Penske-Saturn deal collapses after Renault-Nissan backs out
General Motors said today it would shut down Saturn after respected
Detroit businessman Roger Penske shocked GM and 350 Saturn dealers by
saying that his plans to buy the storied brand had fallen apart.
The announcement came a day before GM and its dealers expected the deal
to be finalized. The failure could cost as many as 13,000 jobs at
dealerships nationwide and GM.
Penske’s plans for Saturn depended on securing another manufacturer to
build future vehicles — a critical part of deal that fell apart when the
board of directors for that unidentified automaker rejected the arrangement.
That manufacturer was Renault-Nissan, a person close to the talks told
the Free Press.
"Renault has been in contact with Penske to supply cars, parts and
technology to Saturn through an OEM agreement. The conditions for an
agreement have not been found,” a Renault spokeswoman, said in a
statement. She declined further comment.
“This is very disappointing news and comes after months of hard work by
hundreds of dedicated employees and Saturn retailers who tried to make
the new Saturn a reality,” Fritz Henderson, GM chief executive officer,
The blow was especially brutal to the 350 Saturn dealers, and thousands
of their employees, who believed they had escaped the guillotine with
the arrival of Penske’s initial offer for Saturn last June.
“It’s devastating. Look what we have gone through in this town, look at
what other dealerships have gone through in this town,” said Carl
Galeana, who was one of Saturn’s original dealers and owns the metro
Detroit Saturn of Lakeside and Saturn of Warren dealerships. “This is
just another chapter of that.”
Details of deal breakdown
In a statement, Penske cited that the deal had been called off because
of concerns related “to future supply of vehicles beyond the supply
period it had negotiated with GM.”
Bloomfield Hills-based Penske said it had negotiated a deal to get
products manufactured by another company but that agreement had fallen
“That agreement was rejected by that manufacturer's board of directors,”
Penske said in a statement. “Without that agreement, the company has
determined that the risks and uncertainties related to the availability
of future products prohibit the company from moving forward with this
GM and Penske had been negotiating toward a final agreement since June
5. The terms of the original agreement called for GM to continue
providing Saturn with vehicles for two years.
At the time, Roger Penske, chairman of Penske Automotive, said they had
“been in discussions during this diligence period with a number of
manufacturers on a worldwide basis. … We would expect to have a lineup
going forward, which would be manufactured by a worldwide partner."
In early 2009, GM said it planned to wind down Saturn if a buyer could
not be found.
GM’s Henderson noted that Penske’s statement “explained that their
decision was not based on interactions with GM or Saturn retailers;
rather it was because of the inability to source new products beyond
what it had asked GM to build on contract.”
Henderson added that GM will be winding down the Saturn brand and
dealership network “in accordance with the wind-down agreements that
Saturn dealers recently signed with GM.”
Once Saturn is done, Saturn owners will be able to get their vehicles
serviced at other GM dealerships.