GM's Saturn line entices bidders into its orbit
DETROIT -- With bidders seemingly coming out of the woodwork to buy the Saturn car brand, one might wonder what investors could possibly see in the battered vehicle line.
Saturn, a brand long starved of new products, has made a bit of a comeback in the last two years. It's won favor for stylish new cars such as the Saturn Astra hatchback and the Saturn Aura, which was the 2007 North American Car of the Year. But sales are down 58.3% this year, more than the industry's 37.4% drop.
And while the Saturn brand may have a few dings in it, there's still value left in Saturn's dealer network. Saturn was the first brand to force its dealers to adopt the same-sales practice, offering no-haggle pricing for cars and trucks, and treating customers like celebrities once they purchased a vehicle.
"There's still a lot of loyalty between the customers and the dealers," says David Cole, chairman of the Center for Automotive Research. "That's got some value."
Penske said Tuesday that while it's interested in talking to GM about Saturn, it hasn't made a formal offer. And the timing may be off. "We have an interest in looking at opportunities with the brand," said Tony Pordon, Penske's senior vice president. "But there's a tight time frame to do that."
GM has until June 1 to work out a restructuring plan with its bondholders, the United Auto Workers union and dealers. The automaker is operating on $16.4 billion in government loans, and President Obama has said if it can't make the necessary changes by June 1, the bailout spigot will be turned off. That could result in bankruptcy.
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