Penske signed a memorandum of understanding that would give his dealership chain, Penske Automotive Group, Saturn’s 350 dealerships, the companies said. Penske expects to offer all the dealers new franchise agreements and will retain all 13,000 Saturn employees for now, he said.
“I would expect that the model that we’re putting together, the distribution model, will be profitable day one,“ Penske said in an interview with The Associated Press. “We’ll have less costs. We’ll not be in the manufacturing side.“
Neither Penske nor GM would say how much Penske is paying for the brand. Penske said he expects the deal to close in the third quarter. Initially, GM will continue to produce on a contract basis the Saturn Aura sedan as well as the Vue and Outlook SUVs. But Penske said he is in talks with global car manufacturers about building Saturn cars in the future.
The sale marks a new chapter for Saturn, which GM had been trying to sell since earlier this year as part of its turnaround plan.
“Saturn was kind of an unpolished gem at GM,“ said Brad Coulter, director at the Bloomfield Hills, Mich., turnaround firm O’Keefe and Associates. “They had never really fully exploited what they developed. Saturn is known for having some of the best-run dealerships. The brand is highly rated. It’s a top-notch sales organization.“
The Saturn Sky roadster is built in Wilmington, Del., but that plant is scheduled to close in July and the model will be discontinued.
Foreign automakers would be key to making Saturn succeed, but they will have to match GM’s quality standards before Saturn’s dealer network will distribute their products, Penske said in an interview.
Bloomfield Hills-based Penske Automotive Group Inc. owns the second-largest U.S. automobile retail chain by sales and consistently scores high in customer satisfaction surveys. The company also has race teams in the IndyCar, NASCAR and Grand-Am series.
Detroit-based GM, which filed for bankruptcy court protection Monday, has said it plans to shed its Saturn, Hummer, Pontiac and Saab brands. Earlier this week, GM said it found a buyer for Hummer in China’s Sichuan Tengzhong Heavy Industrial Machinery Co.
However, any such deal would require Chinese Commerce Ministry approval, and reports in state-run newspapers Friday said Sichuan Tengzhong had not yet obtained the OK.