GM sells Saturn to Penske - Deal comes in same week as sale of Hummer

GM sells Saturn to Penske - Deal comes in same week as sale of Hummer
By John Reed, Motor Industry Correspondent
Copyright The Financial Times Limited 2009
Published: June 5 2009 16:24 | Last updated: June 5 2009 16:24
http://www.ft.com/cms/s/0/31cfdb74-51e1-11de-b986-00144feabdc0.html


General Motors said it was selling its Saturn brand to Penske Automotive Group, the listed dealership chain.

The deal, part of the bankrupt Detroit carmaker’s drive to pare back its portfolio to four brands, comes in the same week as GM’s sale of Hummer to China’s Sichuan Tengzhong Heavy Industrial Machinery, GM and Penske did not give a price for the deal, which they said was expected to close in the third quarter of this year.

Under terms of the deal, Penske will retain rights to the brand as well as certain other Saturn assets. GM will continue to produce Saturn’s Aura, Vue, and Outlook models on a contract basis for the new owner.

In April GM said it would phase out Saturn along with its Pontiac brand by end-2010, unless it received an offer to buy it. In May it said that several potential buyers had expressed interest.

The deal will save GM the expense of shutting down the brand, an expensive process in the US because of state laws protecting dealerships. GM said the deal, if completed, would save more than 350 dealerships and 13,000 jobs at Saturn and its dealers in the US.

GM set up Saturn in the 1980s as a response to the challenge posed by overseas imports. The brand began selling cars in 1990, and has sold more than 4m vehicles since then.

America’s largest domestic carmaker filed for Chapter 11 bankruptcy protection in New York on June 1, and plans to exit within three months with the help of $50bn of US federal government aid.

Penske is America’s second-largest listed car dealership group after AutoNation, as measured by revenues. It holds the rights to distribute Daimler’s Smart brand of supermini cars in the US.

Last month Automotive News, the industry publication, reported that Penske wanted to import South Korean-built cars made by Renault’s Samsung Motors subsidiary to be sold through the Saturn network.

GM is also selling its Saab brand, which went into administration in Sweden in February. Last month a court gave Saab another three months until August 20 to restructure and find a buyer. The brand says it has shortlisted three candidates for the sale.