GM-Penske deal to rescue Saturn falls through

Vehicles drive on Hogan Road past a Bangor Saturn dealership Thursday, Oct. 1, 2009, the day that General Motors announced it would stop making Saturns and will close down the brand after a deal fell through with Penske Automotive Group Inc. (Bangor Daily News/Bridget Brown)
BDN
Vehicles drive on Hogan Road past a Bangor Saturn dealership Thursday, Oct. 1, 2009, the day that General Motors announced it would stop making Saturns and will close down the brand after a deal fell through with Penske Automotive Group Inc. (Bangor Daily News/Bridget Brown)
By From Staff and Wire Reports, Special to the BDN
Posted Oct. 01, 2009, at 9:10 p.m.

WASHINGTON — Charlie Eickmeyer says he was a fan of Saturn vehicles years before he was able to drive. Today he’s in shock.

So were employees at Day Automotive Group in Pittsburgh when they read the news online that a deal to rescue Saturn had fallen through. And Mike Martin is left wondering how he can move the Saturns left on his lot or what to do with the employees at his Manassas, Va., dealership now that the brand is apparently doomed.

“It seemed like the deal was going through,” said Eickmeyer, 34, who started following Saturn when he was 10 years old and now runs a Web site for enthusiasts of the brand. “I was really excited about the next chapter in Saturn’s history.”

Saturn owners in the Bangor, Maine, area also were stunned and saddened by the news.

“I’m upset,” John Bell of Southwest Harbor said Thursday afternoon outside the Quirk Saturn dealership on Hogan Road in Bangor.

“I’ve had five of them and I really like them because they get such good gas mileage” — better than 30 miles per gallon — said Bell, a marine consultant and yacht delivery captain.

“Last year, it was great” to own a Saturn because of high gasoline prices, Bell said.

Bell is among those Saturn enthusiasts who hope the company finds a way to allow dealerships to stay afloat, particularly the one in Bangor.

“I feel bad for the guys because they’re a good bunch,” he said. “I hope somebody comes through for them.”

Duska Robinson of Bangor also was mourning Saturn’s demise.

“I love my Saturn,” she said of her 6½-year-old Vue SUV. “This is my second, but they’ve been long-lived.” She added that the first model she owned was the Saturn SL sedan she bought in 1997.

“They’re reliable and dependable,” she said.

A key feature for Robinson is that Saturns have built-in steel cages that protect motorists during collisions, which she said was important to her and her husband, Michael Robinson, given that their 15-year-old son was on the verge on learning to drive.

She added that a friend of hers who owned a Saturn station wagon walked away from a crash with a pulp truck in Orrington with only whiplash.

Saturn was supposed to have had a future under former race car driver Roger Penske, with his novel approach of filling dealerships with cars made overseas and rebranded as Saturns.

Instead, the collapse of talks between GM and Penske Automotive Group Inc. this week likely means the end of the nearly 25-year-old brand, sending Saturn dealers such as Martin and Day Automotive scrambling over what to do with their soon-to-be empty showrooms and leaving the company’s loyal owners mourning the apparent demise of a company that built its reputation on customer care.

GM said it will cease making Saturns at plants in Kansas, Mexico and Michigan almost immediately, but will continue to honor warranties after Saturn dealers stop selling cars. Saturn owners can still get their vehicles serviced at GM’s remaining dealerships once their Saturn dealer shuts down.

Saturn’s future has been in doubt since GM said earlier this year it planned to phase out the brand by 2011. GM was shrinking to four brands as part of a deep restructuring. Just five days after GM filed for bankruptcy, Penske emerged as a possible buyer for Saturn. Wednesday, Penske backed out, unable to find another company to supply vehicles after GM stops making Saturns in two years.

More than 350 Saturn dealers expecting to hear about the closing of a deal instead are faced with shutting down their showrooms if they don’t have a viable contingency plan. Thousands of jobs are in jeopardy. Dealers will have to figure out how to sell remaining vehicles to customers who may be skittish over the news that the brand will disappear. But they won’t close immediately — GM gave dealerships until October 2010 to wind down their operations.

The owners of the two Saturn dealerships in Maine — Saturn of Bangor and Saturn of Westbrook — did not return calls seeking comment Thursday.

Many Saturn dealers have already been through difficult times recently, hit by a combination of one of the worst downturns in auto sales in decades and the uncertainty about the brand’s future. In a clear sign of that pain, GM reported Thursday that Saturn sales were down 84 percent in September from a year ago. But about 13,000 jobs are still tied to Saturn, the vast majority of them at dealerships.

GM had a midday conference call with dealers to discuss the closures. Dealers said executives expressed shock and disappointment that the Penske deal fell through, but didn’t provide much detail on the specifics.

The mood was grim Thursday at dealerships, where owners said they were blindsided by the news.

“This is nothing short of the bride running away at the altar,” said Lou Gonzales, president and owner of the Saturn of Antelope Valley dealership in Palmdale, about 60 miles north of Los Angeles. “The millions of Saturn customers across the United States, I’m sure are disappointed. But they will not be left out in the lurch.”

At Day Automotive, owner Bill Numrich said he planned to keep selling Saturns as long as he could.

“We still have a Saturn customer base that we have to service,” said Numrich.

GM spokesman John M. McDonald said GM estimates it will take four months to sell the existing inventory of 12,000 Saturns. Dealers believe it could take longer, worried they will have difficulty selling a lame-duck brand to customers.

Martin was weighing whether to run his lot as a used car business or shift his employees over to the Chevrolet dealership he also operates nearby. He has only about 25 Saturns left on his lot after the popular cash for clunkers program, but said he hoped GM would offer some generous incentive programs to help dealers sell out the cars that remained.

There are no plans to offer any special incentives to help sell remaining vehicles, McDonald said. Other brands that are winding down such as Pontiac still are selling well without any extras.

Martin bought the Saturn dealership three years ago because he liked the product line of reliable vehicles with good gas mileage, such as the Aura sedan.

“We had a lot of faith in Saturn,” Martin said.

So did customers. Saturn was a meant to be a warm and fuzzy car company, one that invited customers to annual events at its plants and sent buyers birthday cards on the anniversaries of their purchases. It featured low-key showrooms and no-haggle prices, part of its “a different kind of car company” slogan. But the brand struggled to make money, and receded into the background as GM focused on higher profit SUVs and trucks.

BDN writer Dawn Gagnon contributed to this report.

http://bangordailynews.com/2009/10/01/business/gmpenske-deal-to-rescue-saturn-falls-through/ printed on September 22, 2014