Saturn, Hummer on auction, or chopping, block

Allison Linn Senior writer • Profile • E-mail

Whether or not General Motors files for bankruptcy protection, the carmaker has made clear that its future plans do not include two brands — Saturn and Hummer — that once seemed to hold immense promise for the company.

GM has said it will decide this year whether to sell or discontinue both brands as part of the stringent cost-cutting measures aimed at trying to restore the ailing company’s financial stability. The overall effort also has created an uncertain future for two other GM divisions, Saab and Opel.

Even with such efforts, however, many believe the company will be forced to file for bankruptcy protection, perhaps as soon as Monday.

GM spokesman John M. McDonald said this week the automaker has identified parties interested in purchasing Saturn and Hummer, but he would not provide specifics on who might be interested or when any deals might be reached.

“Obviously our interest is to have these brands find a home outside of GM and to continue as a business that can grow and flourish,” McDonald said. “At the same time, I don’t think there’s any illusion: We need to restructure GM, and as we restructure GM there’s no room for those brands.”

The troubles facing the Saturn and Hummer brands are in many ways indicative of the underlying problems that have pushed GM to this point.

Different kind of car
When GM announced plans to launch the Saturn line in 1983, it promised to be different from typical U.S. brands in every way, from its nimble assembly line operation to its no-hassle showroom floor. A major focus was on customer service, including a pledge that buyers would not have to haggle on price.

The company’s early efforts paid off.

“They came out with one vehicle — average vehicle, average price, average quality," but still found success against their Japanese competitors practically overnight, said Robert M. Wiseman, a professor at Michigan State University’s Eli Broad College of Business.

Wieck/gm / AP Saturn's new Aura has been well-received but came too late to save the brand for GM.

Still, after a strong start, things went downhill for Saturn, Wiseman said. He faults GM for not investing enough in Saturn’s next generation of vehicles, leaving the company without a strong enough product line to bring its initial customers back again.

As time went on, the Saturn brand also became more enmeshed in GM’s general operations, borrowing design elements from sibling brands and gradually mixing production facilities, experts say. The result has been cars that are too similar to other GM nameplates and do little to excite the customer, some industry analysts say.

“They lost their way a long time ago,” said George Magliano, IHS Global Insight’s director of automotive industry research for North America.

Still, Magliano said that more recently Saturn has seemed to find its footing again with promising new models such as the Aura and the Astra. But the improvements may have come too late.

“The issue, more than anything else, is the Saturn brand has sort of lost its luster,” Magliano said. 

While GM's overall sales have fallen sharply in this recession, sales of its Saturn and Hummer vehicles have fared even worse.

For the first three months of 2009, global sales of General Motors vehicles fell 28 percent to 1.6 million vehicles, according to the company. During the same period Hummer sales fell 62 percent to 5,013 vehicles, while Saturn sales fell 57 percent to 22,294 vehicles.

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