Showing posts with label Saturn News. Show all posts
Showing posts with label Saturn News. Show all posts

Thursday, February 27, 2014

GM put off ignition switch recall for years; 13 deaths linked to issue

Every manufacturer has recalls, but when something like this happens, regardless of the brand, it gives the whole auto industry a black eye....

by David Shepardson and Melissa Burden of www.detroitnews.com

General Motors Co. — which Tuesday doubled the size of its recall for older cars with faulty ignition switches that can cause air bags not to deploy in crashes — spent nearly a decade studying the issue and repeatedly opted not to recall the vehicles or pay for potentially expensive fixes.

The Detroit automaker said it will recall more than 1.6 million cars worldwide after reports of 13 deaths and 31 crashes linked to the issue. The decision that came less than two weeks after the automaker insisted it needed to recall only about 780,000 cars.

A chronology of its actions turned over to the National Highway Traffic Safety Administration on Monday showed GM downplayed the ignition switch issue in prior years, including canceling in 2005 an approved redesign of the ignition key head. By the end of 2007, GM said it knew of 10 frontal crashes in which air bags didn’t deploy — linked to the ignition problem — but the automaker opted not to recall the cars.

GM North America President Alan Batey said the company was “deeply sorry” for the issue, a rare apology for the automaker over a safety issue.
All better....
“The chronology shows that the process employed to examine this phenomenon was not as robust as it should have been,” Batey said in a statement. “Today’s GM is committed to doing business differently and better. We will take an unflinching look at what happened and apply lessons learned here to improve going forward.”

GM said some vehicles’ ignition switches weren’t tightened properly. The company said if a heavy key ring is added or the car runs off the road or experiences some other “jarring” event such as a crash, the ignition switch may inadvertently move out of the “run” position. That, in turn, disables the air bags.

GM had initially defended the decision not to recall similar vehicles, suggesting most deaths were at high speeds and that some involved alcohol.

GM issued a dealer bulletin in December 2005 that warned dealers about problems with switches and heavy key rings. It said owners should be advised of the issue and “take steps to prevent it,” such as removing unnecessary items from key chains.

GM didn’t think the vehicles needed to be recalled for years because of the low incidence of problems. It thought the notice to dealers was enough because if the vehicle was accidentally shut off because the ignition key moved, the driver would be able to steer and brake the car.

In a sign of how serious the issue is, both GM and NHTSA urged owners to only use the key for the vehicle when driving, after removing it from the key ring and fob. Dealers will replace the ignition switch. Until repairs are made, GM is urging drivers to use only the ignition key. GM said the first parts will be available the week of April 7.

NHTSA says it is in talks with GM on several issues “including the timeliness of GM’s identification of the vehicle safety defect.”

Clarence Ditlow, head of the Center for Auto Safety, said GM’s apology was unusual. “General Motors made a terrible mistake when it failed to recall these vehicles in 2006 when it knew exactly what the problem was and how to fix it. At least 13 people have died as a result of air bags failing to deploy in the cars covered by the expanded recall. By apologizing, the company is hoping to avoid criminal penalties under the Safety Act and only being fined $35 million, which is the maximum civil penalty,” he said.

Sean Kane, a safety advocate who often works with lawyers who sue automakers over safety issues, said GM had no choice but to expand the recall. “The writing was on the wall. This problem only gets worse for General Motors as time goes on,” he said.

The issue is the latest safety problem to dog the automaker in recent weeks — and it’s the first major issue to face the automaker’s new CEO, Mary Barra.

The recall now covers 1.37 million cars in the U.S. and a total of 1.62 million, including vehicles in Canada and Mexico. Earlier this month, GM said it would recall about 619,000 cars in the U.S.

The issue ranks among the more serious recalls in terms of total alleged deaths in recent years, though is by no means the largest. Over a decade, there were reports of 93 deaths linked to sudden acceleration problems in millions of vehicles, but NHTSA confirmed a link in just five deaths. Last year, NHTSA urged Chrysler Group LLC to recall 2.7 million older Jeep SUVs for fire risks after reports of 51 deaths in rear collisions. More than 200 deaths were linked to faulty tires on Ford Explorers in rollover crashes in the 1990s.

GM said it knows of 31 reported incidents involving frontal crashes that may have been linked to the recall problem, including most where the ignition switch in the “accessory” or “off” position — a factor that may have caused the front air bags not to deploy — including 13 front-seat fatalities.

In the initial recall, GM said it knew of six deaths in five crashes. GM spokesman Alan Adler said after the Feb. 13 recall notice, GM learned of a sixth fatal crash in which two people died. The new recall also includes crashes in Saturn Ions in which five other people died, Adler said.

“We won’t be able to fix all the cars at one time,” Adler said in an interview. “We’ll work with customers on an individual basis.”

GM began investigating the issue in 2004 after receiving a report of an ignition key moving out of place in a 2005 Cobalt and the vehicle losing power. GM replicated the problem in testing, but opted not to fix it “after consideration of the lead time required, cost and effectiveness of each of the solutions,” according to documents GM submitted to NHTSA.

After more reports in 2005 of problems, GM approved a redesign of the ignition key head, but later canceled it.

In late 2005, GM told reporters that the service bulletin to alert dealers to the problem and providing key inserts was enough. GM provided key inserts under warranty for nearly 500 owners.

In 2007, GM employees met with NHTSA to talk about safety systems. NHTSA told GM of a July 2005 fatal crash involving a Cobalt in which the air bags didn’t deploy and the diagnostic module showed the key was in the accessory mode.

GM began investigating the issue and had learned of 10 frontal crashes by the end of 2007; data showed the key was in the accessory position for four of the crashes.

By 2011, GM said its investigators had more examples but didn’t recall the cars because many of the crashes involved high speeds and violent impacts.

Last year, GM began investigating the problem again. GM retained an engineering firm to help investigate and found that the older switches weren’t as strong as ones built after 2010. In October, GM’s supplier turned over records that showed changes had been made in 2006.

Adler said if GM had had all the information back then, “we would have acted differently.”

Jeff Schuster, senior vice president of forecasting for LMC Automotive, said GM could suffer some image backlash with this recall: “There is an indication that they knew that there was an issue and decided not to have a recall.”

GM will notify all affected customers and perform repairs at no charge.

Source;

Thursday, October 1, 2009

End of the road for Saturn as Penske walks away

Deal to save brand falls apart after auto retailer fails to find another car maker to manufacture vehicles once GM stops production.

General Motors Co. (GM-N0.75----%) is killing off its Saturn brand, ending a two-decade-old experiment that involved GM using “a different kind of company” to fight off competition from Japan-based auto makers.

Saturn Corp., the brainchild of GM chairman Roger Smith during the 1980s, was set to be sold to Penske Automotive Group Inc., (PAG-N19.18----%) but Penske walked away from the deal Wednesday.

“Today's disappointing news comes at a time when we'd hoped for a successful launch of the Saturn brand into a new chapter,” GM president Fritz Henderson said in a statement.

The deal fell apart because Penske was unable to find another auto maker to manufacture Saturn models after GM stops manufacturing them early next decade.

“Penske Automotive Group negotiated the terms and conditions of an agreement with another manufacturer, however that agreement was rejected by that manufacturer's board of directors,” Penske said in a statement late Wednesday. “Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction.”

Penske, which is a major U.S. auto retailer and is the U.S. distributor of Mercedes-Benz's smart brand, had planned to take over Saturn's dealership and distribution network in the United States.

GM announced earlier this year that it would abandon the manufacturing and sale of Saturn vehicles as part of a major reduction in its brand portfolio.

It said it was closing Pontiac and seeking buyers for Saturn, Hummer and Saab. Saab and Hummer have been sold, although the deal to sell Hummer to a Chinese industrial company has not closed yet.

Saturn dealers in Canada, which were not part of the Penske deal, have been closing during the past few months.

The brand did little to stem the tide of market share losses that contributed to tens of billions of dollars in financial losses at GM this decade and its ultimate descent earlier this year into Chapter 11 bankruptcy protection after the credit crisis.

The first Saturn rolled off the assembly line in 1990. Sales peaked in 1994 at 286,000 cars annually and were in the 250,000 range for much of this decade.

“It's a national tragedy,” said David Aaker, a professor at the Haas School of Business at the University of California, Berkeley. In his book Building Strong Brands , Prof. Aaker discussed what made the Saturn brand so strong in the beginning. “It was the only organization in the U.S. that really had a quality culture to it,” he said. “A group of people committed to designing and building a quality car. It was unlike anything else any American car [maker] had done.”

Saturn's clustered dealer network allowed for a no-haggle, fixed pricing program, Prof. Aaker said. Since adjacent dealers weren't competing on price, they were able to deliver low-pressure sales tactics and focus on cultivating relationships with customers.

“The result was, they created an incredibly loyal customer base,” Prof. Aaker said. “It was like Harley-Davidson level loyalty, for a car that really didn't look all that different.”

A hundred people started the organization under the slogan, “A different kind of company,” separating themselves from GM and losing job security in the process, Prof. Aaker said. “The culture there was just so strong, and they were blessed with some really fine leaders at the beginning, which was indispensable.”

Consumer pride was also important to the brand.

“But then [GM] made the decision not to invest in the car for 10 years,” he said, and from that point on, it was just a matter of time before the brand was phased out.

The loss of Saturn is a blow to a loyal group attracted to the company's no-pressure sales approach and solid customer service. Gwen Wolansky, an Edmonton resident, bought her Saturn last year after negotiating with other companies.

“I found the Saturn dealer much more relaxing to deal with,” Ms. Wolansky said, adding it was the best deal financially and her cousin and friends spoke well of their Saturns. “No one's said anything bad about them.”

When Ms. Wolansky posted her concerns about paint chipping on a customer forum, she was surprised to hear directly from the company, which provided a contact to help with the paint issue. With the failure of Saturn, she's worried the problem might not get addressed.

“Now there's no incentive for them to keep you as a customer, so who knows,” she said.

Source;
http://www.theglobeandmail.com/globe-investor/end-of-the-road-for-saturn-as-penske-walks-away/article1307636/

Monday, August 31, 2009

REPORT: Penske to close all Canadian Saturn dealers

Well, now we know, Saturn is truly R.I.P. here in Canada.
Roger Penske's purchase of the Saturn nameplate and sales organization from General Motors is intended to make money, and the business case for keeping Canadian dealers is apparently poor. Half of Saturn Canada's 60 dealers had already decided to give up, while the remaining 30 stores were willing to try and keep going. Penske's decision to discontinue sales of the brand in Canada altogether will directly impact 2,000 people.

"Saturn has a passionate customer base and outstanding dealer network," Penske said upon the announcement of his purchase in June. "We want to build onto those strengths," he continued, and the Canadian operation must be more albatross than mint in the scheme of things. Tip of the chapeau to Luc and Pat.

Source;
http://www.autoblog.com/2009/08/31/report-penske-to-close-all-canadian-saturn-dealers/

Tuesday, August 4, 2009

Renault to supply Saturn-badged vehicles to Penske

GM was going to fold the Saturn Brand when Penske swooped in and is proposing a purchase to the rights in the US (not sure what that means to any Saturn dealers here in Canada). As far as I know, Penske has an agreement with GM for parts for the time being with GM ending any development of future Saturn badged GM vehicles. Looks like Penske may have found a suitor for his Saturn 'brand'.
Renault and Penske Automotive Group are working on a parts and car-sharing agreement. However, Nissan will not be working with rival Saturn; it’s strictly Renault that will be entering the alliance. The deal is on the supply of Renault cars to Saturn for the US.

Automotive News says that the deal opens the door to completely new and unique products for Saturn as far as US buyers are concerned. It is believed that another month is needed to seal the deal on Penske’s plan to buy Saturn. No other details have been released however. Saturn spokesman Tony Pordon said that it is also in talks with other carmakers. Penske will have to find a manufacturing partner for Saturn since Penske’s purchase of Saturn will not include any of the manufacturing facilities.

Source;
http://www.4wheelsnews.com/renault-to-supply-saturn-badged-vehicles-to-penske/#more-3423

Friday, June 5, 2009

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

Thursday, April 16, 2009

GM to close down 1,700 dealerships by June 1st

GM has accelerated its restructuring as the impending June 1 deadline approaches along with Chapter 11 speculations.

The carmaker has informed its dealers that it will expedite the close down of about 1,700 dealerships, an insider has said. At present, there are around 200 dealers that were shut down in this year’s first quarter.

Although the closure of such large numbers of dealers was not confirmed by GM officially, a spokesman did confirm GM-dealers meetings. The insider refused to comment on what happened behind the closed doors of the meeting. General Motors is counting on either the demise or sale of Saturn and Hummer. If GM succeeds in getting rid of these liabilities, the dealerships for these brands will also follow. GM can get rid half of the 1,700 dealerships it intends to close from the Saturn and Hummer brands alone. This will mean that there will be no buy-outs for the respective dealers together with those which GM will deem to be underperformers, whose franchise will ends by the first of June. Dealership closures will take place, whether GM goes bankrupt or not. One of the suggestions offered for the survival of the dealers is for them to acquire Saturn.

Source;
http://www.autospies.com/news/GM-to-close-down-1-700-dealerships-by-June-1st-43071/

Thursday, February 19, 2009

Saturn targeted for extinction in GM's plan for survival

Sad times for Saturn dealers, my heart goes out to the families of those working there.
Jim Mateja
February 19, 2009

Roger Smith's dream is officially a nightmare.

The General Motors chairman came up with an idea in the mid-'80s to create a division called Saturn to compete directly with Japanese imports by selling small, low-priced, high-mileage cars.
The first Saturn, the SL, bowed with a 1991 model.

Smith spent $3 billion to develop Saturn. And it did create a halo with no-haggle sales and the flower left on the driver's seat after the car was serviced. It did well early on as evidenced by a 17-day supply of cars at some dealerships in an industry where 60 days is considered normal. It beat expectations by posting a profit by 1993.

But Saturn never realized its potential.

There are those who would attribute that to a lack of love—too few models updated too infrequently.

Saturn also may have suffered from the fact that Smith served as GM chairman when the automaker's market share fell to 30 percent from 40 percent, opening the door wider to Toyota and Honda with their small cars first and leading to their successful luxury divisions.

Smith retired in mid-1990 before the first Saturn came out. No small wonder that GM now plans to sell or fold the division by 2011, ironically after it finally has a strong product mix.

Thank Bob Lutz, who joined GM in 2001, for Saturn's lineup: a high-mileage compact Astra, a nifty Sky roadster, the Outlook crossover with the crucial three rows of seats, the Vue sport-utility vehicle in gas or hybrid flavors, and the Aura sedan, which beat out the Toyota Camry for 2006 North American Car of the Year.

When Lutz announced plans this month to retire at year-end, he said he wanted the division to live long and prosper. But he told Automotive News, a trade publication, that he held out little hope.

"We spent a huge bundle of money in giving Saturn an absolutely no-excuses product lineup top to bottom, [but] the sales just never materialized," he said of a division whose sales slipped nearly 22 percent last year, to about 188,000 units.

Even Lutz professes to be stumped by why Saturn hasn't done well, but he says it's obvious why it no longer has a future with GM.

"We don't have the time or the resources to take 10 years to figure it out and turn it around," he said.

The ailing automaker, which has received $13.4 billion in government loans and is seeking $16.6 billion more, plans to phase out Saturn unless a deal is reached to spin off its distribution network.

With a franchise agreement that sets dealers up as an independent distribution network, it will be easier and cheaper to drop Saturn than the $1 billion it cost GM to kill Oldsmobile in 2004.

There's still talk that the franchise agreement would make the distribution network attractive to a buyer.

"With the rest of the world in a precarious economic state, unless someone from China takes a look, no one is going to be standing in line," said Joe Phillippi, principal of AutoTrends. Jim Hossack, vice president of AutoPacific, is even more realistic.

"Saturn gets its engines, transmission and body stampings from GM, and is so intertwined with GM it couldn't be sold because no one would buy it. Either it gets spun off or it dies of old age like Plymouth did at Chrysler.

"Old age at 18? Well, yes, especially when your only cheerleader is retiring."

Source;
http://www.chicagotribune.com/business/autocorner/chi-thu-saturn-mateja-0219-feb19,0,4757890,print.column