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Saturn: Why one of Detroit's brightest hopes failed

Penske's bid to buy Saturn from GM fell apart Thursday, ending a grand experiment in American automaking.

By Staff writer / October 1, 2009

Saturn Outlooks sit on the sales lot at the Saturn of Denver dealership in the Denver suburb of Littleton, Colo., on Thursday.

Ed Andrieski/AP

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Atlanta

Jovial employees who sang to new buyers as they walked away with the keys. Good, smaller American-made cars. Dealer satisfaction ratings through the roof. A cult following among buyers who, in the early years, made an annual pilgrimage to the company’s plant in Spring Hill, Tenn.

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General Motors's Saturn brand – touted as “a different kind of car company” – had high aspirations, borrowing the Japanese manufacturing model of team production, among other things.

But the Saturn experiment fell to earth with a final thud Thursday as a "goal-line" deal to keep the brand alive fell apart. Saturn’s latest slogan – “We’re still here” – suddenly seemed like a cruel joke as 350 dealerships are likely to close and 13,000 people face potential layoffs.

True, Saturn made money in only one of its 20 years of car production. But in the end, it was internal resistance to the funky start-up and its pioneer attitude that felled it.

In other words, the very qualities that Cornell labor expert Harry Katz, in his book “Shifting Gears," predicted could transform Detroit’s ingrained big-car culture, doomed one of its brightest prospects, say experts.

“It’s criminal negligence. They got attacked internally, constantly, until today they were finally destroyed,” says Sean McAlinden, chief economist at the Center for Automotive Research in Ann Arbor, Mich. “How do you take something that was such a good idea and wreck it deliberately?”

The decision Thursday by the Penske Automotive Group to back out of a deal to keep Saturn going will cost GM as much as $500 million in unexpected costs. “It’s a pretty good bump in the road for the new GM company. It’s not fatal, but this sort of thing has to end," he says.

The Saturn story

Saturn was supposed to be different, and it was.

Created in 1985, the Saturn brand – launched with iconic commercials showing hordes of buyers in the Tennessee hills – represented a rare piece of forward thinking in traditional Detroit. But The Wall Street Journal chided the project for being too ambitious, requiring not just a new car, but a new plant, new dealers, and a new workforce.