General Motors Corp.’s Saturn brand will either be sold or phased out by the end of this year, nearly two years faster than previously announced, the brand’s top executive said Tuesday.
Saturn General Manager Jill Lajdziak said the brand, once billed as a different kind of car company, most likely will be sold, given the interest of several buyers who have surfaced. She says GM will take other bids for the brand until June 1.
GM has said it wants to sell or get rid of Saturn, Hummer and Saab as it restructures, so it can once again become profitable. It’s also getting rid of the Pontiac brand.
In February, the company said it would keep Saturn going through the end of the 2011 model year, which is late summer in 2011.
But because of the interested buyers and demands to restructure faster, GM decided to pull the sale deadline forward, Lajdziak said.
GM is living on $15.4 billion in federal loans and must win concessions from its unions, reduce debt and make other cost-cutting moves before a June 1 government deadline.
The company has said it will shed the brands, cut jobs and close more factories as it tries to prove to the government it is worthy of additional loan money. If it can’t meet the deadline, GM will head into Chapter 11 bankruptcy protection.
Lajdziak would not say when GM expects to announce a Saturn sale, but conceded the company will be on a fast timeline to complete a deal by the end of the year.
“We remain confident given the expressions of interest we’ve already had,” she said.
Among the bidders for Saturn is a group led by Oklahoma City private equity firm Black Oak Partners LLC. The group said in a statement that it would get vehicles from GM initially, but it expects to sell smaller, fuel-efficient vehicles from other global manufacturers using Saturn’s well-regarded dealership network.
GM started Saturn in 1990 as a small-car answer to Japanese automakers and billed it as a “different kind of car company.” Its new factory in Spring Hill, Tenn., had more flexible work rules than traditional GM plants and more autonomy for those who built the cars, known for their plastic body panels.
Despite a cult-like following that drew thousands to annual reunions in Spring Hill, the brand never made money for GM.
As GM focused more on high-profit pickup trucks and sport utility vehicles, Saturn began to languish in the late 1990s. But in 2006, it started getting the best of GM’s new models, and executives viewed it as a precursor for GM’s restructuring effort.
After a good year in 2007, sales dropped 22 percent last year as the U.S. market withered.
Sales were off 59 percent for the first three months of this year compared with the same period in 2008. Lajdziak said the brand fell with the rest of the slumping U.S. auto market, but Saturn was hit further due to publicity about its potential sale or demise. U.S. auto sales were down 38 percent from January through March.
Some Saturn dealers have given up their franchises since the company announced last year that it was putting the brand up for sale.