General Motors said Wednesday it would shut down Saturn after respected Detroit businessman Roger Penske shocked GM and 350 Saturn dealers by saying that his plans to buy the storied brand had fallen apart.
The announcement came a day before GM and its dealers expected the deal to be finalized. The failure could cost as many as 13,000 jobs at dealerships nationwide and GM.
Penske’s plans for Saturn depended on securing another manufacturer to build future vehicles ? a critical part of deal that fell apart when the board of directors for that unidentified automaker rejected the arrangement.
That manufacturer was Renault-Nissan, a person close to the talks told the Detroit Free Press.
“Renault has been in contact with Penske to supply cars, parts and technology to Saturn through an OEM agreement. The conditions for an agreement have not been found,” a Renault spokeswoman, said in a statement. She declined further comment.
“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,” Fritz Henderson, GM chief executive officer, said.
The blow was especially brutal to Saturn’s 350 dealers and thousands of their employees, who believed they had escaped the guillotine with the arrival of Penske’s initial offer for Saturn last June.
“It’s devastating. Look what we have gone through in this town. Look at what other dealerships have gone through in this town,” said Carl Galeana, who was one of Saturn’s original dealers and owns the metro Detroit Saturn of Lakeside and Saturn of Warren dealerships. “This is just another chapter of that.”
In a statement, Penske cited that the deal had been called off because of concerns related “to future supply of vehicles beyond the supply period it had negotiated with GM.”
Bloomfield Hills, Mich.-based Penske said it had negotiated a deal to get products manufactured by another company but that agreement had fallen apart.
“That agreement was rejected by that manufacturer’s board of directors,” Penske said in a statement. “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.”
GM and Penske had been negotiating toward a final agreement since June 5. The terms of the original agreement called for GM to continue providing Saturn with vehicles for two years.
At the time, Roger Penske, chairman of Penske Automotive, said they had “been in discussions during this diligence period with a number of manufacturers on a worldwide basis. … We would expect to have a lineup going forward, which would be manufactured by a worldwide partner.”
In early 2009, GM said it planned to wind down Saturn if a buyer could not be found.
GM’s Henderson noted that Penske’s statement “explained that their decision was not based on interactions with GM or Saturn retailers; rather it was because of the inability to source new products beyond what it had asked GM to build on contract.”
Henderson added that GM will be winding down the Saturn brand and dealership network “in accordance with the wind-down agreements that Saturn dealers recently signed with GM.”
Once Saturn is done, Saturn owners will be able to get their vehicles serviced at other GM dealerships.
(c) 2009, Detroit Free Press. Source: McClatchy-Tribune Information Services.