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CNBC ON DIGG

Don't Expect Saturn Dealers to Go Quietly

Published: Thursday, 1 Oct 2009 | 10:46 AM ET

Text Size

By: Phil LeBeau

Saturn Aura
Source: saturn.com
Saturn Aura
It's long been clear the best part of Saturn was its dealer network: a collection of the savviest, most powerful and connected dealers in the country. They are the folks GM wooed in the late 80's and early 90's because they had been in the car business for years and knew how to do it right. For all the talk about Saturn having loyal customers and a clean image, the real value of the brand has been and remains the dealer network.

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Those dealers are the reason Penske Auto Group [ Loading... () ]wanted Saturn. But after months of negotiating with GM and an outside supplier to provide vehicles for Saturn at some point in the future, the deals never came together. Penske walks. GM says we'll shut down Saturn. And the Saturn dealers are left to say what? Thanks for the memories?

No.

The Saturn dealers will not go that quietly. They will likely try to force GM into doing one of two things: 1) give them money to go away or, 2) get back in the room with Penske and work out a deal. And with the U.S. Government now owning a majority of GM, you can bet the Saturn dealers will press their case in Washington. As it is, some on Capitol Hill are still threatening to force GM and Chrysler to take back some of the hundreds of dealers they shed in bankruptcy.

Why did the Saturn sale fall apart? Largely because Penske could not get assurances about where Saturn vehicles would be coming from 2, 3, or 4 years from now. GM has been adamant it will only supply Saturn with vehicles for the first 18 months after the deal was finalized. Meanwhile, Penske has been negotiating with a South Korean consortium, as well as Renault, about striking a deal for them to build Saturn models. When the South Koreans told Penske there is no way they can make a total line-up of cars and SUVs in 18 months Roger Penske had now choice but the walk away from the deal.

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Now, the Saturn dealers are out in the cold and facing the prospect of seeing their brand go away for good. You think they're gonna sit there and say, "oh well, it was a good run, but that's the way it goes." I don't.

For years, Saturn has been a forgotten brand at GM. Now the Saturn dealers are likely to make sure they are not forgotten.