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Saturn was Supposed To Save GM

 

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Yokich was suspicious of Saturn's novel labor practices, and proposed a significant change in the contract—reverting to more traditional shift arrangements. After several skirmishes, he prevailed; within months he was elected president of the UAW.

Yokich was instrumental in GM's August 1996 decision to build a new midsize Saturn model at an existing GM factory in Delaware. It was a sea change for Saturn, imperiling the carefully crafted image of the harmonious facility at Spring Hill. But GM was able to avoid closing an existing plant, and Yokich was able to rein in the heresies at Saturn. When the new L series went on sale in mid-1999, it was the first new Saturn product in nearly a decade.

By this point, Saturn sales had been sliding for four straight years. Sales would begin a modest rebound in 2001 when GM belatedly began giving Saturn a series of new vehicles, including an SUV "crossover," gas-electric hybrids and even a flashy roadster. But all were based on similar models sold by other GM divisions. So much for "a different kind of car."

And so much for a different kind of company. In December 2003 Saturn workers voted to return to the GM-UAW master contract. Two months later, the onetime Saturn plant was renamed GM Spring Hill Manufacturing. Today, Saturns (which range in cost from $16,500 to $35,000) are built in Delaware, Kansas, Michigan, Mexico and Brussels. The last Saturn rolled off the assembly line in Spring Hill in 2007.

Mike Bennett, who ran the UAW local in Spring Hill during Saturn's formative stages until he lost his job to a Yokich ally a decade ago, remains a true believer in Saturn's original principles, which he says both GM and the union abandoned. "Had the Saturn strategy been adopted throughout the U.S. auto industry, we'd be in a far different situation today," he says. The survival plan GM recently submitted to the government doesn't specify Saturn's recent financial results (in fact, GM won't say whether Saturn was ever profitable). But it does say that Saturn, Saab and Hummer together lost more than $1 billion annually in recent years, and that the company plans to dispose of all three brands. There was little angst or emotion in reaching the decision to shed Saturn, says one GM insider, who declined to be identified discussing sensitive matters.

Saturn's own executives, though, are "very excited about the future possibilities," says its president, Jill Lajdziak. As if to drive home that message, Saturn recently ran a raft of new TV ads featuring dealers waxing rhapsodic—an ironic message, given the parent company's plans to scuttle it. (A GM spokesman explained the oddly timed ad buy: "We are still in business. We have vehicles to sell … and the brand is still in position to generate revenue for GM.") The 400 dealers nationwide are trying to reinvent Saturn as the "Costco of cars," as one put it. Instead of being a manufacturer that contracts with dealers to sell cars, Saturn would be the mirror opposite: a company owned largely by dealers, who would contract with various automakers to build its cars. A lot of pieces will have to come together to make this happen, acknowledges Stephen Girsky, a partner in a New York private-equity firm who is spearheading the planning to restructure Saturn.

It's a long shot. Saturn has had its flaws, not the least of which was early quality problems with the cars themselves. But it managed, for a time at least, to break out of the labor-management gridlock strangling GM to this day. And it inspired an unusually passionate brand loyalty—a willingness to challenge orthodoxy in the spirit of Roger Smith's speech a quarter century ago. Tom Zimbrick, the dealer from Wisconsin, has that spirit still. "We can make our own rules," he says. "We have a chance to make history again."

Ingrassia is a Pulitzer Prize-winning journalist who has covered the auto industry for nearly 25 years. His book "Crash Course," about Detroit's current crisis, is due out from Random House next January.

With Julie Halpert In Detroit

© 2009

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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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