Racing giant buys...........
06-05-2009, 06:46 AM
#1
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Racing giant buys...........
Friday, June 5, 2009
Penske, GM near deal on Saturn
Dealers would welcome sale to group headed by Detroit booster
Robert Snell / The Detroit News
A group headed by Detroit auto tycoon Roger Penske is the likely buyer of the Saturn brand and dealer network and an announcement could be made within 24 hours, The Detroit News has learned.
Negotiations between General Motors Corp. and the Penske group could continue into the weekend before a memo of understanding is reached, according to a source familiar with negotiations.
A sale would add to Penske's storied automotive career and cap a historic week for GM, which filed Chapter 11 bankruptcy Monday and announced a tentative deal Tuesday to sell its Hummer brand to Chinese-based Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. GM also is phasing out or selling its Saab and Pontiac brands.
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Penske, a billionaire Detroit booster who oversaw the city's Super Bowl XL preparation, is a racing legend whose career has ranged from building engines as owner of Detroit Diesel Corp. to obtaining exclusive U.S. distribution rights for the Smart minicar.
A sale also would free Saturn from speculation about the brand's future that dealers complain has depressed sales since GM announced it would be either sold or phased out later this year.
"We're pretty excited to get that cloud removed," said Dan Jonuska, a Saturn dealer in Scottsdale, Ariz. "The cloud can go away and park anywhere it wants but right here."
GM would not confirm that a sale is imminent, nor that Penske is the likely buyer. A Penske spokesman did not return calls seeking comment.
"Negotiations are literally going around the clock and we hope to have something to announce soon," Saturn spokesman Steve Janisse said.
It was unclear whether Saturn's leadership team, including General Manager Jill Lajdziak, would be part of the deal.
The Saturn negotiations involve pairing parties interested in Saturn's network of about 380 dealerships with one or more auto manufacturers interested in supplying vehicles that could be sold under the Saturn name.
Saturn had narrowed the list of potential bidders from about 12 to "two or three," according to a source familiar with the talks. At least one of the finalists is considering using Mitsubishi, and possibly others manufacturers, to provide vehicles, a source said.
GM hopes to conclude a deal by the end of September.
Penske has confirmed he is interested in acquiring Saturn's dealer network. Penske is the head of Bloomfield Hills-based Penske Automotive Group Inc., which operates more than 300 franchises in the United States and internationally, selling 40 brands. He has hired former Chrysler Vice Chairman and President Tom LaSorda as a consultant and could form a venture with Nissan Motor Co., the Japanese affiliate of Renault SA, according to a source familiar with talks. Penske reportedly plans on importing vehicles made in South Korea by Renault Samsung Motors and selling them through the Saturn dealership network, according to The Automotive News.
News of an imminent Penske deal was welcomed by Taylor Brown, general sales manager of Saturn of Raleigh and Saturn of Cary in North Carolina.
"Penske is synonymous with quality and value," he said Thursday. "That's what we're expecting him to bring to us."
Another finalist for Saturn was Telesto Ventures, which includes Oklahoma City-based private equity firm Black Oak Partners LLC and several Saturn dealers.
A sale would mark a new incarnation for a brand born in 1985 as a car company known for its customer-friendly approach and "no haggle" pricing. Saturn was designed as the automaker's counterpunch to Japanese compact car companies and came with a revolutionary labor agreement with the United Auto Workers. However, Saturn's signature compact cars, highlighted by the introduction of the 1991 Saturn SL1, went stale because the company failed to introduce new models, critics said.
Saturn also was hurt by GM cost-cutting and its late launch into the profitable SUV market and, while new models have won awards, sales have been underwhelming. Saturn has suffered the second steepest drop in sales among GM's brands this year, trailing only Hummer. Sales are down 57.7 percent through May compared to a year earlier.
"He's got the chops to successfully run that kind of dealer network using vehicles imported from another manufacturer," said auto analyst Aaron Bragman of IHS Global Insight. "The biggest question is, what's he going to sell?"
It will be tough to import and sell small cars from Europe or Korea, Bragman said.
"If you're talking about a fuller range of vehicles, it will still be a struggle," Bragman said. "What can a smaller independent group do with a brand that GM, with all its marketing muscle and engineering prowess and global platforms, wasn't able to do?"
GM has said it is willing to supply a Saturn buyer with vehicles on a limited contract basis.
"I can't imagine GM making Saturns for another independent business unless it retains some sort of stake in it," Bragman said. "I think the phase out would be quicker than 2011 or 2012."
The automaker filed for court protection under section 363(b) of the U.S. Bankruptcy Code. The Treasury Department plans to buy the automaker's "good assets" and provide GM with an additional $30.1 billion to operate while in bankruptcy. That would boost the government's total investment in GM to $50.5 billion.
rsnell@detnews.com (313) 222-2028
Penske, GM near deal on Saturn
Dealers would welcome sale to group headed by Detroit booster
Robert Snell / The Detroit News
A group headed by Detroit auto tycoon Roger Penske is the likely buyer of the Saturn brand and dealer network and an announcement could be made within 24 hours, The Detroit News has learned.
Negotiations between General Motors Corp. and the Penske group could continue into the weekend before a memo of understanding is reached, according to a source familiar with negotiations.
A sale would add to Penske's storied automotive career and cap a historic week for GM, which filed Chapter 11 bankruptcy Monday and announced a tentative deal Tuesday to sell its Hummer brand to Chinese-based Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. GM also is phasing out or selling its Saab and Pontiac brands.
Advertisement
Penske, a billionaire Detroit booster who oversaw the city's Super Bowl XL preparation, is a racing legend whose career has ranged from building engines as owner of Detroit Diesel Corp. to obtaining exclusive U.S. distribution rights for the Smart minicar.
A sale also would free Saturn from speculation about the brand's future that dealers complain has depressed sales since GM announced it would be either sold or phased out later this year.
"We're pretty excited to get that cloud removed," said Dan Jonuska, a Saturn dealer in Scottsdale, Ariz. "The cloud can go away and park anywhere it wants but right here."
GM would not confirm that a sale is imminent, nor that Penske is the likely buyer. A Penske spokesman did not return calls seeking comment.
"Negotiations are literally going around the clock and we hope to have something to announce soon," Saturn spokesman Steve Janisse said.
It was unclear whether Saturn's leadership team, including General Manager Jill Lajdziak, would be part of the deal.
The Saturn negotiations involve pairing parties interested in Saturn's network of about 380 dealerships with one or more auto manufacturers interested in supplying vehicles that could be sold under the Saturn name.
Saturn had narrowed the list of potential bidders from about 12 to "two or three," according to a source familiar with the talks. At least one of the finalists is considering using Mitsubishi, and possibly others manufacturers, to provide vehicles, a source said.
GM hopes to conclude a deal by the end of September.
Penske has confirmed he is interested in acquiring Saturn's dealer network. Penske is the head of Bloomfield Hills-based Penske Automotive Group Inc., which operates more than 300 franchises in the United States and internationally, selling 40 brands. He has hired former Chrysler Vice Chairman and President Tom LaSorda as a consultant and could form a venture with Nissan Motor Co., the Japanese affiliate of Renault SA, according to a source familiar with talks. Penske reportedly plans on importing vehicles made in South Korea by Renault Samsung Motors and selling them through the Saturn dealership network, according to The Automotive News.
News of an imminent Penske deal was welcomed by Taylor Brown, general sales manager of Saturn of Raleigh and Saturn of Cary in North Carolina.
"Penske is synonymous with quality and value," he said Thursday. "That's what we're expecting him to bring to us."
Another finalist for Saturn was Telesto Ventures, which includes Oklahoma City-based private equity firm Black Oak Partners LLC and several Saturn dealers.
A sale would mark a new incarnation for a brand born in 1985 as a car company known for its customer-friendly approach and "no haggle" pricing. Saturn was designed as the automaker's counterpunch to Japanese compact car companies and came with a revolutionary labor agreement with the United Auto Workers. However, Saturn's signature compact cars, highlighted by the introduction of the 1991 Saturn SL1, went stale because the company failed to introduce new models, critics said.
Saturn also was hurt by GM cost-cutting and its late launch into the profitable SUV market and, while new models have won awards, sales have been underwhelming. Saturn has suffered the second steepest drop in sales among GM's brands this year, trailing only Hummer. Sales are down 57.7 percent through May compared to a year earlier.
"He's got the chops to successfully run that kind of dealer network using vehicles imported from another manufacturer," said auto analyst Aaron Bragman of IHS Global Insight. "The biggest question is, what's he going to sell?"
It will be tough to import and sell small cars from Europe or Korea, Bragman said.
"If you're talking about a fuller range of vehicles, it will still be a struggle," Bragman said. "What can a smaller independent group do with a brand that GM, with all its marketing muscle and engineering prowess and global platforms, wasn't able to do?"
GM has said it is willing to supply a Saturn buyer with vehicles on a limited contract basis.
"I can't imagine GM making Saturns for another independent business unless it retains some sort of stake in it," Bragman said. "I think the phase out would be quicker than 2011 or 2012."
The automaker filed for court protection under section 363(b) of the U.S. Bankruptcy Code. The Treasury Department plans to buy the automaker's "good assets" and provide GM with an additional $30.1 billion to operate while in bankruptcy. That would boost the government's total investment in GM to $50.5 billion.
rsnell@detnews.com (313) 222-2028
06-05-2009, 09:51 AM
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06-05-2009, 12:04 PM
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2023 C5 of the Year Finalist - Modified
2022 C5 of the Year Finalist - Modified
St. Jude Donor '09-'10-'11
06-05-2009, 02:24 PM
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Seems to have a good track record
(no pun intended
)
(no pun intended
)Penske is no dummy. Take a look at one of his successes from 1989
http://www.nytimes.com/1989/05/25/bu...it-diesel.html
Saturn may turn out to have a brighter future than any other GM offering.
http://www.nytimes.com/1989/05/25/bu...it-diesel.html
Mr. Penske has fashioned a startling recovery at the Detroit Diesel Corporation since the Penske Corporation acquired a 60 percent stakeon Jan. 1, 1988 for an undisclosed price. The Penske stake was raised to 80 percent in July.
The diesel engine company had been losing $100 million annually as a subsidiary of the General Motors Corporation. But last year the company earned $16 million, on sales of $840 million, and it is expected to double its profits this year, with sales increasing to nearly $1 billion. Its share of the highway market, its most important market segment, has risen to 10 percent, from 3 percent.
The reign of Mr. Penske has been characterized by a passion - some Detroit Diesel workers describe it as a mania - for close personal contact with the operators of big diesel-powered trucks, boats, generators and construction equipment who buy the company's products. Since his arrival, Detroit Diesel managers have been expected to field late-night phone queries or complaints from truck fleet owners and to dispatch parts by private airplane, if necessary, to keep a truck on the road.
In the last year, Mr. Penske has invited more than 2,500 customers and vendors to tour the Detroit Diesel factory in the Detroit suburb of Redford to observe the changes and preview new products.
The diesel engine company had been losing $100 million annually as a subsidiary of the General Motors Corporation. But last year the company earned $16 million, on sales of $840 million, and it is expected to double its profits this year, with sales increasing to nearly $1 billion. Its share of the highway market, its most important market segment, has risen to 10 percent, from 3 percent.
The reign of Mr. Penske has been characterized by a passion - some Detroit Diesel workers describe it as a mania - for close personal contact with the operators of big diesel-powered trucks, boats, generators and construction equipment who buy the company's products. Since his arrival, Detroit Diesel managers have been expected to field late-night phone queries or complaints from truck fleet owners and to dispatch parts by private airplane, if necessary, to keep a truck on the road.
In the last year, Mr. Penske has invited more than 2,500 customers and vendors to tour the Detroit Diesel factory in the Detroit suburb of Redford to observe the changes and preview new products.
Saturn may turn out to have a brighter future than any other GM offering.
06-05-2009, 09:44 PM
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problem with GM is that it has been run by bean counters in a culture where car guys cannot do what they need to do to make cars people want to buy.
Penske could turn that around. very cool.
Penske could turn that around. very cool.
06-05-2009, 09:50 PM
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06-06-2009, 06:25 AM
#15
Melting Slicks
http://www.autoweek.com/article/2009...NEWS/905269995
06-06-2009, 06:35 AM
#17
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06-06-2009, 10:48 PM
#18
Melting Slicks
Not a bad deal for Penske, picks up 350 dealerships for $100,000,000 to $200,000,000 to become the largest car dealer in the US. $285,000 to $500,000 a dealership where presumably he can sell Toyotas and Hondas if he does not like the GM product to the 3,500,000 Saturn customer base or use the location to expand his prime dealerships. Unless I am mistaken this deal does not involve the manufacturing facility at all, only the distribution network. The job savings must all be on the dealership side. I hope I am wrong but that is the way I read it.
06-07-2009, 07:24 PM
#19
Safety Car
The Saturn plants will produce cars on a contract basis until The Captain gets his ship of overseas product on line. Should be producing until 2011-12 at least. 
06-07-2009, 10:10 PM
#20
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