GM says it has ‘multiple’ bidders for Saturn

Thursday, April 16, 2009 at 12:27am
Jeff Green and Katie Merx, Bloomberg News

General Motors Corp. said a group including Black Oak Partners LLC and some dealers is one of “multiple bidders” for the automaker’s Saturn division, as GM cuts back under its survival plan.

The Black Oak group initially would sell GM vehicles through Saturn’s 440 U.S. and Canadian dealers and later might add models from other automakers, focusing on fuel efficiency, according to a statement Wednesday. Steve Janisse, a GM spokesman, wouldn’t identify any of the other potential buyers but said Detroit-based GM plans to update Saturn dealers late this week or early next week.

“There are multiple bidders and they are a diverse group,” Janisse said.

The Saturn brand was born and raised in Spring Hill, where workers made Saturn compacts and crossover SUVs from 1990 until the spring of 2007. The plant has since been retooled for the Chevrolet Traverse SUV.

GM faces a June 1 deadline for a possible government-ordered bankruptcy and is trying to shed Saturn as well as its Hummer and Saab brands. The Obama administration said last month the largest U.S. automaker’s plan to return to profit wasn’t aggressive enough and told it to cut $47 billion in unsecured claims by more than the 59 percent GM proposed in February.

Black Oak, a private equity firm that doesn’t provide financial data or have a Web site, also has investments in banking, oil and real estate, said Jeff Beaver, a spokesman. The group, which didn’t disclose any financial terms, isn’t giving any information on its funding, he said.

The investors want to buy assets including Saturn’s intellectual property and trademarks without assuming any GM debt tied to the unit, said John S. Pappanastos, another spokesman for Oklahoma City-based Black Oak. Dealers would continue to own their outlets, he said.

The Black Oak group would form a new Saturn Distribution Corp. to sell vehicles through the brand’s network and doesn’t plan to build cars, according to its statement.

The group expects to be able to run Saturn profitably with about 250,000 annual sales, said Pappanastos. The division sold 188,004 vehicles in the U.S. last year, a 22 percent decline from 240,091 in 2007. Its sales tumbled 59 percent in this year’s first quarter.

Pappanastos is chief executive officer of Black Oak unit EFG Cos., and is on loan to the investor group. He said that its other members aren’t being disclosed and that more information may be released next week.

GM established the Saturn brand in 1985, five years before selling the first vehicle. Most of the brand’s U.S. dealers are stand-alone outlets, according to GM. Sales reached a peak in 1994 at 286,003 vehicles, according to Autodata Corp.

On March 5, GM said it retained Stephen Girsky to advise the Saturn division and dealers on the process of either selling the unit or spinning it off. If neither option works, Saturn would be closed by 2011.

A letter sent to dealers last month said a plan for Saturn would be completed 60 days from Feb. 18. A task force of dealers is working with Saturn officials on the plan, and GM had been asked to provide the initial funding for the review.

5 Comments on this post:

By: frank brown on 4/16/09 at 6:13

If there are bids, you can bet that they are for 10 to 20 cents on the replacement cost basis. There can never be a revival of the auto industry as long as they have the UAW looking over their shoulder.

By: Dragon on 4/16/09 at 6:42

FTA - The Black Oak group would form a new Saturn Distribution Corp. to sell vehicles through the brand’s network and doesn’t plan to build cars, according to its statement.

So, either GM/UAW will continue to build the Saturn or the Saturn will cease being built. Individual dealers will still own their own dealerships and this group would only control the distribution, intellectual property and trademarks.

By: JeffF on 4/16/09 at 3:57

I would bet that Saturn would Nike their production. The Saturn brand and trademarks would exist on products produced by factories contracted to do so. Saturn could be the in for the Indian and Chinese auto manufacturers. GM may even try to compete for Saturn contracts with any foreign non-UAW facilities. I can see this working better in the long-term than GM own branded dealership network. Saturn dealers have the advantage of not having to compete with other brand competitors AND the 6 other nearby dealers selling the exact same thing. Chevrolet dealers have to compete the those other brands and 15-30 Chevrolet-GMC-Buick-Pontiac dealers in the same area.

By: JeffF on 4/16/09 at 3:58

I may add, closed factories in the US may open under new ownership just to compete for a Saturn manufacturing contract.

By: crankyzoe on 8/18/10 at 3:05

General Motors, is issuing a recall in a horrible timing days away from the anticipated Initial Public Offering of stock. 243,000 of all crossover SUVs in question are within recall. GM recall will affect almost
250,000 vehicles The defect in question is within the second row seat belts. This is the second recall this year, and it could not have worse timing. The repair involved won't be extensive.