… unless there is a last minute buyer.
The breaking news this afternoon is that General Motors attempts to sell the Saturn brand vehicles has failed abruptly when Penske Automotive called off the deal today. General Motors has confirmed that talks have fallen apart and will now ‘wind down’ the entire Saturn name.
This will mean that all production of Saturn vehicles will end very soon and all dealerships in the United States will have to close.
Penske Auto Group (Name/Ticker Changed from UAG (United Auto Group) on 7/2). *PENSKE AUTOMOTIVE TERMINATES DISCUSSIONS WITH GENERAL MOTORS TO ACQUIRE SATURN; GM to wind down Saturn Brand and dealership network.
- Citing concerns directly related to the future supply of vehicles beyond the supply period it had negotiated with GM.
- Since announcing its discussions with GM on June 5, 2009, the company has been in the due diligence process to determine the feasibility of developing an independent distribution model for Saturn-branded products and service parts in the United States, including the sourcing of vehicles from GM and other potential suppliers. The company had negotiated a definitive agreement with GM to source vehicles on a contract-manufactured basis for a period of time. After this period, the company would have been required to source vehicles from another third party under a similar contract-manufacturing agreement.
- Since announcing its discussions with GM on June 5, 2009, the company has been in the due diligence process to determine the feasibility of developing an independent distribution model for Saturn-branded products and service parts in the United States, including the sourcing of vehicles from GM and other potential suppliers. The company had negotiated a definitive agreement with GM to source vehicles on a contract-manufactured basis for a period of time. After this period, the company would have been required to source vehicles from another third party under a similar contract-manufacturing agreement.
With no contract from Penske to manufacturer Saturn cars it will require General Motors to close additional plants and layoff more employees. And the employees of all the Saturn dealers will soon be on the unemployment lines.
Will someone else step forward to purchase the Saturn name? If they are smart they won’t.
More on this topic
(What's this?)
Could Goldman Sachs Share GM’s Fate?
(Contrarian Profits, 10/1/09)
GMAC Joins the Black Hole Club
(naked capitalism, 10/27/09)
GMAC has been nationalized
(naked capitalism, 10/29/09)
