Penske close to closing deal on Saturn
09-28-2009, 06:14 AM
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Penske close to closing deal on Saturn
Saturn dealers nationwide have received new sales and service agreements from Roger Penske, a sign the auto icon is close to finalizing a deal for the castoff General Motors Co. brand.
The two-year agreements, which are subject to completion of a deal for Saturn, were sent to about 340 U.S. dealers, who had until Sept. 11 to sign and return them. The agreements have one-year automatic renewals if dealers meet certain conditions.
The pending sale has been hailed by dealers who are looking for Penske to bring stability to the brand and stop an erosion of vehicle sales that has accelerated since GM said it would shed Saturn along with Hummer, Saab and Pontiac as part of a massive restructuring. This year, Saturn sales are down 59.2 percent, the second-greatest decline among GM brands behind Hummer, which is down 61.5 percent.
“We can’t wait for this thing to get done,” said Stuart Lasser, who owns three Saturn outlets in New Jersey. “We have to get on with our lives, we have to move on; the franchise has to move on. It’s been a year in the making since they said Saturn would not be a part of General Motors.”
Penske has said the deal could close late in the third quarter.
“We, along with General Motors, remain in the due diligence process and hope to complete that process sometime soon,” said Tony Pordon, senior vice president of Bloomfield Hills-based Penske Automotive Group Inc.
The agreements sent to dealers reiterate that GM will supply the Aura sedan and the Vue and Outlook SUVs on a contract basis for a period of time. When the memorandum of understanding was announced in June, Penske said GM would supply those vehicles for at least two years.
“I saw that as a positive step,” said Grand Blanc-area dealer Joe Serra, who signed the agreement, and could eventually be an investor in the new Saturn. “We know what the playing field is going to look like and now we can play ball.”
The agreements are a sign that negotiations with GM are nearing a conclusion, unlike bogged-down talks for GM’s other castoff brand, Hummer. The Beijing Youth Daily reported recently that China’s Ministry of Commerce rejected a bid by Sichuan Tengzhong Heavy Industrial Machinery Co.’s to buy Hummer.
There are no major changes from dealer agreements under GM and details such as sales objectives are not mentioned. But the agreements last for two years, a key difference from the GM agreements, which were open-ended, dealers said.
“It points out they are going to maintain their commitment to the Saturn mission, philosophy, values and focus on exceeding customer expectations,” Serra said.
GM reached a memorandum of understanding in June to sell the Saturn brand and dealer network to Penske.
GM, which emerged from bankruptcy court July 10 after shedding brands, billions in debt and thousands of employees, is focusing on Chevrolet, Cadillac, Buick and GMC.
Penske’s deal with GM includes the Saturn brand, the parts operation based in Spring Hill, Tenn., and a network of about 340 dealerships, and is expected to preserve 13,000 jobs.
The Penske Automotive Group Inc., which operates 310 franchises in the United States and internationally, sells 40 brands. Penske also distributes the Smart car, made by Daimler AG.
The Smart car and Saturn vehicles will be sold in separate dealerships, Penske said.
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The two-year agreements, which are subject to completion of a deal for Saturn, were sent to about 340 U.S. dealers, who had until Sept. 11 to sign and return them. The agreements have one-year automatic renewals if dealers meet certain conditions.
The pending sale has been hailed by dealers who are looking for Penske to bring stability to the brand and stop an erosion of vehicle sales that has accelerated since GM said it would shed Saturn along with Hummer, Saab and Pontiac as part of a massive restructuring. This year, Saturn sales are down 59.2 percent, the second-greatest decline among GM brands behind Hummer, which is down 61.5 percent.
“We can’t wait for this thing to get done,” said Stuart Lasser, who owns three Saturn outlets in New Jersey. “We have to get on with our lives, we have to move on; the franchise has to move on. It’s been a year in the making since they said Saturn would not be a part of General Motors.”
Penske has said the deal could close late in the third quarter.
“We, along with General Motors, remain in the due diligence process and hope to complete that process sometime soon,” said Tony Pordon, senior vice president of Bloomfield Hills-based Penske Automotive Group Inc.
The agreements sent to dealers reiterate that GM will supply the Aura sedan and the Vue and Outlook SUVs on a contract basis for a period of time. When the memorandum of understanding was announced in June, Penske said GM would supply those vehicles for at least two years.
“I saw that as a positive step,” said Grand Blanc-area dealer Joe Serra, who signed the agreement, and could eventually be an investor in the new Saturn. “We know what the playing field is going to look like and now we can play ball.”
The agreements are a sign that negotiations with GM are nearing a conclusion, unlike bogged-down talks for GM’s other castoff brand, Hummer. The Beijing Youth Daily reported recently that China’s Ministry of Commerce rejected a bid by Sichuan Tengzhong Heavy Industrial Machinery Co.’s to buy Hummer.
There are no major changes from dealer agreements under GM and details such as sales objectives are not mentioned. But the agreements last for two years, a key difference from the GM agreements, which were open-ended, dealers said.
“It points out they are going to maintain their commitment to the Saturn mission, philosophy, values and focus on exceeding customer expectations,” Serra said.
GM reached a memorandum of understanding in June to sell the Saturn brand and dealer network to Penske.
GM, which emerged from bankruptcy court July 10 after shedding brands, billions in debt and thousands of employees, is focusing on Chevrolet, Cadillac, Buick and GMC.
Penske’s deal with GM includes the Saturn brand, the parts operation based in Spring Hill, Tenn., and a network of about 340 dealerships, and is expected to preserve 13,000 jobs.
The Penske Automotive Group Inc., which operates 310 franchises in the United States and internationally, sells 40 brands. Penske also distributes the Smart car, made by Daimler AG.
The Smart car and Saturn vehicles will be sold in separate dealerships, Penske said.
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