Saturn Has Never Made Money?

I was listening to a business editor on a local television station this evening. He made the remark that the rumors about GM killing the Saturn line
were not true. Although he said that Saturn has "never" made money the entire time it's been in existence, GM will be pumping 3-billion (I'm sure I heard billion) dollars more into Saturn to develop a new SUV, mini-van and sports car in the hopes to finally turn the car line around. I wonder what the $$$-loss threshold will be before Saturn goes by the way of Oldsmobile. I can't see sports car enthusiasts looking seriously at Saturn. But there may be a few moms out there looking for cheap "mom-mobiles". I guess we'll see!
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Yes, that is what Saturn is saying.

Lots more money than what they killed Old's over.

GM made the mistake in the past of trying to push econobox junk through their other brands. This destroyed Olds, failed miserably in Cadillac, and impacted pricing in the Chevy brand.
With events of 9/11 and the recent resurgence of interest in econobox gassaver small cars, GM isn't going to make that mistake again. So they are going to refocus Saturn into the lowball econobox/minivan/toy SUV market.
It is also a mistake to assume that just because Saturn isn't profitable that it doesen't make money for GM. Saturn is responsible for a good chunk of the GMAC profits and the divisions of Chevy Buick Saturn, etc. are more for accounting purposes to obtain favorable tax rates, and to limit payments out to investors. GM overall is profitable, and lots of parts are shared across all car divisions, thus giving GM great buying power.
Ted
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Not so, I own a large block of GM stock and I can assure you the Saturn division has earned a profit, after the cost of starting up a completely new and SEPARATE division for GM. The purpose of building Saturn as a completely separate division was to determine if small, low cost, low profit vehicles could be built and sold exclusively in the US at a profit. GM's economies of scale made it impossible to determine the exact base cost of building a small car. Now that the real cost is known, the Saturn Division will be assimilated into GM. Several vehicles will be built off other division chassis for Saturn and vis versa as well as in other GM plants over the years. You would be surprised to know how little more it costs to build a larger more fully equipped vehicle than a small vehicle. Vehicles are sold in different markets at vastly different prices that have nothing to do with the cost of building and equipping the vehicle for that market. That is why manufactures can sell the same basic cars in dozens of different countries at dozens of different prices. When the US manufactures switched over to comparably smaller FWD vehicles, to compete in the gas crunch in the late seventies, it was the extra profit on the large cars that made it possible to sell smaller cars to meet the new CAFE standards. I worked as an automotive design engineer at that time. All three US manufacture that were building FWD vehicles, that cost more to build than the larger RWD vehicles they were replacing, were actually selling their small cars to their dealers at less than cost so they could continue to sell the less fuel efficient larger cars that supplemented to cost of building the smaller cars needed to meet the CAFE number. I was not until the mid eighties that the small FWD cars began to be profitable within the economies of scale.
mike hunt
"James C. Reeves" wrote:

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Interesting...thanks.
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On Mon, 18 Oct 2004 19:03:27 -0400, "James C. Reeves"

Funny how new Saturn dealerships keep popping up. Must be a lot of people who like to lose money.
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snipped-for-privacy@ihatespam.net (SgtSilicon) wrote in wrote:

If GM is not making money on Saturn, that doesn't mean the dealerships aren't. I owned a '98 SL1 that was one of the smoothest, most dependable cars I've ever owned and had tons of personality. My uncle drove my Saturn and traded in his Corolla on one. GM should have rebadged the S series, tweaked the sheetmetal, and made it the new Cavalier/Sunfire back in the early 90's. The Saturn S series was superior to the Cavalier/Sunfire. They would have sold millions of them. But I guess the S series cost more to manufacture than the Cavalier/Sunfire.
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Maybe GM uses the projected vs the real to figure their profits. That is, they project 2 billion dollars in profit for 2004 but only make 1.5 billion dollars so they declare a half-billion dollar loss instead of a 1.5 billion dollar profit. I've heard that some large corporations do this (I wish I could).
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I believe you are confusing what corporations can legally do with how the Democrat party views the federal governments annual budget. They consider a 4% annual increase in spending as normal. If the Congress actually raises spending by only 3% the Democrats call that a 'cut' in spending. If there is not increase that is refereed to a 'gutting' the program or 'slashing' spending on the program LOL
mike hunt
Rich B wrote:

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On Wed, 20 Oct 2004 17:33:50 -0400, snipped-for-privacy@webtv.net (Rich B) wrote:

The GM plant I work in does their budget that way.
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Yeah, it pretty much does. You can have ups and downs but over time, it pretty much means that.
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snipped-for-privacy@ihatespam.net (SgtSilicon) wrote in wrote:

Yeah, but the dealerships and the car manuafacturer itself are owned by different entities. Are Saturn dealerships owned by Saturn itself? As far as the the other makes, most of the dealerships are privately owned, so just because the manufacturer may be losing money doesn't necessarily mean the dealers are also. The dealerships simply sell the cars at a markup and the difference minus expenses is their profit. Pluus the owner of the dealership usually draws a large salary, so at the end of the month if there's no money left, the owner may still have made $10,000 or so.
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