The pending sale has been hailed by dealers who are looking for Penske to bring stability to the brand and stop an erosion of vehicle sales that has accelerated since GM said it would shed Saturn along with Hummer, Saab and Pontiac as part of a massive restructuring. This year, Saturn sales are down 59.2 percent, the second-greatest decline among GM brands behind Hummer, which is down 61.5 percent.

“We can’t wait for this thing to get done,” said Stuart Lasser, who owns three Saturn outlets in New Jersey. “We have to get on with our lives, we have to move on; the franchise has to move on. It’s been a year in the making since they said Saturn would not be a part of General Motors.”

Penske has said the deal could close late in the third quarter.

“We, along with General Motors, remain in the due diligence process and hope to complete that process sometime soon,” said Tony Pordon, senior vice president of Bloomfield Hills-based Penske Automotive Group Inc.

The agreements sent to dealers reiterate that GM will supply the Aura sedan and the Vue and Outlook SUVs on a contract basis for a period of time. When the memorandum of understanding was announced in June, Penske said GM would supply those vehicles for at least two years.

“I saw that as a positive step,” said Grand Blanc-area dealer Joe Serra, who signed the agreement, and could eventually be an investor in the new Saturn. “We know what the playing field is going to look like and now we can play ball.”

The agreements are a sign that negotiations with GM are nearing a conclusion, unlike bogged-down talks for GM’s other castoff brand, Hummer. The Beijing Youth Daily reported recently that China’s Ministry of Commerce rejected a bid by Sichuan Tengzhong Heavy Industrial Machinery Co.’s to buy Hummer.

There are no major changes from dealer agreements under GM and details such as sales objectives are not mentioned. But the agreements last for two years, a key difference from the GM agreements, which were open-ended, dealers said.

“It points out they are going to maintain their commitment to the Saturn mission, philosophy, values and focus on exceeding customer expectations,” Serra said.

GM reached a memorandum of understanding in June to sell the Saturn brand and dealer network to Penske.

GM, which emerged from bankruptcy court July 10 after shedding brands, billions in debt and thousands of employees, is focusing on Chevrolet, Cadillac, Buick and GMC.

Penske’s deal with GM includes the Saturn brand, the parts operation based in Spring Hill, Tenn., and a network of about 340 dealerships, and is expected to preserve 13,000 jobs.

The Penske Automotive Group Inc., which operates 310 franchises in the United States and internationally, sells 40 brands. Penske also distributes the Smart car, made by Daimler AG.

The Smart car and Saturn vehicles will be sold in separate dealerships, Penske said.

Penske and Saturn may join a venture with Nissan Motor Co., the Japanese affiliate of Renault, Bloomberg News reported Wednesday.

“I can’t provide any speculation on who a potential OEM partner could be,” Saturn spokesman Steve Janisse said. “There have been a number of meetings with potential partners, but it’s really going to be up to the eventual buyer who they want to partner with to provide product for the future of Saturn.”

Other suitors include an Ohio investment group that wants to build vehicles using union workers at U.S. factories targeted for closure by the Detroit automaker. The group, headed by Ohio auto industry worker Gary Marvicsin, met with Saturn officials Tuesday.

Another group, Telesto Ventures, wants to partner with a foreign manufacturer and import vehicles under the Saturn name.

The group, which includes Oklahoma City-based private equity firm Black Oak Partners LLC and several Saturn dealers, submitted a proposal last month, terms of which were not made public. Telesto proposes initially distributing GM-built vehicles through Saturn’s 400 dealerships in North America and eventually offering small, fuel-efficient vehicles produced by several manufacturers, most of which would be sold under the Saturn brand.

Meanwhile, Hong Kong-based carmaker Geely Automobile Holdings has submitted a bid for Saab, according to the Wall Street Journal.

GM, subsisting on $15.4 billion in federal aid, is trying to sell or phase out Saab, Saturn, Pontiac and Hummer as part of its broad restructuring.

A Geely spokeswoman could not be reached for comment today.

Penske is the highly successful head of Bloomfield Hills-based Penske Automotive Group, Inc., which operates more than 300 franchises in the United States and internationally, selling 40 different brands. The billionaire Detroit booster, who oversaw the city’s Super Bowl XL preparation, has accomplished almost everything in the auto industry, from racing cars to building engines as owner of Detroit Diesel Corp. to snagging exclusive U.S. distribution rights for the iconic Smart minicar. But buying a brand and building vehicles would pose a new challenge.

“We look at things all the time,” said Tony Pordon, a spokesman for Penske Automotive Group. “We have been offered an opportunity to look at Saturn. It’s very premature to assume anything will be done. I can confirm to you that we are looking at it.”

Further details were not available Monday but Penske’s interest surfaced along with that of an Ohio investment group that hopes to acquire the brand. The Ohio group is scheduled to meet with Saturn officials today to discuss its proposal to build vehicles using union workers at U.S. factories targeted for closure by the Detroit automaker.

The new suitors bring star power and diversity to a pool of candidates bidding to buy Saturn, a customer-friendly but underperforming brand that GM plans to eliminate this year unless it can be sold.

“(Penske’s) a shrewd businessman and has proven himself time and again,” auto analyst Aaron Bragman of IHS Global Insight said Monday. “He’s a bit of a local hero the way he cleaned up Detroit for the Super Bowl, but what he can do with a brand like Saturn, I’m not exactly sure.

“I really don’t understand how any group thinks they can make Saturn a success when GM, with all its skills and vehicles and brand power and marketing muscle, could not.”

Last week, GM President and Chief Executive Officer Fritz Henderson said there were investors who had submitted “concepts” for acquiring Saturn and its retailer network.

Until now, only one potential buyer has been publicly identified: Telesto Ventures wants to partner with a foreign manufacturer and import vehicles under the Saturn name.

The group, which includes Oklahoma City-based private equity firm Black Oak Partners LLC and several Saturn dealers, submitted a bid last month, terms of which were not made public. Telesto proposes initially distributing GM-built vehicles through Saturn’s 439 dealerships in North America and eventually offering small, fuel-efficient vehicles produced by several manufacturers, most of which would be sold under the Saturn brand.

The Ohio group is interested in buying North American factories that might close during the automaker’s restructuring and make new vehicles that would be sold under the Saturn name.

“We will not export these jobs,” said one of the Ohio partners, who did not want to be identified. “Some might criticize us and say this can’t be viable, but we believe it can.”
GM prepares to review bids

GM is preparing to review proposals from several Saturn bidders and has hired an adviser to secure a deal later this year, the company said Monday.

The automaker hired S.J. Girsky & Co. to help with the transaction. The firm is headed by Stephen Girsky, who has been an adviser to the United Auto Workers and GM, and is a well-known former auto analyst for Morgan Stanley.

GM did not identify the other interested parties but will continue to look at proposals until early June.

The list will be narrowed to three or four in hopes of securing a deal by perhaps the end of the third quarter, Saturn spokesman Steve Janisse said Monday.

Janisse would not comment on any particular suitor.

“There are a number of potential investors interested in Saturn and we are having discussions with them,” Janisse said.

GM, which is subsisting on $15.4 billion in federal loans, is shedding brands as it restructures. The automaker is focusing on four core marques — Chevrolet, Cadillac, Buick and GMC — and eliminating or trying to sell Saturn, Saab, Hummer and Pontiac.
Ohio group has Big 3 ties

The Ohio group has a broad background in the auto industry and includes current and former senior managers from Detroit’s Big Three automakers. The group also includes private financial backers, chemists and engineers who hail from Michigan, Ohio, Indiana and Florida.

The group is willing to work with the UAW and accept some legacy costs, which include such things as retiree health care and pensions, to ensure affordable and “highly fuel efficient vehicles with a good safety record” continue to be made by the union, the Ohio partner said.

“We believe there was a promise made to the employees of General Motors that provided a certain amount of benefits for retirees,” the partner said. “To take that away is not only unprofessional and a violation of trust, but it’s wrong.”

The group would need to contract with GM to supply vehicles initially.

The investors have proposed using Saturn dealerships in North America, though perhaps on a smaller scale depending on the profitability and location of the retail outlet.

“There has to be a dealership-by-dealership review,” the partner said.

The group also is looking at possibly acquiring factories that might be closed by Chrysler LLC, which filed for Chapter 11 bankruptcy last week.

“Not all of those facilities may be viable, but the idea of shipping everything from overseas is not us,” the source said.

The group has started talking to people in Washington about possible assistance available at the federal and state level to keep the plants open. “We are very dedicated, first of all, to building a quality product,” the source said. “It will be everything that Saturn was when it was being launched and more.”

Selling Saturn is just one facet of a broader restructuring plan GM is rushing to finalize before June 1 or face a possible Chapter 11 bankruptcy filing. It is trying to get unsecured bondholders to agree to swap $27 billion in debt for a 10 percent equity stake in the company though bondholders countered and are seeking a 58 percent stake.

Henderson essentially rejected the counteroffer, saying the U.S. Treasury Department only authorized GM to offer a 10 percent stake.

“It’s outside of what the Treasury has told us they would support,” Henderson told the Associated Press on Monday. “It’s about as factual as I can be.”

Ran into an older gentleman at the local dealer mall. He was reading his newspaper sitting in a very inconspicuous Cavalier on the side of the road. The only thing noticeable was that the signage on the Cavalier said “SATURN SUCKS” and was parked right in front of the Saturn dealership.

Now that Saturn might be shut off as a complete brand as a result of the latest policy changes over at GM, this might not be such a bad thing after all. The Saturn dealer did not seem that impressed, but luckily they had almost no traffic to be affected anyways. With the recent downturn in Saturn sales, it’s a small wonder the dealership was even open on that particular Saturday.

The gentleman was parked right beside the dealership, with a vehicle that stood out like a sore thumb. It was evident that there has been a great deal of displeasure that has been endured on his part.

Digging more into the story it seems the gentleman ordered a 2000 Saturn brand new and had troubles since the very beginning. From the day it was picked up the vehicle has experienced troubles that were not remedied by the dealer. This has caused the gentleman to go through arbitration as the vehicle had under 1000 miles. With promises of the vehicle being fixed arbitration has been concluded. The vehicle kept having problems and more and more problems developed. Although we’re not sure how the vehicle ended it’s life, it’s safe to say it’s existence has seen a bumpy road.

It seems this man holds a grudge, as 9 years later, he still finds himself decaled out in front of the Saturn dealer, but now sporting a much improved Chevy Cavalier. I hope the Chevy dealer has enough sense to cover the Cavalier bumper to bumper, or else he’ll find a very much unwanted visitor on his driveway every Saturday for years to come.

As reported in the Wall Street Journal, Ford is looking at bringing over vehicles, such as the mid-size Ford Mondeo, to fight current economic woes of high fuel prices.

The announcement as to re-structuring will be made on Thursday at the conference call announcing second-quarter results at the company.

The Mondeo is a mid size 4 door vehicle that comes with 4cyl and 6cyl engine variants. It is the competitor to GM’s European mid-size vehicle the Opel (Vauxhall) Vectra. In North America it is marketed as the Saturn Aura.