From Aggiegreenhouse

Penske (PAG $15.15) and GM (MTLQQ.PK: $0.6650)

Penske drops Saturn deal with General Motors

(c) Tony's Greenhouse

As the former owner of a 1996 Saturn SL2, I loved my Saturn car. I bought into the brand to revolutionize the American Automotive Car Industry early. Saturn talked about bringing Japanese manufacturing techniques of efficiency to the American worker. Quality car making was obviously not part of the Made in the USA mentality. American cars were known as service nightmares. I took a picture standing beside my black-gold 4-door manual shift with sunroof, CD player and automatic accessories car as a first time car buyer.

My own experience with Saturn

I remember, I teared up as the entire staff of the dealership gathered everybody around and started the tradition. Clap. CLAP... CLAP! CLAP! "EVERYBODY, Today here we have Anthony. And this is his first new car!" CLAP. CLAP. CLAP. CLAP. My mom looked on so proud. The camera bulb went FLASH!. That was the only graduation to adulthood photo I ever got. I felt so special. I was a customer for life. I've NEVER seen that from another car dealer. I've never felt my money making a difference like it did that day.

That 'feeling' is something you just can't replace. Look at Apple. Sure they are more expensive, but what about customer loyalty. So, naturally, I feel concerned about the Penske deal fall-out. Not being a car industry expert, Renault (the French company) and Nissan (the ever present Japanese) backed out on a deal that would involve manufacturing the Saturn line of cars past the 2011 deadline for the GM plants. "Lack of confidence in the North American car market," was to blame. I say, HELLO! No DUH! We have too many cars from everybody. Call this what it is.

This is a down-sizing

This is a down-sizing of the American lust for cars and petrol. Who did it? Saddam Hussein. George Bush. Osama Bin Laden. The Iraqi-Afghan War. No, it was OPEC and the rising cost to fill up at the pump. I use to fill my car for almost a week on $20.00. Now at more than $2.50 gas at the pump we pay, $40 every week on our latest mode of transportation. When I bought this car in 1998, that's what my mother paid for her SUV to gas up, so imagine what that monstrosity guzzles now!

And there is the irony, Saturn's have historically been a line of cars that push fuel-efficiency. Even after they caved in and added the Outlook Crossover and GM bought the Hummer line to reach to a larger, richer demographic, the cars still kept that focus. The Saturn VUE line was just fine were it was, but was too small. Super-size for America and you got a company that can't satisfy every market and you lose the fuel-efficiency goals. The Saturn VUE was to be the premiere diversified line of gas, gas-electric, and all-electric in one model car line. That was American Revolution. This was a different kind of car company. It never fully materialized. Why? Conspiracy against progress theorist are still working out the details.

Saturn: since day 1.

"Saturn has been doing customers right since day 1." In short, Saturn was the GM lab experiment to "do-it-better" than the Japanese that met with dividends and then met with budget cuts. How often does the CEO, Chairman or Board of a major US Corporation make that decision to do business as usual? How often do these power business men and women satisfy their immediate paychecks and pension funds and severance packages and not build a company to last through times like the current recession? How often do we see the golden parachute bail out those that make too much money from bad choices, making bail outs and getting billions of tax payer dollars for a trip to Las Vegas or the mortgage payment on a mansion or yacht? I can go on for days in this vein, but you get the point.

Saturn is the Great General Motors experiment (akin to the EV1) that is getting the ax. Deja Vu anyone? Detroit, Michigan, USA is one step closer to being less of a leader in the industry for it.

So what is the outlook?

My chief concern with GM tanking on a deal to spin off the Saturn franchise is that no electric vehicle has been brought to market for the second time from this company. Is an all electric vehicle for the mass market too soon? Tell that to us when we pay $3.50 per gallon of gasoline, on top of the car payment, regular maintenance cost, auto insurance, state vehicle tax, etc. etc. etc. How can GM not spin off the original Tennessee plant where Saturn began into another car manufacturer - small, more able to move with the market, more able to stay in touch with the customer. Telecommunications does spin-off all the time. Why is it the auto industry goes through a boom, then a bust, then a sell off and finally a reconfiguration of the same players just in a different combination... leading to the repeat of the same failed system! We as taxpayers own the majority stake in General Motors, let's make a better kind of car transnational corporation!