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Stardust from Saturn

Bits and pieces of doomed brand live on at GM, elsewhere

Chrissie Thompson

Automotive News -- April 5, 2010 - 12:01 am ET

GM Chairman Roger Smith's 1982 vision went down in flames.

Saturn is dying, but traces of its DNA will live on.

Even before the body is cold, critics are citing the causes of death: lack of product, absent profits, and "learning disabilities" on the part of General Motors and the UAW, says Mike Bennett, Saturn's former UAW leader.

GM launched Saturn in 1982 to reinvent the way the share-losing automaker did business and to find a way to compete with Japanese small-car offerings. But Chairman Roger Smith's experiment failed, and GM killed the brand last year after auto retailer Roger Penske backed out of a deal to buy it.

As for Saturn's big-picture impact on GM, Bennett says: "We were incapable of transferring the innovations from the learning lab here back into General Motors and the other UAW facilities."

At first glance, about 350 emptying dealerships appear to be the only lasting impact of Saturn. But Bennett and others agree: Variations of some Saturn innovations stuck, either at GM or elsewhere in the industry. Here are some key parts of Saturn's legacy.

No-haggle selling

What it was: Dealers offered fixed prices on vehicles, eliminating the bargaining.

How it started: Before Saturn started selling cars, Smith's Saturn team asked 5,000 import owners for their opinions about car-buying.

"Far and above was to get rid of the haggling," says Don Hudler, a former Saturn vice president of sales, service and marketing who later chaired Saturn Corp.

"They said, 'Treat me as if I have a brain.' "

So Saturn told dealers they could choose their own prices and even change them daily.

"But each morning when you turn your lights on, set a price and stick to it," recalls Tom Shaver, who directed Saturn's consumer marketing from 1987 to 1992.

Still, dealers usually stuck with the sticker price, and that worked for customers.

"What the customer was totally concerned with was paying the same price as their neighbor for their vehicle," Shaver says. "They just didn't want to pay $100 more."

Where it is now: Some Saturn dealers saw customers responding to the haggle-free approach and implemented it at their other stores. Joe Serra does so at nine of his family's 23 Serra Automotive dealerships, including the Chevrolet store he opened last month in his old Saturn building in metro Detroit.

At those stores, he compensates salespeople based on the number of units sold, not the amount the store makes from their sale. By eliminating haggling and emphasizing volume, Serra says, "I'm not going to move you to a product that doesn't fit your wants and needs but costs more." The salesperson makes the same whether a customer buys a GMC Yukon Denali or a Chevrolet Cobalt, he says.

Hudler, the former Saturn chairman, who owned three Saturn stores in Dallas and three in Houston, says he's "very close" to putting new GM and import franchises in four or five of them. He says those stores will feature haggle-free selling "without a doubt."

Dealership atmosphere

What it was: Saturn dealers offered coffee and popcorn when customers walked in the store, then let them browse for as long as they wanted.

How it started: The Saturn team studied all sorts of nonautomotive retail companies for inspiration. Observing The Walt Disney Co. taught Saturn to entertain people while they were waiting, Hudler says.

And, Shaver says, McDonald's Corp. taught the team to establish strict and specific standards for dealers.

At McDonald's, a corporate team would make unannounced visits to stores, measuring burgers' temperatures, inspecting cleanliness and even making sure no burger wrappers were found within half a mile of stores. McDonald's warned and then canned stores that failed to meet standards.

After visiting McDonald's Hamburger University, Shaver reported back to the Saturn team: "I said, 'We've got to hang a Saturn retailer every quarter to let them know that we're serious.' "

In the end, Shaver says, he didn't have to follow through on that plan. But the Saturn team would confront dealers who weren't following recommended practices to the letter.

Where it is now: The standards worked -- so well that coffee and popcorn and a more relaxed atmosphere became common at dealerships. Some dealers have even beefed up store offerings to include massages and cafes.

Market-area control

What it was: Saturn dealers had control of large territories, with only a couple of franchises in large metro areas. That way, dealers didn't compete against one another.

How it started: "Overdealering" was a hot issue for dealers.

"We were trying to secure the very best dealers, and probably the No. 1 ingredient to that was the market-area concept," Hudler says.

Saturn dealer Tom Carpenter, who had three Saturn stores in Columbus, Ohio, says controlling an entire market enabled Saturn's no-haggle pricing to work.

"We weren't focused on negotiating," Carpenter says. "If you have one really strong competitor, you could be kind of committing suicide if you do that."

Where it is now: GM attempted to bring its dealer footprint more in line with that vision when it said last year before its bankruptcy that it would cut 1,350 dealerships and about 650 franchises at dualed GM stores.

The automaker since has offered reinstatement to 661 dealers and is pursuing settlements and arbitration with more dealers, so it's anyone's guess how many dealers GM will have this fall. But one thing is clear, Shaver says: If the market-area concept had caught on a couple of decades ago, GM wouldn't have the problem it has now.

Parts network

What it was: Saturn prescribed the correct level of parts inventory for each dealer. If dealers agreed to order that amount, Saturn promised to buy back leftover parts once they became obsolete.

How it started: The Saturn team's research found that 40 percent of all parts in dealer inventories were obsolete, Hudler says. So Saturn used GM's data about the number of vehicles in an area to come up with its own parts recommendations.

Jim Waterbury, who helped implement the Saturn system when he worked for EDS, says: "They were in the mode of allowing dealer demand to pull inventory from the warehouses down to the dealership, rather than what we call a 'push' or 'marketing' approach where the factory would try to sell them parts."

Hudler says that in addition to saving dealers money, the policy simplified parts operations.

"You could have a smaller parts department, and by Saturn managing the inventory, you didn't have to have a rocket scientist as a parts manager," he says.

Where it is now: Several foreign automakers now implement this system, Waterbury says. He later moved to Chrysler to implement Mopar 5300, a parts program similar to Saturn's.

"I was more or less head-hunted out of EDS," Waterbury says.

GM also uses the Saturn system companywide, with slight variations.

Partnership with the UAW

GM and the UAW scrapped their unique Saturn labor agreement years ago. But two elements survive, albeit in watered-down form.

What it was: Flexible labor contracts cut costs by allowing workers to rotate through nontraditional shifts. UAW members helped make even top-level decisions by sitting on corporate committees.

How it started: Saturn allowed for flexible overtime shifts at its plant in Spring Hill, Tenn., running two 10-hour shifts a day. The labor agreement said UAW members could work up to 40 hours, any day of the week at the standard rate, rather than being paid time-and-a-half for all overtime and Saturday jobs. Workers took turns working first or second shift, Bennett says, so GM omitted the cost of paying the later workers more.

In addition, Saturn had UAW members on its corporate committees, taking a process pioneered by Asian automakers to the next level. Those committee members would then advocate back at the plant for management decisions they had helped make.

"You got the input and the participation of the people," says Guy Briggs, formerly vice president in charge of Saturn's manufacturing operations. "They wanted to be there."

For instance, Hudler says, when Saturn decided to offer a 30-day money-back guarantee, workers embraced the challenge of building the best cars possible.

"They were involved in the decision, so they had some ownership in it," he says.

Where it is now: Some elements of the flexible labor agreement laid the foundation for current union contracts. For instance, GM cut costs during its restructuring by running some of its plants on four-day, 10-hour shifts without having to pay workers extra for putting in long days, spokesman Chris Lee says.

GM's SUV factory in Arlington, Texas, was running on that schedule this winter, when unexpected demand for the vehicles sent supply to less than half the analyst-recommended 60-day level. So since the end of January, GM has run the plant on two 10-hour shifts, five days a week, with a few overtime Saturdays in March and upcoming in April.

Saturn also showed that participatory management could work at Detroit automakers' plants. Today, UAW members give some form of input at all three.

Early last decade, Ford Motor Co. began restructuring to encourage changes based on hourly workers' feedback, spokeswoman Marcey Evans says. Under the new system, a worker serves as a team leader who troubleshoots problems on the line and then suggests changes.

Chrysler Group workers' input has driven changes such as a shift in parts storage at the minivan plant in Windsor, Ontario. Chrysler used to pile parts next to the assembly line, Chief Purchasing Officer Scott Garberding said at Chrysler's five-year plan presentation in the fall. Employees would have to walk back and forth between the piles and the line. Now, many parts are stored inside the car, at arm's length for workers.

GM recently used UAW members to develop job descriptions for workers assembling the Chevrolet Volt plug-in hybrid and then teach those jobs to workers at its Detroit- Hamtramck plant.

A new era? 'No way'

In a famous clash, Steve Yokich, the UAW's lead GM negotiator who was elected president of the union in 1995, fought Bennett's idea of a different kind of car company -- and won.

"He told me to my face that there was no way he was going to let this filter back into GM," recalls the now-retired Bennett, whom workers voted off the UAW local executive board in 1999 as part of an endorsement of normal UAW practices.

But Yokich doesn't deserve all the blame for Saturn's failure. Despite applying a few of Saturn's good ideas, GM executives didn't follow through on the promise of creating Roger Smith's ultimate import-fighter or incorporating the lessons learned into the larger GM playbook.

That lack of commitment ultimately became clear in the showroom, where the auto industry's key battles are won and lost: For too long, Saturn was forced to struggle along with aging products.

The end result was too many years of red ink.

"The original concept of a lab I don't think entertained the idea that this was going to make some money as a business," Briggs says.

In the end, Saturn didn't reverse GM's sliding U.S. share, much less make the automaker money, so GM let it go. But Bennett says he still believes a Saturnized GM wouldn't have had to make that decision in the first place.

"I don't think General Motors would have been in the trouble it is today. I really don't."


Here's what has happened to some of the people behind Saturn's innovations.

Mike Bennett

Former president of UAW Local 1853, 65

• Resigned in 1996 but held other UAW leadership positions until he was voted off the UAW local executive board in 1999

• Living in Spring Hill, Tenn.; just finished writing a book about the history of his home county of Maury; campaigning for consolidating the governments of Maury County and its towns

Guy Briggs

Former head of manufacturing, 71

• Left Saturn in 1991 for GM Truck Group; later ran GM's North American manufacturing and labor relations

• Retired in 2006; lives near Flint, Mich.; enjoys skiing

Don Hudler

Former Saturn chairman, 75

• Retired from Saturn in 1999 but headed Saturn Retail Enterprises until 2001

• Trying to put other franchises in his 6 Texas Saturn dealerships

Tom Shaver

Former head of consumer marketing, 69

• Left Saturn in 1992 for a 3-year stint as vice president at Volkswagen of America; was senior partner at J.D. Power and Associates until 2005

• Retired to Thousand Oaks, Calif.; hopes to master Haydn's Concerto for Trumpet this year

Read more: http://www.autonews.com/article/20100405/OEM06/304059994/1266#ixzz0kEgFY5GE

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Ok so this might be long

I used to travel each summer could be gone four to eigth weeks in a row. No matter what, the wife would have a car problem while I was gone and off to the dealer she would go. Leaving her more pissed off each time. In 1992 I had heard of a Saturn dealer that opened in the aera. So guess what, we stopped in. Could not believe how we were treated. More so she could not believe how she was treated. They asked who would be driving the car if we were to buy one, and she said she would. So off they went to look at cars. That poor boy showed her every color of the car she liked (SL2)then lined up each color she liked so she could see them side by side. Once she got it down to three colors they went driving. Then drove some more. She purdy much decided she wanted the medium red loaded SL2, thats when it got interesting. Never once did he ask how much she would put down, never once asked what her credit was like, he took the car out back to be cleaned. When it was clean he showed her where everything in the car was. How to operate the radio, gas door, hood, and so on. The he put a dealer plate on the car and told her to take it home over night so she could see how it looked when no sales person was around. She went in alone the next day and bought the car.

Now comes the part when I was out of town and the power window went INOP. She called me and, I told the proof was in the pudding. Take the car in and see what happens. She rolled onto the service drive just after 7am. Pulls up and a writer come out within 2 mins. Listens to everything she has to say and tells her it will be done before noon, do you need a ride home? They go inside and he shows her where the coffee is, shows her where the donuts are, shows her where to lounge is. Then takes her to the front to sign up for her ride home that leaves at 8am. She settles in with a cup of coffee when a gent walks up to her and says (something like) I hear you live right up the road. If you want I can get you home right now and I can pick you up when your car is done. After she was picked and made it back to the store her writer meets her on the drive. Tells her everything that was done to the car, then pulls the car onto the drive aks her if she would like a scent sprayed in the car cause they did wash (windows were clean) and vacuum it. She said ok and then he asked what scent she liked the best of what he had. He gave it a spritz, then off to the cashier they went. Signed for the warranty work and he took her to her car opened the door for her and off she goes noticing they had put (wraped) pillow mints near the e-brake on a Saturn napkin. Over the years we bought 15 SATURNs for work cars and the five kids ... never once having a bad thing to say about our Saturn store. Can't say that about the Caddy, Honda, Toyota stores we delt with those same years. So no matter what cars we buy in the future they will always be compared to the SATURN store we used. If they can't come up to 90% they'll not sell us another car.

PS: GM had no idea how to market that? ..... they were FOOLS.

Edited by RjION

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chevy would benefit from a saturn makeover but the problem is the long time chevy dealers are such rubes and have no desire to modify the way they do business, or make nice facilities.

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chevy would benefit from a saturn makeover but the problem is the long time chevy dealers are such rubes and have no desire to modify the way they do business, or make nice facilities.

And this is why Saturn made sense over putting those funds into existing brands. The existing dealers, factories, managers, pretty much everything was so entrenched with the old GM culture that change just wasn't going to happen. Unfortunately the entrenched GM culture STILL managed to kill Saturn by cutting off support before it was appropriate. GM has made some progress (through change that IMO couldn't have happened without the need for change being made obvious by BANKRUPTCY), but still has dealers that are sub-par, if not unscrupulous.

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