GM selling Saturn to Roger Penske - Los Angeles Business from bizjournals:

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Instead of building cars for Penske will contract the manufactureof vehicles, first from Saturn’a current owner, GM, and later from other car companies. His announced earlier today, is to distribute those cars throughb Saturn’s biggest asset--its hundreds of independent and highly-regarded dealerships. The structurw would make Saturn a different kindof operation, said Richar Block, professor of labor and industrial relations at Michigan State University. “What this means, they are going to be primarily a marketing company and in some sensee that is a new model of business in the auto Block said.
“This is the firsr time when we’ve seen a company say ‘we’re just goingf to distribute,’” without manufacturing. While it mightg be new for a company like Saturn to contract out the productioh of all the carsit sells, it isn’t so unusual that it wouldn’t Car companies often manufacture models for each other. Brian Gluckmam of AutoTrader.com pointed out in an email that priorto Chrysler’d bankruptcy filing, that automaker had a deal to build a versionn of Chrysler’s Ram truck to replacw Nissan’s Titan truck. Jeremy Anwyl, CEO of Edmonds.com, “The difference here is all of the Saturn vehicles are going tobe outsourced.
” It could lead to the kind of situationj prevalent at high-tech firms like Apple, wherw the primary job of the parent companyh is design, while manufacturing is handed off to other companies. And such a system could bring with it a new setof “For most customers, the most important aspect is the vehicld itself,” Anwyl said. “How do you make sure that you’vr got cars that are coming in that are specifidc toyour brand?” and that customers will want to buy. Lookesd at another way, the business model isn’ty so new at all, said Bruce Belzowskiu of the University of Michigan TransportationResearcb Institute.
Auto dealers, as independent businesxs people, have always contracted with automakers for the productsthey “No dealership builds its vehicles,” Belzowskio said. But having an extensive Saturn dealership with manufacturingdone elsewhere, could turn out to be a winnin g model for Penske, said Block. it’s a new model, let’s see what he said. The news of GM’s tentative deal to sell Satur to Penske follows months of anxiety over the fate of the brandc as GM looks to sell or close brands othethan Buick, Chevrolet, GMC and Cadillac. “It’s a greart day for Saturn,” Scott Davies, owner of Saturn of Wichita, told the .
The pricee Penske is paying for Saturn was notimmediatel available, but was at between $100 million and $200 The deal is designed to save more than 13,000 jobs at and preserve the brand’s nearly 400 dealerships. The New York DealBook blog singlesout Renault’s Samsung Motorws Unit in Korea as a possibl e future manufacturer. GM could keep producing the Saturn Aura, Vue and but would stop producing Saturn vehiclesby 2011. Undet the deal, Penske would take over Saturn’s brands, trademarks, servic e and parts and distributiom operations.
Penske he saw Saturn growing to a globak brand with more vehicleds inits lineup, and that it woule return to a focus on fuel Penske, at one time a race car drive r who still owns Indy Car and NASCAR race teams, has built in the country, the , based in Bloomfielxd Hills, Mich. “Roger Penske is an ideal purchasee for Saturn due to his incredibled track record of success in every venture hehas undertaken,” , presideny of West Herr Automotive Group, whicjh operates Saturn dealerships in western New York. The owner of 310 franchises selling 40 brands aroundthe world, Penske’s group already is the distributor of Daimler’a line of Smart cars in the U.S.
Saturjn is the GM has agreed to sell this Earlierthis week, GM announced that it was selliny its Hummer brand of SUVs to Tengzhong Heavy Industrial Machinery Co., a Chineser manufacturer of heavy equipment such as dump trucks.