LEBEAU: A BUSY, BUSY WEEK FOR GENERAL MOTORS. TODAY THE DEAL FOR SATURN TO BE SOLD TO PENSKE AUTOMOTIVE GROUP. JOINING ME LIVE FROM DETROIT FOR A FIRST ON CNBC INTERVIEW JILL LAJDZIAK THE GENERAL MANAGER OF SATURN AND ROGER PENSKE, CHAIRMAN AND CEO OF PENSKE AUTOMOTIVE GROUP, THANK YOU FOR JOINING ME.
LAJDZIAK: GREAT TO BE WITH YOU.
LEBEAU:ROGER I'M CURIOUS WHAT IS IT ABOUT SATURN THAT YOU LOOKED AT IT AND YOU SAID, THERE'S A GOOD DEAL HERE. THIS IS TIME FOR THESE GUYS TO BE FOLD IN TO THE PENSKE AUTOMOTIVE GROUP?
PENSKE: WELL IT THINK IT'S 3.5 MILLION SATURN CUSTOMERS WHO ARE IN THE MARKETPLACE TODAY. AND IT'S VERY DIFFICULT FOR SOMEONE TO BUILD A BRAND ITS BEEN IN FOR TWENTY YEARS AND HAS THE ICONIC VALUE AND THAT WE JUST THINK IT'S A GREAT OPPORTUNITY FOR US TO PARTNER WITH GENERAL MOTORS AND GIVE US A CHANCE TO SUPPORT THAT GREATSATURN DEALER NETWORK THAT'S IN PLACE.
LEBEAU: JILL WHAT'S THE FUTURE FOR SATURN? I KNOW ROGER IS TALKING ABOUT 3.5 MILLION CUSTOMERS, AND YOU'VE GOT AN ICONIC BRAND. YET AT THE SAME TIME THIS IS A BRAND THAT HAS NEVER MADE ANY MONEY FOR GENERAL MOTORS AND IT'S ALWAYS BEEN TABBED AS HAVING LOTS OF POTENTIAL BUT NEVER LIVING UP TO THE POTENTIAL. WHAT'S THE FUTURE?
LAJDZIAK: I THINK THERE'S A GREAT FUTURE, PHIL. WE HAVE TWO ICONS COMING TOGETHER. THE SATURN BRAND AND THE PENSKE ORGANIZATION. WITH ROGER'S EXPERTISE AND LEAN DISTRIBUTION THINKING, WE CERTAINLY HAVE AN OPPORTUNITY TO TAKE COSTS OUT OF THE EQUATION AND CONTINUE BRINGING GREAT VEHICLES TO THE MARKETPLACE AT THE RIGHT VALUE PROPOSITION, ULTIMATELY FOR THE CONSUMER. THAT'S WHAT IT'S ALL ABOUT. TAKING CARE OF THE GUESTS AND BRINGING THE GREAT PRODUCTS TO THE MARKETPLACE.
LEBEAU: ROGER HOW LONG BEFORE YOU FINALLY MAKE SOME MONEY WITH SATURN. GM COULDN'T DO IT SINCE 1990. HOW LONG WILL IT TAKE YOU TO SAY, OKAY, WE FOUND A WAY TO MAKE MONEY ON SATURN.
PENSKE: YOU HAVE TO REALIZE THIS IS AN INDEPENDENT OPERATING MODEL. WE WON'T HAVE THE LEGACY COSTS THAT SATURN WAS SADDLED WITH PROBABLY IN THE PAST AND AS WE OPERATE INDEPENDENTLY. WE EXPECT TO HAVE A POSITIVE CASH FLOW AND PROFITABILITY AS WE START OUT. WE'LL HAVE THE BENEFIT OF THE PARTS AND SERVICE BUSINESSES, THE REOCCURRING REVENUE STREAMS WILL BE SUPPORTED BY THE GREAT CUSTOMER BASE AND DEALER BASE. SO, TO ME, THIS IS LOW ASSET REQUIRED. IT'S NOT A LOT OF CAPITAL. IT'S BASICALLY TAKING CARE OF THE CUSTOMER BASE THAT'S IN PLACE AND REACHING OUT FOR THEM AND RECONNECTING.
LEBEAU: ROGER, YOU HAVE GENERAL MOTORS PROVIDING THE VEHICLES AT LEAST INITIALLY. HAVE YOU THOUGHT TO YOURSELF, OKAY, MAYBE WE TALKED TO ANOTHER AUTO MANUFACTURER, WHETHER IT'S NISSAN RENAULT OR WHETHER ITS MAGNA WHO YOU CAN CONTRACTED WITH. ANY OF THOSE TYPES OF AUTOMAKERS. HAVE YOU THOUGHT ABOUT DOING THAT OR FOR THE FORESEEABLE FUTURE ARE YOU GOING TO SAY LET'S STICK WITH GM?
PENSKE: THE IMPORTANT THING IS THE PARTNERSHIP THAT WE ESTABLISHED TODAY TO GIVE US SUPPLY FOR THE NEXT TWO TO THREE YEARS. IN THAT TIME FRAME, WE HAVE A WORLDWIDE MARKETPLACE, WE HAVE MANY PEOPLE CALL US, TAP US ON THE SHOULDER FROM THE STANDPOINT OF FUTURE SUPPLY. AT THIS POINT, WE'VE NOT PICKED A PARTNER, BUT I CAN TELL YOU WE'LL LOOK FOR SOMEONE WHO HAS CLEAN VEHICLES, ONES THAT MEET THE EMISSIONS REQUIREMENTS IN THE U.S. SAFETY STANDARDS. THEN HOPEFULLY IF WE CAN GENERATE THE VOLUME HERE IN THE U.S., THEY'LL BUILD A PLANT AND PRODUCE THOSE VEHICLES HERE IN THE U.S. IT COULD BE A WIN-WIN FOR THE DEALERSHIP OPERATORS, A WIN FOR GM BECAUSE WE HAVE 13,000 PEOPLE TODAY THAT WILL HAVE JOBS IN THE FUTURE. I CAN TELL YOU THOSE DEALERS ARE EXCITED ABOUT WHAT WE'RE GOING TO WITH THE SATURN NETWORK IN THE FUTURE.
LEBEAU: ROGER PENSKE, CHAIRMAN AND CEO OF PENSKE AUTOMOTIVE GROUP AND JILL LAJDZIAK GENERAL MANAGER OF SATURN. FIRST ON CNBC, WE APPRECIATE YOU GUYS JOINING US.
About CNBC:
CNBC is the recognized world leader in business news, providing real-time financial market coverage and business information to more than 340 million homes worldwide, including more than 95 million households in the United States and Canada. The network's Business Day programming (weekdays from 5:00 a.m.-7:00 p.m. ET) is produced at CNBC's headquarters in Englewood Cliffs, N.J., and also includes reports from CNBC news bureaus worldwide. Additionally, CNBC viewers can manage their individual investment portfolios and gain additional in-depth information from on-air reports by accessing http://www.cnbc.com.
Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://nbcumv.com/cnbc/.