GM Bankruptcy Saturn Sale Dealer Closings

The Roller Coaster Ride

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Okay...deep breath...has the auto industry ever been more dynamic AND chaotic?

As I type this, word is coming across the myriad of news services that I subscribe to that the Penske Group is indeed going to purchase the beleaguered Saturn Division from GM. As a person who has interviewed and worked with Saturn's General Manager Jill Lajdziak in the past, I could not be happier for her or her team. It shocked me that GM could put so much effort into this brand in the early '90s, let it wither on the vine, and then re-energize it again over the last year or two with the Vue, Outlook, Sky and Aura. It did not make sense to me that the value of this division (product, brand equity and dealer network) could be considered 'zero' and allowed to die like Pontiac. Thankfully, it looks like Mr. Roger Penske and I think alike. But it is a shame that our bank accounts look so different!

Staying on the GM front, its announced bankruptcy continues to make waves across our industrial landscape and economy. My sense is that while the Chapter 11 announcement seemed dire and a bit overwhelming (especially from an historical perspective and to those directly impacted with job or investment losses), it will be minor compared to what would happen if GM or Chrysler went into full Chapter 7 liquidation. The impact would be immediate and felt by every manufacturer in the U.S....Toyota, Ford, BMW, and so on. The supplier carnage would be huge, and so would be the additions to the unemployment lines.

The dealer closure issue is getting a lot of press, but I think it is worthwhile to note that GM was selling fewer vehicles out of over 5,500 dealers compared to Toyota with just 1,200 dealers. Both GM and Chrysler (and Ford) were set up for dealer coverage relevant to much higher market shares that will probably never return.

My vision three years ago of a European-type market taking shape in the U.S. with intense competition among fewer brands seems to be coming clearer every day. Did you see that the Indian car company Tata wants to bring the $2,500 Nano to our shores in 2012?

Posted on 2009-06-05 | Permalink | |

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