post OK? On the BBC News site, BBCNews.com, there is a board similar to this one called Have Your Say. Topics are generally political or social. But today’s question is “would you buy an electric car”?

Today’s responses are overwhelmingly negative, and grossly mis-informed. The most confused newbie on this site is a PHEV genius compared to the posters on the BBC site.

They could use an GM-Volt powered truth squad to inform the primarily UK and US users about how electric cars, esp PHEVs really work.

C’mon guys (gals?). Check out the site and provide the board with some good old GM-Volt insight.

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Mitch Says:
April 16th, 2009 at 2:48 pm

Tom H

Why not post a link to here for them and get them educated

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Firehawk Says:
April 16th, 2009 at 3:17 pm

My wife and I currently drive a Saturn Outlook XR AWD. This is a fantastic vehicle. Much better than the Honda Pilot it replaced. The buying experience from Saturn was one of the best I have ever experienced. I tip my hat to them.

Hawk

(Quote)
noel park Says:
April 16th, 2009 at 3:21 pm

#72 statik:

I started “The World Is Flat” when it was a current best seller, but could not get past the first couple of chapters about the call centers, etc. I then read “Hot, Flat and Crowded”, which I found easier going. That, and the fact that I ran out of Bernard Cornwell “Sharpe” novels, led me back to try “TWIF” again. As to “HF&C”, I do agree with your comments. Mr. Friedman is a reporter, not a scientist or engineer, so I’m not too shocked that he didn’t lay out the definitive solutions.

On the other hand, the book was very professionally written and readable. So I think that a lot of its value lies in laying out the history and the problems, which I would hope will lead his large audience into getting more engaged and joining in the search for the elusive solutions.

As to “The World is Flat”, I am still wading through it. As you may recall, the quote from Marx, which, as you can see, just flabbergasted me, is only about halfway through. But, based on the above, I will not be too shocked if the result is the same. I mean, he’s not a trained economist either, although maybe that’s to his credit!

I think that your idea about trying to make constructive solutions for the future is an excellent one. As a reporter and best selling authour with obviously awesome contacts around the world, one would think that he could get access to the best scientific and economic experts out there and do a couple of more books on the solutions. Why don’t we both send him an e-mail and suggest same? I’ll bet there’s some sort of e-mail address in the books somewhere.

All i can say is that I have a now 6 year old grandson, and I look at him and wonder what is going to become of him. If medical technology marches on, his generation may very well live to be 100. How are they going to maintain decent lifestyles in the face of this global “flattening”? As you say, we had all better get busy and start trying to figure out some solutions.

(Quote)
noel park Says:
April 16th, 2009 at 3:30 pm

#72 statik:

I have often said the “The Dilbert Principle” is the greatest management textbook of all time. Totally applicable to the implosion of GM, IMHO.

I loved it so much that I ran out and bought the next one, I think it was “The Dilbert Future”. I found Scott Adams’ vision to be so dark that I put it down after the first couple of chapters, and never picked it up again. It is still staring at me from the bookshelf.

Maybe I’ll get it down and try again if and when I finish ‘TWIF”, LOL.

Thanks for the inspiration.

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Jeff M Says:
April 16th, 2009 at 4:44 pm

the irony is that it was via the Saturn network that GM leased the EV1…

(Quote)
AMillionBucks Says:
April 17th, 2009 at 6:18 pm

Ha!

The thing that GM sheds may be the most attractive piece in a few years.

(Quote)

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