Saturn was General Motors' Dream Car in 1990s

Now with Only 1% Market Share, It’s Just Part of the GM Nightmare

Dec 5, 2008 Carroll Trosclair

Saturn has faded into the General Motors system and has lost much of its image and individuality as the ideal vehicle and organization GM once intended to be.

General Motors’ desperate plea for Congressional assistance in 2008 turned a harsh spotlight on the plight of its Saturn brand, which was once looked upon as the new kid that would save America’s largest automaker. The Senate and House hearings identified Saturn as a major financial problem and one that GM would somehow have to eject from the family.

"They have to sell Saturn," Kevin Tynan, senior auto analyst at Argus Research, told CBS News.

But getting rid of a major brand like Saturn would be much more difficult and expensive than GM’s shuttering of the Oldsmobile line four years earlier, according to Rebecca Lindland of Global Insight, another research firm. She said it cost "billions and billions of dollars to shut down Oldsmobile. And that was a pretty small brand."

Damaged Brands

Tynan called the Saturn vehicles "damaged brands" and said they might even be tough to sell to Chinese and Indian automakers who have indicated an interest in entering the American auto market. "It's certainly a buyer's market. But there's no credit to be had," he said.

The irony is that the Saturn brand was visualized to help General Motors to pull itself out of another financial mess back in the 1980s. According to Hoover’s Profile and other auto industry sources, foreign small cars were cutting into American markets and American automakers were experiencing severe image problems stemming from their manufacturing, servicing and marketing practices.

GM set out in 1982 to cure all these problems by launching a new subsidiary, a new vehicle and a new automaking and marketing culture. Saturn was not only going to be the world-class small vehicle, but it would also be the catalyst for improving other General Motors vehicles and operations.

If it was going to take more time than anyone expected to do all this, so be it. The first Saturn was driven off the production line in July 1990, eight years after it became a gleam in the GM eye.

Spring Hill, Tennessee

Awards and praise for the vehicle flowed in for years. Costs kept rising but sales lagged behind expectations for a variety of reasons, including slow production at the headquarters plant in Spring Hill, Tennessee, near Nashville. Saturn sold 300,000 vehicles in 1993, but dropped back to 180,000 the next year.

It sold 214,000 in 2005, 226,000 in 2006, 240,000 in 2006 and was projected to sell about 200,000 in 2008, which would bring it back to its 1992 level. In the early 1990s, it was projected that GM had to sell 300,000 Saturns to break even on that brand, but that would not come close to recouping the startup costs dating back to 1982.

By 2008, Saturn was no longer a one model, small car producer, but had expanded into several models and had moved from Tennessee into other GM plants.

No Haggling Sales Staff

About the only thing that remained the same was the no-haggling sales staff, which has lost some of its consumer appeal in a tough economy.

In May 2008, Jerry Flint wrote in Forbes that Saturn had gradually been "stripped of everything that made it unique, its independent operations, its separate Tennessee headquarters, its own factory and its separate union contract.

He added that Saturn had become "just another GM marketing unit" at a time when it was not appealing or profitable to be such a unit.

Upset Saturn Dealers

The uncertainty and the frequent rumors about GM planning to shut down or sell Saturn upset at least some Saturn dealers, some of whom expressed their unhappiness publicly.

They waited for answers, just as the three big American automakers waited for help from Congress.

References:

• GM's Failed Saturn Brand Goes On The Block, Anthony Mason, CBS News, Dec. 4, 2008
• Saturn.com, Dec. 4, 2008
• Why No Blastoff, Jerry Flint, Forbes, May 20, 2008
• Hoover’s Profile, Saturn
• Saturn Corporation, Answers.com, Dec. 4, 2008

The copyright of the article Saturn was General Motors' Dream Car in 1990s in Business Profiles is owned by Carroll Trosclair. Permission to republish Saturn was General Motors' Dream Car in 1990s in print or online must be granted by the author in writing.

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Dec 12, 2008 11:25 AM

Guest :

I had a bad experience with a GM car (OLDS) in the '80's, and said I'd never buy another. However, in 1994, my wife and I were so impressed wtih the "new kind of car company" that we bought two, which we still have. In 2004, we added a VUE to our collection. Now the Saturns are just another GM line, manufacturing is done overseas, and if I have to buy another car, I'll look for a pre-2007.

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