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Saturn was Supposed To Save GM

 

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The first Saturn cars went on sale in the fall of 1990 to great fanfare. David Cole, head of the Center for Automotive Research, declared that Saturn "scares the liver" out of the Japanese. Another automotive expert, consultant James Harbour, predicted that "General Motors is about to kick butt from one end of this country to another." Body-part analogies were flying like welding sparks.

The Japanese were, in fact, a little worried. "We felt they had the opportunity to heal a lot of [GM's] wounds," recalls Gary Convis, a former senior U.S. manufacturing executive for Toyota, "and to be a very successful company." But when Honda engineers bought a Saturn and disassembled it, their fears abated. The dashboard had overlapping plastic panels that made it look cheap, and a harsh-sounding engine that stemmed from inferior motor mounts. The plastic-polymer doors, billed as a unique feature that wouldn't get dinged in parking lots, fit poorly. Again and again the surprised engineers exclaimed shinjirarinai, a term that means "unbelievable."

The technology may have been wanting, but the public-relations campaign was firing on all cylinders. The advertising showed Saturn workers, their dogs, their kids and the long white fence surrounding the factory. "I never felt this way about any job, any car, or anything I ever built," a factory technician declared in one ad. Saturn's tag line was: "A Different Kind of Company. A Different Kind of Car."

Dealers ate it up. Tom Zimbrick opened his Saturn store in Madison, Wis., on April 16, 1991. Disaster almost struck the first week, when all but one of the first 16 cars he sold had bad engine antifreeze that had been delivered by a Saturn supplier. Saturn replaced not only the coolant, but the entire car. "Customers said, 'Wow, they gave us a brand-new car'," Zimbrick recalls. "It created customer enthusiasm."

Every time a customer drove away in a brand-new Saturn, the dealership's employees would gather around the driveway to wave and applaud. Saturn's image got a further boost on June 7, 1993, when Vice President Al Gore visited the Spring Hill factory and declared that he wanted to "Saturnize" the federal government.

In June 1994 more than 40,000 Saturn owners and their families trekked to Spring Hill for the first Saturn Homecoming. It was the sort of "cult car" gathering usually attended by owners of 385-horsepower Corvettes, not by people who had purchased 85-horsepower econocars. The Saturn owners were feted with factory tours, country-music concerts and barbecues with the people who actually designed and built their cars. After selling fewer than 75,000 cars in 1991, its first full year, Saturn sold more than 286,000 in 1995, and topped the respected J.D. Power Customer Satisfaction Survey. But behind the scenes, the leaders of the UAW and General Motors were having increasing doubts about Saturn, for very different reasons.

Roger Smith's spending sprees had saddled GM with high costs and too much manufacturing capacity. In 1991 the company lost a then-record $4.45 billion. Smith's successor resigned under pressure after just two years at the helm. The board's new pick, Jack Smith (no relation to Roger), decided that GM had more pressing priorities than Saturn. So while Honda and Toyota were investing money to develop new versions of the Civic and Corolla, Saturn's cars went nearly a decade without being updated. The price of gas was dropping, along with the demand for small cars. But when Saturn executives sought funds to develop their own sport-utility vehicle, the response from GM headquarters was that customers should buy Chevy SUVs instead.

Meanwhile, the limitations of workplace democracy were becoming evident. Suppliers were chosen by a "point system" that awarded extra points to unionized companies, which sometimes got contracts despite higher costs or inferior quality. On occasion, labor's lead man at Saturn found himself dealing with team members who didn't want to return to the assembly line to, you know, build cars. "It was well intentioned, but it was like having two people share one pair of pants," says Convis, the former Toyota exec. "If one wants to go right and the other left, you can't move." Consensual decision making was valued at Japanese plants, too, but management retained the right to run the place.

At the same time GM's enthusiasm for Saturn was waning, a new power was emerging at UAW headquarters in Detroit. Stephen P. Yokich, who succeeded Ephlin, was his polar opposite. He was a trim fitness buff who was prone to violent outbursts of temper. Yokich had first made his mark at the union by leading a lengthy 1979 strike against International Harvester, from which the company never fully recovered.

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Member Comments

  • Posted By: reswob10 @ 04/27/2009 12:20:35 PM

    I just want to say, since I graduated college in 1993, I've had only Saturns. I've gotten a total of 400,000 miles from both, 190,000 from the first (1993 SL) and 210,000 from the second (1996 SL) and only spent about $10,000 total in maintenance. I'm still driving the second 150 miles a day and getting 35 - 40 MPG. Great car as long as it's not a 2000 or higher...

    Saturn was, at one time a great car and a great company... division of GM. I'm sorry to see the slide.

  • Posted By: rabagley @ 04/26/2009 1:28:34 PM

    It's fairly easy to explain why Saturn failed: low energy taxes. Why do (did) American consumers favor huge vehicles with horrible mileage? Why do europeans have so many fuel-efficient choices in their car market? Why do Americans continue to own homes 30-80 miles away from where they work? Why do European cities look so different? Why is public transit in Europe clean, convenient, and usable? Why are 90% of American cities so hostile to pedestrian, bicycle, and scooter/motorcycle traffic? Why are our current plans to increase CAFE mileage doomed to fail? Why are Americans in serious trouble once fuel prices head back up?

    One reason: a history of corrupt energy policy stretching back 30 to 50 years. Want to fix it? Call your congresscritters and ask for a 50% gas tax to be phased in 5%/year over the next ten years, with the proceeds going to public transit infrastructure. You think this year is bad, if we do nothing, just wait.

  • Posted By: tech010101x @ 04/26/2009 11:58:08 AM

    The concept of "Buy American" is ironically anti-American at its core. If, as an American, you hold dear the idea of limited government role for healthy private industry for a strong and healthy USA, then the idea of having artificial constraints like trade barriers and "Buy American" are the antithesis to those fundamental American core values. The only way "American made" would enter the consumer's decision making is because the product is somehow inferior - either price, quality, features, or something that makes it less than a competitor. Therefore, if a "buy American" factor kicks in, it is to prop up a non-competitive product (at least for that particular consumer). If enough consumers do this, then as a group, they are subsidizing the non-competitiveness of that American made product. Kick in enough of that... between government subsidies, tax breaks, and consumer forgiveness, this American made product and the company behind it is getting inducement to do less... not more - overall unhealthy for both the company and ultimately America.

    Americans bought way too many GM's, Ford, and Chrysler cars over the years - giving these companies a very wrong picture over exactly how well their products really competed in the marketplace. Look at the overseas marketshare's of GM, Ford and Chrysler (yes there are protectionist trade policy issues, but still...) Now take away the fact that "buy American" isn't really true anyways anymore... that Chrysler is probably Canadian and the rest are made in some combination of U.S., Canada, Mexico, and many other places. So now, not only are the products inferior, they're not even American, or no more so than many Honda's, Toyota's, BMW's, or Mercedes. The companies themselves are stock corporations with ownership that is completely spread throughout the world. The companies themselves are complacent... after all, Americans have been buying all sorts of truly awful cars coming from the Detroit automakers for years, why do they have to work that hard? So now they are "too big to fail" and we toss in billions in the hope that they will survive. But ultimately, if you believe in limited government and private enterprise, the weak must re-invent or perish. At this point, the Detroit automakers don't know how to get better. Leave Ford to be the last one standing... it will easily soak up the remaining market for mediocre products made by the historically "American" car company and focus on a new crop of innovative companies like Tesla. Focus on reducing the barriers to making a car company, like limited factory runs on out-sourced manufacturing plants so that Saturn dealers can have a contracted run made to their spec, rather than GM bosses dictating it. Let companies fail - build a system where failure doesn't mean the failure of the U.S. industry. This, in many ways, is the failure of big business - too big to fail means it isn't healthy for th

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