Report: GM Bankruptcy Zips Along with Sale of Saturn
June 7, 2009
Two brands effectively sold in less than a week — that’s the impressive progress General Motors, under government guidance, has made. After news that Hummer was sold to a Chinese buyer early this week, news has now broke that the bankrupt GM had reached an agreement with dealership operator Penske Automotive Group (PAG) to sell it the troubled Saturn brand.
The Penkse Group has a powerful automotive pedigree, being the creation of Roger Penske, a racing legend. Penske owns NASCAR and IndyCar racing teams in addition to PAG’s substantial network of dealerships and repair centers. PAG, among other things, is the sole U.S. importer of the popular Smart Cars.
The deal would see PAG acquiring and safeguarding Saturn’s 400 dealerships and 13,000 jobs. While PAG will own rights to developing new vehicles under the Saturn brand name, GM will retain the rights to the Saturn Aura, Vue, and Outlook. It is possible that these vehicles will be rebranded.
The Saturn brand has been around since 1990 when its first line was created. It was founded with a no-haggle policy, an unusual trait in the industry which earned it consistently high customer satisfaction ratings. Over 4 million Saturn vehicles have sold in the last 19 years.
With the sale, GM’s only remaining outstanding U.S. asset will be the Pontiac brand, which it also looks to sell. GM reportedly is close to terms on the sale of two of its European brands — Vauxhall (British) and Opel Motors (German), with Magna (Candian) and Fiat (Italian) leading contenders. It is still looking to find a buyer for the Saab European brand, as well.
GM had proposed selling all these brands for a couple months, but bankruptcy and government guidance appears to have given it the momentum and ability to finally start to offload them. Once these sales and reorganization/production adjustments are complete, GM will exit bankruptcy, and be owned primarily by the U.S. government, with bondholders, the Canadian government, and the United Auto Workers union holding minor stakes.
This post has been written by Jason Mick on June 6, 2009 1:56 PM couresy of dailytech.com.