Why The Penske Saturn Rescue Deal Failed

It appears that GM put the Penske Automotive Group in a nearly impossible bargaining position in their attempted bid to purchase and rescue the Saturn brand. Penske would have been forced to develop their own line of vehicles after 2011 as GM refused to supply vehicles such as the current Saturn models which were mostly re-badged European models such as Opel models. Penske had hoped that Renault Samsung, the South Korean industrial giant could supply Korean designed automobiles and trucks. However, that deal fell through as well.

It would have been impossible for Penske to develop their own line of vehicles by 2011 without the help of some existing automobile company. And apparently other Korean and Chinese brands weren't that interested because of the financial health of GM and of the Saturn Corporation brand. Even though Saturn had a fine record for quality and an excellent network of existing dealerships, the situation just looked too risky for an outside automaker to invest in.

Rodger Penske is one of the smartest businessmen in the United States. He was attempting to buy Saturn for nearly nothing and get product either from GM or another automaker and put the Saturn badge on the products and sell the products for a profit in the existing string of 250 Saturn dealerships nationally. This is the same business formula Penske uses to distribute the Smart cars in the United States. Penske thought that the same formula would work with the Saturn brand. Acquire a product for little money. Find a foreign product to sell with his own name on it, and make a profit. But GM was a very difficult customer to accept such a deal.

Essentially, Penske would only be buying the Saturn name and acquire the dealerships, but since many of the vehicles were only copies of European GM Opels, Penske just wouldn't have any product to sell after 2011. You just can't run a car company with no product to sell. The GM offer to sell Penske Saturn was a pretty empty offer. If GM really wanted the deal to succeed they could have provided an ongoing arrangement for Penske to sell American versions of European GM models not normally sold here. But GM really didn't want any further connection to Saturn. Lock, stock and barrel, GM wanted out of Saturn. Penske recognized that this deal was a bridge to nowhere, so the deal failed. Now likely Saturn is gone for good. No 11th hour reprieves from the governor are likely.