The Auto Writer

GM’s Saturn brand is toast and we all know it. But, don’t tell that to a rabid group of enthusiasts who want to keep the brand going even if that means sourcing cars from overseas.

Personally, I think Saturn’s survival apart from GM is a long shot, but if it were to survive, one formula to be considered would be to take Saturn private. Yes, just as Chrysler LLC is privately owned by Cerberus Capital Management, LP so should Saturn be held. But, not by a bunch of equity fund neophytes, rather by  the people who have a stake in Saturn themselves: car dealers.

How To Run Saturn Motors

Given that Saturn is virtually worthless to GM, Saturn’s dealer network should approach Rick Wagoner and company with the following offer:

• We’ll take Saturn off of your hands for $1. Of course, this price would be a bargain for its new owners, but it would save GM millions of dollars in advertising, product development, etc. The company founded by Saturn’s dealer network (I’ll call it Saturn Motors) would be responsible for promotion immediately.

• GM would remain responsible for providing cars for Saturn through 2011, but after that Saturn Motors would be responsible for their own vehicles. Still, I believe the bulk of the vehicles can come right from GM including the next generation Aura, Astra and perhaps the VUE. Saturn would also get permission to negotiate directly with GM’s Opel unit to see which models can be shared. In addition, GM Daewoo of Korea could supply one model.

• It would be great if Saturn Motors could get at least one assembly plant in the US. Wouldn’t returning Spring Hill to Saturn be the ultimate upper? Seeing that GM has excess capacity, what city wouldn’t want to save local jobs, their tax base, economy, etc. by having a fully functioning assembly plant on hand? If Spring Hill isn’t available, certainly someone has a plant. Chrysler and Ford could be tapped as well.

I don’t like the idea of importing cars from China or rebuilding Saturn with a variety of vehicles from various manufacturers. Three or four models would keep Saturn going, even two decent lines would work. Saturn began small and can continue that way — getting big causes all sorts of troubles — just ask GM!

Money Needed To Get This Idea Going

Yes, capital investment would be needed to launch Saturn Motors, so I propose the following:

• Have each existing Saturn dealer kick in $100,000 for their share in the company. Some dealers won’t have the money, so they’ll have to borrow it. But, this option sure beats bankruptcy!

• Invite other stakeholders to jump in, contributing at least $10,000 for a piece of the pie. These are the same people who will make up Saturn’s ongoing customer base.

• Hit up Saturn fans for a small stake, perhaps starting at $1,000. My thinking is that there are a number of Saturn loyalists who would kick in some cash, just to keep the company going.

• Get incentives from local governments to keep dealerships open and to cover the cost of running the assembly plant, distribution center, etc.  Now is the time to secure tax abatements from worried city officials.

• Saturn Motors would need to hire a strong CEO type who has experience running a company, preferably in the auto industry.  This person should work for a small salary (100-250K) to start with bonuses tied to the success of the operation.

A Basic Plan, But It Is At Least Something

Of course, this is just a basic plan that I’m writing off of the top of my head. I realize that there are many different things to consider, something that Saturn dealers are doing right now as they meet with GM management. The federal government can choose to be a partner or a pain for Saturn Motors by waiving certain pollution restriction clauses and other onerous requirements.

If Saturn ends up running its own plant (which it should) then workers would not be unionized. Instead, they’d be paid wages comparable to what Toyota, Nissan and Honda pay their US workers with one small difference:  profit sharing which can be applied to their 401(k) plan.

That’s its for now. If you have ideas of your own you’d like to share, then hit the comment button and fire away.