GM to sell Saturn to Penske

Penske Automotive Group, owned by racecar legend Roger Penske, will buy GM's castoff brand.
NEW YORK (CNNMoney.com) -- Bankrupt automaker General Motors Corp. announced Friday that it will sell its Saturn unit to car dealership operator Penske Automotive Group.

Penske (PAG, Fortune 500) is owned by former race car driver Roger Penske, who owns NASCAR and IndyCar racing teams. The deal would give Penske the rights to the 19-year old brand, but GM would continue production of Saturn's three highest-selling models, including the Aura sedan, and the Vue and Outlook cross-over SUVs.

The deal, which GM expects to be completed in October, would save more than 13,000 jobs at Saturn and its roughly 350 dealers nationwide. All of Saturn's dealerships sell only Saturn vehicles, so they are reliant on the brand's continuation for their survival.

"There has been a groundswell of support for Saturn, with our retailers and owners urging us to save the brand," Jill Lajdziak, Saturn's general manager, said in a statement. "We heard their call loud and clear, and it inspired us as we worked to secure Saturn's future."

Penske said he wants Lajdziak to stay on at the company, and he offered former Chrysler President Tom LaSorda a top spot at Saturn, according to the Detroit News. Penske hired LaSorda in May as a consultant for the Saturn deal.

The sale is part of GM's strategy to shed its four "non-core" U.S. brands -- Saturn, Hummer, Pontiac and Saab -- as it restructures the company.

On Tuesday, GM (GMGMQ) announced a deal to sell its Hummer line to China's Sichuan Tengzhong Heavy Industrial Machinery Company Ltd.

The Saturn brand has been highly rated in customer satisfaction surveys for its no-haggle policy. Though Saturn sales have slumped badly this year, the brand actually far outsold Buick and Cadillac in 2008, when it was GM's fourth highest-selling unit. GM has sold more than 4 million Saturns since 1990.

"Saturn has a passionate customer base and outstanding dealer network," Roger Penske said in a statement. "For nearly 20 years Saturn has focused on treating the customer right. We share that philosophy, and we want to build on those strengths."

GM has said it would stop producing Saturn vehicles by 2011. Penske is in discussions with several global automakers to add to Saturn's lineup over time, including Renault Samsung Motors of Korea, according to Automotive News.

Penske Automotive currently sells over 40 brands at its 310 dealerships, half of which are in the United States. Shares of Penske rose 3% in morning trading.

--CNNMoney.com senior writer Peter Valdes-Dapena contributed to this report.

Source;
http://money.cnn.com/2009/06/05/news/companies/saturn_penske/?postversion=2009060510