News - Saturn
GM break-up accelerates
Saturn eclipsed: GM's alternative Saturn brand is set for a quick exit.
A speedier exit from Saturn while Opel/Vauxhall attract rival bidders
29 April 2009
US Saturn dealers are under pressure to quickly find a new supplier after General Motors said it would walk away from the brand by the end of this year – two years earlier than previously expected.
The faster exit from the domestic brand was unveiled this week, just as interest in Europe’s prize asset, Opel/Vauxhall, started to intensify.
GM has ramped its plans to ditch Saturn as part of the faster and deeper restructuring ordered by the US federal government as a condition for the advancing of more loan funds to tide GM over.
The revised timeline gives Saturn dealers – who own the Saturn distribution company – precious little time to find another supplier.
Under the initial reorganisation plan tabled in February, former GM chief executive Rick Wagoner said Saturn would be maintained until the natural end of the current range’s model cycle, around 2010-11.
New chief executive Fritz Henderson said this week GM would phase out the Saturn brand by the end of this year.
“As a result, our current viability plan does not comprehend production and sales to dealers of Saturn product beyond 2009,” GM said in its statement to the US government.
GM has, in fact, been discussing the fate of the brand with a private equity investor, Telesto Ventures, and the Saturn dealers, who are keen that another supplier be found to keep the distribution network operating.
Telesto is backed by a US car dealer who owns 17 franchises, including two Saturn outlets. There are other interested parties.
Meanwhile, in Europe, the sale of Opel was surrounded in controversy after the company’s union spokesman poured cold water on Fiat’s stated intentions to consider buying into Opel.
Fiat is the second automotive company to express interest in Opel/Vauxhall, after major parts supplier Magna International signalled it was a potential buyer.
There are also other parties in the frame, mostly private equity funds, according to reports from Europe.
GM chief executive Fritz Henderson signalled this week that GM wanted to retain a stake in Opel, perhaps to retain access to its small-car design ability.
In its talks with German government representatives, Fiat has promised to keep open all four of Opel’s assembly plants, but the Opel union leadership is skeptical about the motives of Fiat chief executive Sergio Marchionne.
Opel’s works council chief Klaus Franz last week said the union would protest against a Fiat takeover.
“Fiat has no money,” he said.
He believes Fiat was trying to grab some financial aid from the German government.
“They want a rescue for Fiat, not for Opel,” Mr Franz said.
Fiat has been put on the defensive by the opposition, and has had to make specific promises to back up its approach.
It has made clear that none of Fiat’s debt will come with the company if it takes control of Opel. In addition, it has pointed out that the proposal includes only the Fiat car operations, not its ailing trucks business.
Fiat boss Sergio Marchionne is confident he can weld Fiat, Chrysler and Opel into a global group producing about seven million units a year, although he has stated that Chrysler is his main priority.
The other interested party, Magna, is working on a partnership with a Russian oligarch Oleg Deripaska, and is aiming to secure a 50 per cent stake in Opel.
Reports in the Canadian Globe and Mail suggest Magna would hold a 20 per cent stake and Mr Deripaska a 30 per cent stake.
Magna International, based in Aurora, Canada, owns Magna Steyr, based in Graz, Austria. A spokeswoman for the company in Troy, Michigan, Tracy Fuerst, said it was the company’s policy “not to comment on speculation”.
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