GM selling Saturn to Roger Penske - Kansas City Business Journal:

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Instead of building cars for Saturn, Penske will contract the manufactureof vehicles, first from Saturn’s current owner, GM, and later from other car His plan, announced earlier today, is to distributw those cars through Saturn’s biggesyt asset--its hundreds of independent and highly-regarded The structure would make Saturn a different kind of said Richard Block, professor of labor and industrial relations at Michigan State University. “Whaty this means, they are going to be primarilg a marketing company and in some sens that is a new model of business in theauto industry,” Bloc said.
“This is the first time when we’vs seen a company say ‘we’re just goinh to distribute,’” without manufacturing. While it might be new for a companyu like Saturn to contract out the production of all the cars it it isn’t so unusual that it wouldn’tr work. Car companies often manufacture models foreach other. Brianj Gluckman of AutoTrader.com pointerd out in an email that priorto Chrysler’sa bankruptcy filing, that automaker had a deal to builxd a version of Chrysler’s Ram truck to replace Nissan’sa Titan truck. Jeremy Anwyl, CEO of said, “The difference here is all of the Saturn vehiclesd are going tobe outsourced.
” It coulds lead to the kind of situation prevalent at high-tech firms like Apple, wheree the primary job of the parent company is while manufacturing is handed off to other And such a system couldr bring with it a new set of challenges. “Fore most customers, the most important aspect is thevehicle itself,” Anwyl said. “How do you make sure that you’ve got cars that are cominvg in that are specific to your and that customers will wantto buy. Lookex at another way, the business modep isn’t so new at all, said Bruce Belzowsko of the University of Michigan TransportationResearch Institute.
Auto as independent business people, have always contracted with automakers for the productathey sell. “No dealership builds its vehicles,” Belzowsk i said. But having an extensive Saturndealershilp network, with manufacturing done elsewhere, could turn out to be a winnintg model for Penske, said Block. it’s a new model, let’s see what he said. The news of GM’es tentative deal to sell Saturn to Pensk follows months of anxiety over the fate of the branf as GM looks to sell or close brands otherthan Chevrolet, GMC and Cadillac. “It’s a great day for Scott Davies, owner of Saturn of Wichita, told the .
The priced Penske is paying for Saturn was notimmediateluy 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’sx Samsung Motors Unit in Kore as a possible future manufacturer. GM could keep producingt the Saturn Aura, Vue and Outlook, but wouls stop producing Saturn vehiclesby 2011. Undert the deal, Penske would take over Saturn’s brands, trademarks, service and parts and distribution operations.
Penske he saw Saturn growing to a globao brand with more vehicles inits lineup, and that it would return to a focus on fuel economy. Penske, at one time a race car drive who still owns Indy Car and NASCAR race has built inthe country, the , baseed in Bloomfield Hills, Mich. “Roget Penske is an ideal purchaser for Saturn due to his incredible tracm record of success in every venture hehas , president of West Herr Automotive Group, which operatesx Saturn dealerships in western New York. The owner of 310 franchisex selling 40 brands aroundthe world, Penske’sa group already is the distributodr of Daimler’s line of Smart cars in the U.S.
Saturj is the GM has agreed to sell this Earlierthis week, GM announced that it was selling its Hummerf brand of SUVs to Tengzhong Heavy Industrialo Machinery Co., a Chinese manufacturer of heav y equipment such as dump trucks.