Sale of Saturn likely to end its American-made image

Washington Post

General Motor’s sale of Saturn could put an end to the brand’s American-made image.

A few potential buyers are considering tapping Saturn’s strong dealer network to distribute vehicles made by foreign manufacturers into the United States. Such a move would transform a brand that was designed to reinvent how Americans built and sold cars.

And it could add to concerns about American auto jobs’ shifting overseas. Already the United Auto Workers and some lawmakers have protested GM’s plan to import more cars built in such low-wage countries as Mexico, China and South Korea.

This week, GM sent the sale’s term sheets to about 12 interested parties. The automaker has hired Stephen Girsky, a former Wall Street auto analyst and GM adviser, to review bids.

GM is committed to providing Saturn with cars through 2011, the end of its model life cycle. After that, it’s up to a new owner to supply its 380 Saturn dealerships with cars. The dealer network is a brand strength. A Saturn dealer, not individual showrooms, controls a regional market, ensuring that neighbors won’t undercut one another on prices because they share an owner.

One prospective bidder, Telesto Ventures, said it is talking to multiple foreign manufacturers about importing vehicles. Telesto, whose investors include private-equity firm Black Oak Partners, intends to turn dealerships into broader retailers that sell a number of fuel- efficient vehicles, not just one brand.

Thomas A. Kochan, an MIT professor who wrote a book about Saturn, said a foreign partnership faces tall hurdles.

“They’re kidding themselves if they think dealers themselves can sustain the brand,” he said. “This was a tightly integrated model. People related to Saturn because of the aura of the company as an American company.”