He’s been called a “competitive cuss,” especially by those who’ve had to go up against him, whether on track or in a business deal. Roger Penske is a take-no-prisoners kind of executive, someone whose basic approach is to outwork, outthink, and out-execute the competition. Now he’s going to have to prove that he can outperform General Motors.
As part of its court-managed restructuring, the automaker will shed four of its eight North American brands. The suburban Detroit-based Penske Automotive Group has inked a tentative deal which would put it in control of what is generally seen as the most promising of that quartet, the Saturn Division, by the end of the year.
“It’s a historic move,” proclaimed Jill Lajdziak, general manager of the Saturn division, who has spent a decade trying to revive the momentum of what was once predicted to be the salvation of GM.
Billed as a “different kind of car company,” Saturn aimed to win back the buyers who had abandoned the U.S. maker in favor of its import rivals. In its original incarnation, Saturn was a virtual company within a company, with its own design, engineering and manufacturing operations. Today, it’s little different than any other GM brand. But when Penske takes over, it will again be a different kind of car company, with little more than some offices and a network of dealers.
At 72, Roger Penske is as active and focused as ever. With his silver mane, patrician good looks and intense — often withering — gaze, he commands attention whenever he walks into a room, even one already filled with automotive captains of industry.
His is a driving edge that was first honed on the speedway. Penske established his first race team in 1961 and was named U.S. sports car driving champion just three years later. He quit driving his own car a year later, but as a team owner, his drivers have taken the checkered flag 15 times at the legendary Indianapolis 500 race. Penske fields teams in a wide range of series, including the Indy Racing League and NASCAR. His participation can make or break an event. After he quit the CART racing series and returned to the rival Indy Racing League, the former series folded.
He is an active manager, easy to spot pacing alongside the pits, two-way headset in place and an ever-present scowl on his face, one that only occasionally transforms into a brief grin when one of his team makes it first across the finish line.
It’s the same way when it comes to business. Though his ventures are almost always transportation-related, Penske has invested in a diverse lot, from the Internet site CarsDirect to Penske Automotive Group, which, with 151 U.S. dealerships and another 101 abroad, is America’s second-largest auto retailing chain.
Admirers, and there are many, are by no means surprised by the Saturn acquisition and see it as a logical step in the Penske empire’s ongoing strategy. Skeptics, and there are a few, caution that “Roger,” as everyone refers to him, is not infallible. Earlier this decade, he walked away from hundreds of money-losing automotive service centers he operated at Kmart stores around the country.
But the failures have been few, noted Dick Dauch, founder of the Detroit automotive supplier American Axle. “He is one of the five most brilliant people I've ever met,'' said Dauch, quickly adding: “He's also a competitive cuss. I tell you, he does not like to finish second.”
While Penske is a careful strategist, he is not one to shy away from a new venture once he makes up his mind. He keeps a cadre of driven lieutenants around him, and even when they’re out of sight, they know to keep the phone close at hand, says a veteran automotive executive, now managing one of Penske’s companies.
“He’s very team-oriented and likes to listen and then take fast action,” adds Lajdziak, who says she will leave GM to stay with Saturn if asked by Penske.
The deal with GM would mark the second automotive brand run by the Detroit entrepreneur. After years of struggling to make a business case for importing its micro-sized Smart car brand to the United States, Daimler AG finally asked Penske to set up an independent distribution venture, which put its first fortwo model into U.S. showrooms in early 2008.
But the Saturn deal will carve out new territory. Independent distribution deals have been around since the dawn of the auto industry. But Penske will actually own the Saturn brand. What he won’t have is a design, engineering and production infrastructure to feed the brands 358 showrooms.
GM has agreed to provide three models — the Aura sedan, and Vue and Outlook crossovers — through 2011, perhaps a bit longer. After that, Penske will have to line up his own sources of product, and he confirms he’s already had preliminary discussions. Industry insiders suggest French maker Renault, and possibly some Asian manufacturers, could be tapped.
Some headlines are dubbing Penske “Saturn’s savior,” and it’s clear that without a buyer, the division would have been closed and more than 10,000 jobs lost. But the hard-headed businessman isn’t one to wear that halo. He’s in it to make Saturn the success it always should have been, he told reporters Friday.
“I would expect that the model that we’re putting together, the distribution model, will be profitable Day One,” he added, during an interview with the Associated Press.
If not, expect to see Penske walk away from a losing venture. But then again, the bigger surprise would be seeing Roger Penske lose. It’s something that doesn’t happen very often.