Roger Penske is pulling out of his pact to acquire the remnants of GM’s Saturn. Is it taps for Saturn? It certainly looks like it. In a previous blog I waxed poetic about what Saturn once was, stood for, meant to me personally (when we met, my husband drove a Saturn, with an ironic fuzzy dice dangling from the rear-view mirror…) Now all I can say is: Roger, what were you thinking? In buying Saturn, Penske was getting a brand and a concept, both tired and tarnished after more than a decade of degradation at the hands of GM’s former bosses. Penske, no fool, intended to revive it as a youthful, fuel-efficient car brand built on other auto makers’ spare capacity. If anyone could have pulled it off, it was the entrepreneurial Penske. Even so, it was an exceedingly long shot. Details are only now emerging but Penske’s announcement says the firm which had agreed to assume production had vetoed the plan, leaving him with no manufacturing base. That partner would appear to be Renault SA, whose interest in producing Saturns for Penske seems to have shriveled up and died. There’s one glimmer of hope for Saturn: As with GM’s Saab, which found a benefactor in Swedish super-car maker Koenigsegg in partnership with a Chinese auto maker, Saturn might find an overseas sugar daddy or mommy. Could the Chinese – who have been circling any number of sick American brands (think: Volvo, Opel, Hummer, Saab) – be on the phone to Penske even now? Stay tuned! Saturn may yet live. By the way, have a look at Saturn’s website. It proclaims: “We’re optimistic about the future.”
Auto Industry, Germany, Mergers & Acquisitions, Russia / 1 Comment
The beauty of blogging is the dialogue one has with commenters. Thank you for your thoughts. You’ve prompted me to mull the following questions, possibilities and scenarios about the developing GM/Opel story:
1) Perhaps GM’s board wants management to develop a cogent European strategy before selling Opel. Without control of Opel (and Vauxhall), GM would be mainly a U.S., Canada, Mexico, Brazil and China player. I am simplifying, but only somewhat. Europe is a mature and fairly crowded market, yes, but it’s also a solid, reliable one – and of course it’s long been an automotive trend-setter. Moreover, when eastern Europe and Russia recover from the recession, they could yet be a growth prospect for car makers.
2) Is there some sort of European alliance with, say, Nissan-Renault or another Asian (Hyundai?), European or American (Ford?) auto maker that would let GM retain a good chunk of its long-standing Opel engineering, manufacturing and marketing expertise? Has the board perhaps asked CEO Henderson and his team to explore such options?
3) Is there a Magna consortium configuration – such as including new partners and scuttling existing ones (some of the Russians, perhaps?) that would make the GM board more comfortable? Ditto RHJ – does the GM board want certain assurances from the private equity firm that it will bring the necessary operational expertise to the table?
4) Given recent economic data suggesting Europe, especially Germany and France, are poised to recover from the recession, perhaps auto market conditions – present and potential – have improved to the point where GM’s board wants to suss out sales prospects in the coming year or two before moving ahead with the Opel sale.
Happy to hear readers’ views on these and other issues I’ve not thought about.