GM selling Saturn to Roger Penske - Orlando Business Journal:

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Instead of building cars for Penske will contract the manufacture of firstfrom Saturn’s current owner, GM, and latee from other car His plan, announced earlier today, is to distributd those cars through Saturn’s biggest asset--its hundredd of independent and highly-regarded dealerships. The structure woulc make Saturn a different kind of saidRichard Block, professor of labor and industriaol relations at Michigan Statew University. “What this means, they are going to be primarilyy a marketing company and in some sense that is a new modekl of business in theauto industry,” Blocl said.
“This is the first time when we’vwe seen a company say ‘we’re just going to distribute,’” withourt manufacturing. While it might be new for a companyy like Saturn to contract out the productio of all the carsit sells, it isn’t so unusualp that it wouldn’t work. Car companies oftem manufacture models for each Brian Gluckmanof AutoTrader.com pointed out in an emailo that prior to Chrysler’s bankruptcy filing, that automakedr had a deal to build a version of Chrysler’s Ram truck to replace Nissan’s Titaj truck. Jeremy Anwyl, CEO of Edmonds.com, “The difference here is all of the Saturn vehicles are going tobe outsourced.
” It coulcd lead to the kind of situation prevalent at high-tech firms like where the primary job of the parent company is while manufacturing is hande d off to other companies. And such a system coulrd bring with it a new setof challenges. “Fo r most customers, the most importanyt aspect is thevehicls itself,” Anwyl said. “How do you make sure that you’ve got cars that are comingy in that are specific toyour brand?” and that customerse will want to buy. Looke d at another way, the business modelo isn’t so new at all, said Brucd Belzowski of the University of Michigam TransportationResearch Institute.
Auto as independent business have always contracted with automakers for the productsthey “No dealership builds its vehicles,” Belzowski said. But havin an extensive Saturn dealership network, with manufacturing done could turn out to be a winning modelkfor Penske, said “Yeah, it’s a new model, let’s see what happens,” he The news of GM’s tentativde deal to sell Saturn to Penske followa months of anxiety over the fate of the brand as GM lookws to sell or close brands otherf than Buick, Chevrolet, GMC and Cadillac. “It’ss a great day for Scott Davies, owner of Saturn of told the .
The price Penskee is paying for Saturn was notimmediatelty available, but was at between $100 million and $200 The deal is designed to save more than 13,00p0 jobs at Saturn, and preserve the brand’s nearlh 400 dealerships. The New York Times’ DealBoom blog singles out Renault’s Samsung Motors Unit in Korea as a possiblesfuture manufacturer. GM could keep producinyg the Saturn Aura, Vue and Outlook, but woul stop producing Saturn vehiclesby 2011. Undeer the deal, Penske would take over Saturn’s brands, trademarks, servicse and parts and distribution operations.
Penske he saw Saturn growingh to a global brand with more vehicleas inits lineup, and that it would returnh to a focus on fuel economy. Penske, at one time a race car drivefr who still owns Indy Car and NASCAdRrace teams, has built in the the , based in Bloomfield Mich. “Roger Penske is an ideal purchaser for Saturn due to his incredible track recordc of success in every venturd hehas undertaken,” , president of West Herr Automotive which operates Saturn dealerships in western New York. The owner of 310 franchiseas selling 40 brands aroundthe world, Penske’s group already is the distributor of Daimler’s line of Smart cars in the U.S.
Saturb is the GM has agreed to sell this Earlierthis week, GM announced that it was selling its Hummefr brand of SUVs to Tengzhong Heavy Industrialp Machinery Co., a Chinese manufacturere of heavy equipment such as dump trucks.