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Why the Saturn deal fell through

Alisa Roth Oct 1, 2009

Why the Saturn deal fell through

Alisa Roth Oct 1, 2009


Steve Chiotakis: Saturn is about to go the way of Oldsmobile and Pontiac. General Motors is getting rid of the brand after a deal to sell it fell through. Marketplace’s Alisa Roth covers Detroit and she’s with us live this morning. Hi, Alisa.

Alisa Roth: Good morning.

Chiotakis: GM had already said that it was gonna have to get rid of Saturn, then Roger Penske, the former car driver steps in and says he’s gonna buy it. What was the plan?

Roth: It was actually a pretty clever idea. Penske was gonna create a virtual car company. He’d buy up the 350 Saturn dealerships — and he already owns a big chain of car dealers, so that’s not new territory for him — and then he’d find a car maker to supply him with vehicles.

Chiotakis: And what happened? Why didn’t this work?

Roth: Penske just couldn’t find a partner. He’d been talking to the French company Renault, but this week Renault’s board actually rejected the plan. I talked to Eric Merkle, a car analyst, this morning, and he says Renault’s backing out is what did the plan in for Penske:

Eric Merkle: It’s pretty much a lost cause. There’s really not much he can do with that company without automobiles.

Chiotakis: And Alisa, nobody else was interested in this?

Roth: There were other companies, supposedly a couple of Chinese car makers said they wanted to talk, and some others, too. But Merkle told me that ultimately, Penske probably just thought anything but Renault was too risky.

Merkle: He didn’t feel that any kind of an arrangement like that was solid enough to go forward with the deal.

Chiotakis: So now what?

Roth: GM closes Saturn, 13,000 jobs are lost, Saturn’s 350 dealers get closed down. There are rumors here and there that Penske’ll look for another supplier, but I don’t think it’s gonna happen.

Chiotakis: All right. Marketplace’s Alisa Roth joining us this morning. Alisa, thanks.

Roth: You’re welcome.

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