Penske buys Saturn!

[zenMachine]

June 5 (Bloomberg) -- Penske Automotive Group Inc., an operator of car dealerships in the U.S. and U.K., won the bidding for General Motors Corp.’s Saturn unit as the biggest domestic automaker sheds assets in bankruptcy.

The sale should close next quarter, Penske Auto Chief Executive Officer Roger Penske said in a conference call today, without giving the terms. The price will be in a range of $100 million to $200 million, said a person familiar with the talks, who declined to be identified because the deal isn’t complete.

Unloading Saturn is a step toward GM’s goal of disposing of four of its eight U.S. brands while reorganizing in Chapter 11. Bloomfield Hills, Michigan-based Penske Auto will add Saturn as a wholly owned unit and must find a supplier of new vehicles.

“We would expect to have a lineup manufactured by a worldwide partner,” Roger Penske said. “We have not made a transaction with any other manufacturer at this point. The ultimate goal would be to have those vehicles built in the U.S.”

Penske Auto to Buy Saturn Brand as GM Shrinks in Bankruptcy - Bloomberg.com

[Danny]

I really liked the idea of Saturn becoming an alt-fuel car distributor. It should be interesting to see what Penske does with it. Maybe all of the Penske trucks will be made out of plastic in the future.

[PriusLewis]

Originally Posted by zenMachine

June 5 (Bloomberg) -- Penske Automotive Group Inc., an operator of car dealerships in the U.S. and U.K., won the bidding for General Motors Corp.’s Saturn unit as the biggest domestic automaker sheds assets in bankruptcy.

The sale should close next quarter, Penske Auto Chief Executive Officer Roger Penske said in a conference call today, without giving the terms. The price will be in a range of $100 million to $200 million, said a person familiar with the talks, who declined to be identified because the deal isn’t complete.

Unloading Saturn is a step toward GM’s goal of disposing of four of its eight U.S. brands while reorganizing in Chapter 11. Bloomfield Hills, Michigan-based Penske Auto will add Saturn as a wholly owned unit and must find a supplier of new vehicles.

“We would expect to have a lineup manufactured by a worldwide partner,” Roger Penske said. “We have not made a transaction with any other manufacturer at this point. The ultimate goal would be to have those vehicles built in the U.S.”

Penske Auto to Buy Saturn Brand as GM Shrinks in Bankruptcy - Bloomberg.com

If that price includes current factories, tooling, inventory and dealer agreements, it was a STEAL. You couldn't begin to set up a major auto manufacturing plant for that kind of money. Delorean went through about $250M in 1981 (about $550M today adjusted for inflation) and he failed (possibly through mimanagement more than funding, but still...).

[zenMachine]

Penske got themselves a pretty good deal. I wish them the best with this. Let's hope they can turn Saturn around.

I've always preferred Penske to U-Haul. Their trucks are much nicer and more comfortable for long hauling.

[micheal]

I'm curious how Penske is going to do with this buy. I plan on using Penske to move in a couple of months and was real suprised by how many people online recommended them over u-haul.

It is a good thing to keep the jobs going, and hopefully get rid of the commercials with the atrocious green shirt !

[justlurkin]

Originally Posted by PriusLewis

If that price includes current factories, tooling, inventory and dealer agreements, it was a STEAL. You couldn't begin to set up a major auto manufacturing plant for that kind of money. Delorean went through about $250M in 1981 (about $550M today adjusted for inflation) and he failed (possibly through mimanagement more than funding, but still...).

Most likely the deal is only for the brand (existing inventory and dealer agreements only)... Penske had stated they will contract GM to build Saturns for the next few years while they look for another carmaker to supply it with cars they can badge and sell as Saturns, which means Penske will not be building any cars... Which means they won't be buying any factories or tooling from GM.

This reminds me of how computer companies like Dell, Gateway and HP operate... They don't actually build their laptops, but they all contract some Taiwanese or Chinese Original Design Manufacturer outfit like Quanta or Compal to build their laptops. I wonder if this business model can work for cars.

[Ogo]

This business model does not work entirely for computer makers, too. You can see Dell and Gateway loosing market share big time. IBM even sold off its PC business to China.
In my opinion, if you at least do not have strong grip on research, development and technology, you will loose the business on the long run. Those guys in China making your goods will take over sooner than later. With cars, they will learn how to make them and then you can kiss your technological knowledge bye bye. Computer makers can avert things partially through own software and strong branding like Apple does. But on longer run, it is a loosing battle. And in car business it will be worse, much worse.

[PriusLewis]

Originally Posted by justlurkin

Most likely the deal is only for the brand (existing inventory and dealer agreements only)... Penske had stated they will contract GM to build Saturns for the next few years while they look for another carmaker to supply it with cars they can badge and sell as Saturns, which means Penske will not be building any cars.

I heard from a friend that GM was closing the Solstice plant already (it builds the Pontiac Solstice and the Opel GT for Opel AG in Germany). Some of the existing Saturns are also Opel. So Roger can contract with Opel, for example, to continue to build Saturns. In the long run we almost have to expect the Chinese or Indians to be building cars sold here - why not under the Saturn brand? It would give them an existing dealer organization and brand recognition. It's working for Schwinn right now.