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Oracle of Delphi

The e-mail video that General Motors Corp. sent to its Saturn dealers last night was an odd mix of apology and pep rally.

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By Maria Panaritis

INQUIRER STAFF WRITER

The e-mail video that General Motors Corp. sent to its Saturn dealers last night was an odd mix of apology and pep rally.

The automaker had just told Congress it would do away with Saturn as part of a drastic restructuring plan to qualify GM for billions more in emergency taxpayer loans.

For 209 Saturn franchises across the country - a dozen of which are in the Philadelphia area - the news was potentially devastating.

"I know you've been dealing with the emotion of it, the frustration of it, maybe even the anger of it," Jill Lajdziak, general manager of Saturn, said as dealers Tom Zimbrick and Todd Ingersoll sat by her side in the video.

But the company did not want dealers to panic. Rather, Lajdziak explained, officials were scurrying to sell the name and dealership network that had once been GM's great hope for winning back market share from the foreign competition.

They asked dealers to hold on for at least two more months. The company, and a task force of dealer-advisers, was exploring what could be done to get Saturn sold.

The news intensified anxiety among dealers already in turmoil as GM, Ford Motor Co., and Chrysler L.L.C. have been pushing to reduce the number of showrooms overall to cope with a sharp decline in sales in this recession.

In announcing yesterday that it would need up to $30 billion in federal aid, GM said it planned to eliminate 1,650 dealerships by 2014.

GM may sell the Saturn subsidiary it created two decades ago to private investors that could include a consortium of Saturn dealers themselves.

It also might sell Saturn to foreign automakers who would love a ready-made network of U.S. showrooms in which to introduce their cars to U.S. consumers.

The idea is to find a way for GM to spin off Saturn so that it lives beyond 2012, when the automaker said it would cease producing the brand.

All options remained in early stages today, said Saturn spokesman Steve Janisse.

"We're at the point where we're starting to put the package together and meeting with different types of folks that might be interested in investing," Janisse said.

He said that Japanese and European carmakers were among those that had expressed interest and that the company had not ruled out that Chinese or Indian manufacturers might join discussions in the coming weeks.

Dealers, meanwhile, who had invested millions to launch retail sites for GM's Saturn line, remained on edge.

"I think they're circling the wagons to see what options they have," said Kevin Mazzucola, executive director of the Automobile Dealers Association of Greater Philadelphia.

"The only thing we're sure that's going to happen is that GM is not going to manufacture Saturn vehicles three years from now," said Harrisburg lawyer Stephen A. Moore, an automotive law expert. "And that has not made any of the dealers happy."

Moore said the owners of Saturn dealerships in the region - including eight in Southeastern Pennsylvania and three in South Jersey - were on pins and needles. They invested millions of their own dollars to buy land, build dealerships, and train employees to help GM launch Saturn.

"Just the land and facilities, you're talking $2 [million] to $3 million or more," said Moore. "In Southeastern Pennsylvania, it's probably significantly more than that."

Fortunately, he said, because Saturn was established as a wholly owned subsidiary of GM, it can be sold in a "nice, neat package."

"Right now there's a number of Chinese manufacturers trying to break into the United States," Moore said. The same is true of Indian automakers. They might view Saturn as a way to saturate the market with their cars.

A foreign buyer could acquire Saturn and then work out a separate deal with GM, for example, to use its U.S. factories to produce the cars. Those cars might be sold as Saturns or they might be sold under a foreign moniker.

But with businesses finding it hard to secure the loans needed to make large acquisitions, finding a buyer might be harder than it looks. Plus, all automakers are in a tough spot these days, and they are the most likely buyers.

"Give us 60 days to work through this," said Zimbrick, one of the dealers on the video, who is serving on a task force to spin off the company.

"We've got to move fast," Lajdziak said.

Link: http://www.philly.com/inquirer/breaking/bu...ealerships.html

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How about PSA as a buyer? A Satroën C6 would be wonderful. Saturn dealers would remain in business, and since Saturn is a relatively low volume brand, there won't be much of a change in the factories.

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So, in review:

Saturn costs GM far too much money to continue operating.

Sell it to a foreign company and literally help them develop a network of dealerships to immediately start as a direct competitor.

Not only give this new company some of your clientele, but even offer to build their cars for them in your own factories with employees already shaking their low-slung heads at the decision-making in upper management. As if employee morale wasn't bankrupt already, have these proudly (North) American employees build a car for a, likely, Chinese company.

GM, as if your nuts didn't hurt enough already?

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So, in review:

Saturn costs GM far too much money to continue operating.

Sell it to a foreign company and literally help them develop a network of dealerships to immediately start as a direct competitor.

Not only give this new company some of your clientele, but even offer to build their cars for them in your own factories with employees already shaking their low-slung heads at the decision-making in upper management. As if employee morale wasn't bankrupt already, have these proudly (North) American employees build a car for a, likely, Chinese company.

GM, as if your nuts didn't hurt enough already?

Why should the bad decisions stop just because there's a crisis? They steered themselves over the cliff and, now, management is stepping on the gas!

Upper management (and the Board of Directors) should have been out in '05, when record US car sales still resulted in red-ink.

Absurd.

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I agree with the decisions to dump Hummer and reduce Pontiac to a niche, but Saturn? Where has is ever been proven that the "step-up" branding that GM pioneered a half century ago doesn't work anymore? Why not sell the same basic vehicle in multiple "flavors" for different customers? It works in apparel, it works in housing, why not cars? Ironically, Saturn right now has the best vehicle portfolio in its history.

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I still think it should be kept and reduced to niche status...

Then again, maybe with this spin off, GM envisions reacquiring Saturn some day. (a la Delphi)

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So, in review:

Saturn costs GM far too much money to continue operating.

Sell it to a foreign company and literally help them develop a network of dealerships to immediately start as a direct competitor.

Not only give this new company some of your clientele, but even offer to build their cars for them in your own factories with employees already shaking their low-slung heads at the decision-making in upper management. As if employee morale wasn't bankrupt already, have these proudly (North) American employees build a car for a, likely, Chinese company.

GM, as if your nuts didn't hurt enough already?

My same exact thoughts... frusterating.

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They killed Oldsmobile just to make Saturn into Oldsmobile just to kill Saturn.

Insanity.

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They killed Oldsmobile just to make Saturn into Oldsmobile just to kill Saturn.

Insanity.

Well, at least they're consistent. :stupid:

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How about PSA as a buyer? A Satroën C6 would be wonderful. Saturn dealers would remain in business, and since Saturn is a relatively low volume brand, there won't be much of a change in the factories.

This has been floating around as a possibility and I have to say I wouldn't mind a C6 on American shores.

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Olds was killed to save Saturn, and I was pissed. Saturn deserves to die, because if Saturn didn't go we all know Pontiac would. Saturn never could become Olds so why didn't we get rid of Saturn in the first place when Olds was actually making gains with Lexus-like customers with cars like the Aurora? The email is odd and think Saturn will be gone for good in 2011 unless some crazy dealers take them over and "brand" Saturn cars from other company's or a China brand buys them (more likely).

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The email is odd and think Saturn will be gone for good in 2011 unless some crazy dealers take them over and "brand" Saturn cars from other company's or a China brand buys them (more likely).

Better the French than the Chinese. I don't think the Chinese would manage to get away with doing that.

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Hmm. I suppose PSA wouldn't be a bad option at all for Saturn to be purchased, but if they were spun-off independently, then what? Get more Opels? They couldn't though I suppose due to Buick and Opel being aligned.

Aye, such massive headaches.

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If a company does buy up Saturn, I have doubts it'll even keep the name.

One of the things that hurt the 'new' Saturn was that the brand was regarded as being populated only by plastic-paneled loser-mobiles.

Edited by Captainbooyah
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Yet oddly, Saturn had strong sales of those plastic paneled loser mobiles. It wasn't until they started offering generic GM stuff that they fell off.

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So, in review:

Saturn costs GM far too much money to continue operating.

Sell it to a foreign company and literally help them develop a network of dealerships to immediately start as a direct competitor.

Not only give this new company some of your clientele, but even offer to build their cars for them in your own factories with employees already shaking their low-slung heads at the decision-making in upper management. As if employee morale wasn't bankrupt already, have these proudly (North) American employees build a car for a, likely, Chinese company.

GM, as if your nuts didn't hurt enough already?

Not much more needs to be said than this.

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