GM’s Jill Lajdziak has written a letter (PDF) to Saturn dealers and customers warning that the General is actively pursuing a spin-off for its “different kind of car company.” Explaining that Saturn Distribution Corporation is “already an independent subsidiary,” Lajdziak says that Saturn dealers would be able to source GM products until 2011, and “if successful, SDC at that point would source products from other manufacturers.” Meanwhile, sit tight and enjoy the ride. “GM will support the continued availability of Saturn parts and service as needed,” says Lajdziak. So while Saturn struggles along under the toxic stench of rejection by GM, let the speculation begin! Will a German government-backed Opel take on the distribution net? Will an upstart Chinese firm see this as a cheap entry to the American market? Or is 2011 the end of the road for Roger Smith’s experiment?
“Find future vehicles that match the Saturn brand” eh?
Also, how does one go about spinning off an indirect entity, yet one that is the American distribution point for Opel?
Look for Chrysler to find a rose and a note from FIAT on the pillow case in the morning.
Bunter
Interesting. When Studebaker shut-down their South Bend Main (auto) and Chippewa Avenue, South Bend (light truck) plants around Christmas 1963, they re-organized the automotive distribution company and called it “Studebaker Automotive Sales Corporation” and imported Studebaker cars from their last remaining factory in Hamilton, Ontario through early 1966.
Originally, the plans were to farm-out the manufacture of cars as soon as possible; in fact, Gordon Grundy, President of Studebaker-Canada, had been sent to Japan in 1965 to discuss imports of Nissan vehicles (presumably to be badged as Studebakers), and possibly, assembly in Hamilton.
Saturn could end up being the US distribution arm of GMDaewoo, as one possibility (part-owned by GM-Holden of Australia, part-owned by SAIC of China, which is GM’s Chinese partner).
Or possibly SAIC. It would be interesting to see a SAIC built ex-Rover 75 sold as a Saturn, with turbo 1.8 K-engine or 2.5 V6, as well as the smaller cars. Except they’d be built in China… not so great for America, huh?
I’m going to guess that whatever Saturn starts selling as “new product” after the change-over (if it happens) will be sourced from a low-wage country such as China, Taiwan, or India.
Personally, I think GM should have simply culled this marque, since it has not made penny one for GM in the entire time it has existed. Except one year when they used “creative accounting” I think.
“The goal — from a product perspective — woudl be to find future vehicles that match the Saturn brand: fuel efficient, safe, reliable, and affordable.”
What, like the Astra? (2 out of 4 isn’t all that bad, I suppose.)
So, to sum up:
1. We never made money as part of GM.
2. But we’re going try to make it as a spin-off.
3. By rebadging Daewoo models that Chevy and Suzuki turn down.
Ok, then.
GM needs to give Saturn the Spring Hill plant, then authorize them to build under license exact copies of the Opel lineup, focusing on the small models like the Corsa and Astra. GM obviously doesn’t plan on integrating those models into the remaining brands, since Pontiac will lose most models, and Chevy will be sourcing all its small car designs from Korea.
Saturn could build 5 models off 1 chassis with a couple engine choices. Focus on excellent quality and top fuel economy. Just being cut free of the mothership will bring some GM haters back. Restore the Homecomings from years ago. It can be done. I see the Corsa, an Astra 3 door, 5 door, sedan, and MPV, the Vue and the Sky.
Saturn wouldn’t need much design or engineering capability, so back end costs would be low.
I think realistically what GM would like here is for Saturn to be someone else’s headache, but still be locked into buying parts, engines, and whatever else from GM. Not just for old models, but give GM a way to force their cars down someone else’s sales channel – for money.
“This is an exciting time at the Saturn Brand”???!!! She’s more delusional than Red Ink Rick.
Does this mean that the Saturn Distribution Organization is becoming like a supermarket chain or a Best Buy, or a Walmart? They won’t make or produce anything but find products to sell wherever they can.
This could be the start of a totally different way of selling cars. The manufacturers will be divorced from the dealers.
Maybe Sears or Walmart will add a few car brands. Sales agreements between an auto manufacturer and a sales outlet will be for a few months or a year at a time or change daily depending on availability and price or what is on the next ship that docks.
GM’s problems could be leading to some very interesting unintended consequences.
“This is an exciting time at the Saturn Brand”???!!! She’s more delusional than Red Ink Rick.
Exciting times doesn’t have to mean good times.
I’d say she’s correct.
The possibilities are fascinating and yes, I think very exciting. Saturn’s strength was always in its customer service model and not really as much about the car. There are plenty of models from manufacturers around the world that the US consumer could use but simply don’t have access to and Saturn could facilitate their distribution. No foreign company wants to sink the big bucks necessary to set up a US distribution network and build brand awareness so if you can hand that job to Saturn there’s a better chance to hit the ground running. Hell, for managing to sell as many Ions as they did they must be doing something right.
Seems like Fiat would be more inclined to buy Saturn instead of getting in bed with Chrysler. They are just looking for a distribution network for Fiats and Alfa Romeos anyway.
I like where folkdancer is going with this one… Saturn could be a distribution center for anyone’s car (China, India, whoever) but also sell their own “house brand” cars, IE: Opels with Saturn badges. Grocery stores already do this with those generic branded foods like Fruit Circles which is just a clone of Fruit Loops minus the fancy packaging, advertising and mascot.
It looks to me that GM is trying to slide by the state franchise laws with this approach. Certainly, at this point in time, it would make it difficult to sue GM for “dropping” Saturn because they are not actually dropping Saturn. If GM had said that they are phasing out Saturn by 2011 I think that dealers could try to sue GM NOW based on the planned closure.
Steve_S :
I’d be a lot more inclined to buy a Fiat or Alfa from a Saturn dealer than a Chrysler one.
@ Justin Berkowitz :
“I think realistically what GM would like here is for Saturn to be someone else’s headache, but still be locked into buying parts, engines, and whatever else from GM. Not just for old models, but give GM a way to force their cars down someone else’s sales channel – for money.”
I love that last line. I think the exec who thought of it presented to Rick Wagoner exacly that way. ‘Sir, what were aiming to do is to correct the minor oversight in our former plan. Now we can sell rebadged Opels – for money!’
@dwford: the Spring Hill factory now makes the Chevy Traverse; methinks that it’s now a part of the GM and not for sale.
The original plan was for the Traverse to sell 250k per year. Does anyone think it is or will meet that number – ever? I am sure production of the Traverse could be consolidated with the other Lambdas easily. Remember, Spring Hill still has an engine plant also, so it could again become a self contained operation for a small automaker. And GM established a supplier base in the area also. Everything is there for a stand alone operation.
Didn’t GM do a spin-off a few years back? What was that new company called? Delphus? Dorkus? I can’t quite remember, but it sounds vaguely familiar………
Astronomy News: To escape Krypton’s fate, Saturn to be flung out of orbit.
The Saturn dealer franchise is set up differently than the normal GM set up according to the articles on Saturnfans. It is already an independent subsidiary of GM.
This is a way to save face till 2011 and still be able to be rid of the backlog of Astras, I think.And gives the appearance of Saturn as still a going concern.
I’m not buying it and I have two Saturn in the driveway.
Spring Hill may still be salable to the proper buyer. Waggy can make anything happen. He made Fiat go away.
BTW: what’s to stop the Traverse from being built in one of the other underutilized 5000 lb “crossover” clone plants ?
The entire Lambda lineup sold 12,104 units in January, the Traverse sold only 5,215. So GM could easily consolidate all 4 into 1 250k unit plant, moving the Traverse out of Spring Hill.
Hey Saturn, I bet we can set you up with a hot date with an Italian guy name Fiat. He’s been flirting with a real loser by the name of Chrysler, but I wouldn’t hold that against him.
Poor Chrysler, she grew up in a broken home. Her adopted German father threw her out to the dogs (three-head dogs at that) a couple of years ago. She’s been out on the streets looking for any car company that would have her (GM, Nissan, etc). She’s really ruined her life. Things have gotten so bad, she had to sign up for welfare (TARP).
Fortunately, Saturn, you’re a different kind of car company, a nice, simple car company originally from Tennessee. You’re the kind of car company that a nice Italian boy can take home to his mother. Sure you did some experimentation while you were in college (minivans, CUVs, etc), but who hasn’t.
TTAC – Internet Dating for Dead Brands Walking
There shouldn’t even be four variations on the Lambda lineup and like dwford said, at the least they belong in one factory.
How much did it cost to turn Spring Hill into just-another-gm-suv factory?
So Fiat, your move. You might want to pick up the tooling from Saab as well … nah, never mind, nothing you need there.
All of Saturn’s parts and engineering are tied to GM. How do you spin that off? At least in the 1990s they were an independent company with their own design and manufacturing.
Was this plan thought out, or was it an idea that came up on lunch hour at Denny’s. Maybe Saturn’s future has been written on a napkin.
All of Saturn’s parts and engineering are tied to GM. How do you spin that off?
Simple. Saturn buys stuff from GM, and sells it at a loss. GM makes a profit by selling it to Saturn. GM might even make a profit by leasing back the Spring Hill facility to Saturn, turning a profit from the rent.
It’s a nice way of transferring GM’s losses and some of GM’s losing assets into Saturn, while inflating GM’s financial performance in the process. From an accounting standpoint, what’s not to like?
Yup, sell the Saturn dealerships to FIAT and the Buick brand to the Chinese.
Two down.
Bunter
Wasn’t the viability plan released on Feb 17th? What a difference a day (or two) makes. From the VP:
“In the interim, should Saturn retailers as a group or other investors present a plan that would allow a spin off or sale of Saturn Distribution Corporation (SDC), GM would be open to any such possibility.”
From “open to any such possibility” to “driving to such a probability” in just two days. If only GM had started moving so quickly a few years ago.
By the way, I accessed the Viability Plan on GMFactsAndFiction.com.
Just out of curiosity, anybody know which of those two categories the Viability Plan falls into?
KixStart: this went up on Saturnfans the same night as the GM viability plan announcement.Almost as soon as they ended the podcast. Remember there was an additional pod conference for the Saturn retailers scheduled for immediately after the Wag and Pony show.
@PCH101:
This is exactly what I was trying to say. Sell Saturn to someone else, but guarantee that they – not GM – gets screwed.
I was mistaken. It was not immediately after but not too long before a “reliable sources” close to the SDC & GM negotiations thread had been put up in what I thought was the same night. But then, I start work at 3 am………
There was also the disclaimer that it wasn’t an officail GM press release, but before the “Having a great time, wish you were here” letter was published.
When Saturn engineered and designed their own vehicles they were already in a way an independent car company. Now when they are about to be spun off they have no manufacturing independence at all.
I wonder where the original tooling from the SL and SCs ended up. The beam axle crap that makes up the Cobalt and defunct ION is not going to cut it.
Alone Saturn will end up like Avanti motors.
Wagoner the division killer strikes again.
“This is an exciting time at the Saturn Brand.”Kind of like how jumping out of a fourth story window is ‘exciting’…
“if successful, SDC at that point would source products from other manufacturers”
Translation: If SDC hasn’t gone down the crapper, and you dealers have somehow remained solvent, we’ll try to hook you up with Subaru, Dihatsu, Chery, Daewoo and perhaps Tata and Mahindra. But at least you won’t get Pontiac, so you’ve got that going for you.
Oh yeah, and since the name Saturn will no longer be viable, our marketing guys have created a new name and a fresh, kicky new identity for the brand.
It will be called Uranus Global Motors.
Black hole would be a better name.