2 October 2009

The Un-Car No One Loved

Yesterday, the New York Times reported that Roger Penske was not going to save the Saturn brand, and that GM would cease production at the end of this year.

When Assan Motors bought an American car plant, Japanese managers didn’t think American workers were up to snuff.  They lacked the company spirit of their Japanese counterparts and fell well short of volume and quality targets.  But then a dynamic middle manager stepped up, goaded the Americans into doing things the Japanese way. After a montage of baseball, calisthenics, and welding sparks, the Americans are able to produce nearly 15,000 sedate sedans—a cross between Chevrolet Cavaliers and Volvo 240s.  Sure, quality is poor and production is a bit short of expectations but the American pluck and spirit is enough to impress the top brass and keep the factory open.

Maybe Roger Penske could have saved Saturn the way Michael Keaton saved the American factory in the 1986 film Gung Ho. He is something of a hero in Detroit. In addition to his truck leasing business, Penske is the nation’s second largest car dealer with 160 franchises in the US and 150 more internationally. The Penske Group has NASCAR and Indy racing teams and various parts manufacturers. He is behind the return of Grand Prix racing and Super Bowl 40 in Detroit. And when “the new GM” had to get rid of Saturn to keep creditors happy (and survive), Penske said he’d take over. Many observers thought he could rebalance the relationship between dealers and manufacturers by bringing a variety of cars—a Fiat here, perhaps a Chinese compact over there—into his huge network of dealerships. But Penske wanted another company to keep building Saturns after GM wound down production over two years. When a planned Renault-Nissan production deal fell through, Penske announced he was out.


Saturn was born of the same stuff as Gung Ho and the Vapors ’80s hit “I think we’re turning Japanese”—the fear that people whom we once bombed were now kicking our American asses by building better cars than we did. (Didn’t we invent the damn things?) GM management considered the problem of too many Honda Civics and Toyota Camrys showing up in American driveways and identified its underlying cause: GM management. No, that was in the movie version. In real life GM management blamed its unions and its dealers like a poor carpenter blaming his tools.

To escape the Michigan-based UAW and its lousy workers, GM started building Saturns in the Southeast, just as the Japanese and European transplants were doing.  They signed a special contract with workers to encourage Kaizen, harmony, and ultimately market share and profits. To keep its greedy dealers from trying to upsell consumers into more profitable luxury models loaded with options, it set up a whole new dealer network and a no-haggle pricing policy.  It would not be the old GM but “a different kind of car company” building a different kind of car.

The first models were indeed different, boring sedans but but with dedicated engines and platforms along with plastic body panels that resisted dents. Saturn cultivated a very uncultish cult following of sensibly patriotic buyers who wanted more than anything to avoid negotiating with a greasy car salesman.  Indeed just about everything was different except for GM management.  Quality and production efficiency never matched the Japanese, sales did not meet expectations, and within a few years of launching, the differences disappeared and the company was merged into GM’s already bloated production line. GM has been trying to shed capacity for years—it dropped Oldsmobile in 2004 after nearly a century of production—and the US and Canadian governments as major shareholders expect the shrinking to continue with the disposal of Saturn, Hummer, Saab, and perhaps other GM brands.

What is the lesson of Saturn?  The most obvious is that the Big Lie about the legacy costs—retired workers’ pensions and benefits—and the unions being the cause of General Motors’ failure to compete was, well, a big lie. In the months surrounding the company’s bankruptcy it was touted so often by corporate media outlets that it started to seem possible. The workers got fat and happy, killing the company. “GM isn’t a car company anymore,” they used to say on Wall Street. “It’s a health insurer with a side line in cars.” But if you took away the health insurance, it didn’t help.

The other lesson is that people still want cars.  Saturn tried very hard not to be a car. It was a sensible transportation appliance, a wheeled dishwasher, a rolling microwave. Saturn never  came up with a car that was fun to own and fun to drive (though dealers belatedly and briefly got to sell the Saturn Sky, a two-seater convertible that ceased production last summer). Sensible, yes, but there’s simply not enough profit in sensible to keep cars on the American road. Buy a Camry and a bit of the green glow from the Prius rubs off on you; buy a Nissan Sentra and enjoy the hipster vibe of a Cube; buy a Civic and feel the freewheeling fun of a car built by a scooter company. Buy a Saturn and be damned with faint praise: you’ve made a sensible choice.

Gung Ho was a product of the hopeful vision of director, Ron Howard, from Happy Days. Perhaps to some at GM in the 1980s, Saturn was a vision filled with the hope of beating the Japanese at their own game.  Workers got on board, dealers got on board, even many buyers got on board.  But General Motors never really did. Perhaps they didn’t like what the idea of a new and “different kind of car company” said about the old, original kind. So, though the brands it bought over the years may survive—a Swedish buyer has at last been found for Saab, Cadillac has a future—the company’s own initiative has been strangled in its crib.

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  • Daniel Albert
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