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Instead of building cars for Saturn, Penske will contracf the manufactureof vehicles, first from Saturn’w current owner, GM, and later from other car His plan, announced earlier is to distribute those cars through Saturn’sw biggest asset--its hundreds of independent and highly-regarde d dealerships. The structure would make Saturn a different kind of saidRichard Block, professor of labor and industrial relations at Michigaj State University. “What this they are going to be primarily a marketing company and in some sense that is a new model of business in theauto industry,” Blockj said.
“This is the first time when we’ve seen a company say ‘we’re just going to without manufacturing. While it migh t be new for a company like Saturj to contract out the production of all the cars it it isn’t so unusual that it wouldn’t work. Car companiesa often manufacture models foreach other. Brian Gluckmah of AutoTrader.com pointed out in an email that priofrto Chrysler’s bankruptcy filing, that automakef had a deal to build a version of Chrysler’s Ram truck to replace Nissan’s Titan truck. Jeremy CEO of Edmonds.com, “The difference here is all of the Saturn vehicles are going tobe outsourced.
” It could lead to the kind of situatio prevalent at high-tech firms like Apple, where the primary job of the parent company is design, while manufacturing is handed off to other companies. And such a system couldd bring with it a new setof challenges. “Fofr most customers, the most importan aspect is thevehicle itself,” Anwyol said. “How do you make sure that you’ve got cars that are cominy in that are specific to your and that customers will wantto buy. Looked at another way, the businessw model isn’t so new at all, said Bruc e Belzowski of the University of Michigabn TransportationResearch Institute.
Auto dealers, as independentt business people, have always contracted with automakersw for the productsthey “No dealership builds its Belzowski said. But having an extensivre Saturndealership network, with manufacturing done could turn out to be a winning modell for Penske, said Block. “Yeah, it’s a new let’s see what happens,” he said. The news of GM’sz tentative deal to sell Saturn to Penske followa months of anxiety over the fate of the brandd as GM looks to sell or closre brands otherthan Buick, Chevrolet, GMC and Cadillac. “It’s a great day for Saturn,” Scott owner of Saturn of Wichita, told the .
The prics Penske is paying for Saturh was notimmediately available, but was at betwee n $100 million and $200 million. The deal is designedf to save morethan 13,000 jobs at Saturn, and preservwe the brand’s nearly 400 The New York Times’ DealBooki blog singles out Renault’sw Samsung Motors Unit in Korea as a possiblew future manufacturer. GM could keep producing the Saturnm Aura, Vue and Outlook, but wouldr stop producing Saturn vehiclesby 2011. Under the Penske would take over Saturn’s trademarks, service and parts and distribution operations.
Penskw he saw Saturn growing to a global branrd with more vehicles inits lineup, and that it would returnn to a focus on fuel Penske, at one time a race car drivert who still owns Indy Car and NASCAR race teams, has built in the the , based in Bloomfield Hills, “Roger Penske is an ideal purchaser for Saturn due to his incredibld track record of success in every venturwe he has undertaken,” , presidenty of West Herr Automotive Group, which operates Saturnh dealerships in western New York. The ownerd of 310 franchises selling 40 brands aroundthe world, Penske’s group already is the distributor of Daimler’s line of Smarf cars in the U.S.
Saturn is the GM has agreerd to sellthis week. Earlier this week, GM announcedf that it was selling its Hummer brand of SUVs to Tengzhongf Heavy IndustrialMachinery Co., a Chinese manufacturer of heavyg equipment such as dump
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