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The New Economy

Penske's Saturn plan a new model for car industry

By / June 5, 2009

Race-team owner Roger Penske, shown here at an Indianapolis 500 practice last month, has a tentative deal to buy the Saturn brand from bankrupt General Motors.

AJ Mast/AP/File

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It's been done with everything from computer chips to telemarketing. Now, entrepreneur and former racer Roger Penske is going to outsource cars – with a twist.

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He hopes to commission US manufacturers to make the cars he sells.

Under a tentative deal announced Friday, Mr. Penske will buy Saturn's powerful network of dealers from General Motors and have GM – and eventually other companies – manufacture the vehicles.

It's a new model for a global car business in desperate need of an "aha!" moment. Maybe this is it.

Still different

Saturn was envisioned as "A Different Kind of Car Company" when GM built it from scratch and launched it in 1983, And it still is – not so much for its cars but for its no-haggle dealerships that have earned remarkable customer loyalty.

So why not start a car company with the customers and then find someone to build the cars?

Mr. Fix-It

It's just the kind of bold move that a turnaround artist like Mr. Penske has pulled off in the past. The Detroit Free Press notes:

Penske has made a name for himself by taking struggling companies and fixing them, such as Hertz Truck Leasing in the 1980s and Detroit Diesel Corp. in the 1990s.
In 1999, he invested $83 million into United Auto Group Inc., now called the Penske Automotive Group. The group is the second-largest auto dealer in the United States and is the sole U.S. distributor of the Smart car.

If the deal goes through, it could save more than 350 dealerships and 13,000 jobs. Penske hopes to have the cars manufactured in the US if they sell well enough.

And maybe, maybe, we can get American cars that consumers want rather than the models automakers want to build.

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