First off, he won’t own any manufacturing plants. Saturn will continue to buy today’s vehicles from GM for at least two years. Penske will talk to other auto manufacturers in Europe and Asia about supplying new products after that. “We are going to be a sales, service, and marketing company, not an OEM [original equipment manufacturer],” he said. Eventually, Penske explained, he wants at least some Saturn vehicles to once again be manufactured in the U.S., though that may not be the case in the short run after the agreement with GM runs out.
I thought Saturn was the worst management failure at GM, among many (NUMMI, and GM’s Failure to Manage Effectively, for example). They really did some great things early on with rethinking the system of manufacturing and selling cars. But GM failed to take care of the innovative division. I hoped that Saturn would gain a new, better, management that build Saturn toward the potential it has. Contracting out manufacturing however, is a horrible idea, I believe. Unfortunately I think this ends the hope for a great Saturn.
Saturn still have the potential to do ok, given how bad the dealership experience is for most other companies. The dealer experience, even for Toyota and Lexus is still not at all congruous with the customer focus principles of lean (for example, motivating sales people to make as bad a deal for customers as they can – paying them more the more they get for the dealership at the expense of the customer). And other car companies have quite a bit to learn from the sales practices of Saturn and Car Max.
Related: Big Failed Three, Meet the Successful Eight – Honda has Never had Layoffs and has been Profitable Every Year – People: Team Members or Costs – Invest in New Management Methods Not a Failing Company, 1986