GM in Saturn deal with group
Detroit, June 6, 2009
General Motors (GM) has reached a preliminary agreement to sell its Saturn brand to Penske Automotive Group in a deal that could preserve more than 350 dealerships and 13,000 jobs, the companies said yesterday.
The tentative deal for Saturn, which the companies hope to complete in the third quarter, would be the second sale of a brand announced by GM since it filed for bankruptcy on Monday in an effort to drop unprofitable lines and leave court protection as a leaner company, said a report in our sister publication, the Gulf Daily News.
Penske, the No 2 US automotive dealership group, would acquire rights to the Saturn brand and other assets, while bankrupt GM would continue production of the Saturn Aura, Vue and Outlook on a contract basis if the transaction were completed, GM and Penske said. Terms were not disclosed.
"This is a day that we have all been hoping would come together, since probably the end of November when GM made its first viability plan," said Todd Ingersoll, a Saturn dealer from Connecticut and a member of the Saturn dealer steering group.
GM created Saturn in 1984 to compete with Japanese vehicles in terms of quality and service and initiated no-haggle flat-price sales for its models. The Saturn brand has languished for the last decade, and GM said in February that it would either be spun off or shut.
GM had said that more than a dozen buyers had expressed interest in the Saturn brand and its retail network. Penske had also said it was interested in the Saturn brand in early last month.
GM plans to narrow its focus to the Chevrolet, Buick, GMC and Cadillac brands and trim its dealership network.
Meanwhile, little-known Chinese machinery maker Tengzhong Heavy Industrial Machinery Company's plan to buy the Hummer brand from General Motors could face objections from Chinese regulators, it was reported yesterday.
The deal, expected to be closed by the end of the third quarter, will need nods from several government agencies, including the Ministry of Commerce and the National Development and Reform Commission, a powerful economic planner.
There are also concerns over whether Tengzhong is capable of funding the deal to help revive sales of the petrol-guzzling sports utility vehicle, against Beijing's policy to encourage fuel-efficient vehicles. – TradeArabia News Service