GM Plans to Close Saturn after Penske Deal Falls Through -

GM Plans to Close Saturn after Penske Deal Falls Through

Penske Automotive Group is ending talks to buy Saturn from a struggling General Motors this week. This comes just as the deal was expected to be finalized.

GM's President and CEO said in a statement:

This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality. PAG's announcement explained that their decision was not based on interactions with GM or Saturn retailers; rather it was because of the inability to source new products beyond what it had asked GM to build on contract.

Fritz Henderson continues by saying:

As a result of PAG's decision, we will be winding down the Saturn brand and dealership network, in accordance with the wind-down agreements that Saturn dealers recently signed with GM. Pursuant to the terms of those agreements, the wind down process will be determined and communicated shortly.

Saturn customers and owners will continue to be able to purchase and have their vehicles serviced at Saturn retailers during this process. Once the wind down is complete, Saturn owners will still be able to have their vehicles serviced at other GM dealerships. We will be communicating with our customers very soon to explain the next steps in this process.

Local dealerships either chose not to comment on camera or did not call me back. Two told me off camera that they were in "shock." They are sorting through the details themselves right now.

Penske Automotive Group also provided a statement, saying in part:

The company had negotiated a definitive agreement with GM to source vehicles on a contract-manufactured basis for a period of time. After this period, the company would have been required to source vehicles from another third party under a similar contract-manufacturing agreement.

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. 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.

Since Penske does not manufacture cars (just distributes), it is not moving forward with the deal.

Penske did not name the manufacturer, but the Wall Street Journal reports Renault may have been the manufacturer.

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