As you might expect, Saturn dealers are none too happy that Penske backed out of buying Saturn after being unable to secure a commitment from an unnamed foreign manufacturer to provide cars for rebadging. That means unless new money is thrown down the hole into the marquee, 350 Saturn dealerships and (according to a Saturn dealer group) 13,000 jobs will be lost. All they need, according to those same Saturn dealers, is a $250 million cash infusion from Obama’s American Recovery and Reinvestment Act (better known as “the Bailout”).
The dealers also claim that the investment will pay off through preserved tax revenue. I’m no economist, but investing a quarter billion dollars in a cast-off automaker with no source of new cars after GM stops production at the end of this year seems like an iffy bet. Which sucks for the workers, who don’t deserve to be pawns in this little game, but they should be angry at GM and not Penske for bungling the whole thing so badly in the first place. In any event, don’t expect to see a Saturn bailout anytime soon.
$250 Million Will Save Saturn, 13,000 Jobs
DETROIT, Oct. 5 /PRNewswire-USNewswire/ — A $250 million grant from the American Recovery and Reinvestment Act (ARRA), could easily resolve the late breaking issues that prompted the unexpected, last minute collapse of the proposed Penske Automotive Group (PAG) purchase of Saturn, according to Todd Ingersoll, Saturn’s Retailer Council member.
“This is well within the parameters of grants already made through the Act, and will save 13,000 jobs, avoid the closure of 350 Saturn dealerships, and preserve millions in tax revenue,” says Ingersoll. “The Act has millions of dollars allocated for energy projects, including electric vehicle technologies, which is in perfect alignment with Saturn’s historic commitment to distributing environmentally friendly vehicles.”
Recent months have seen a groundswell of support from Saturn Retailers for Penske to buy Saturn – and they continue to urge resolution of the issues that resulted in the deal’s failure. “My phone has been ringing off the hook with Retailers who want to be part of a future with Roger Penske,” says Ingersoll.
The negotiations began in June 2009, when Penske announced his intentions to purchase Saturn. In just four months, the principles of an agreement were reached.
“The challenge of reaching agreement on product sourcing in just four months is exceptionally difficult in the automotive industry, given engineering, design, safety and emission requirements,” explained Ingersoll. “Applying for and eventually receiving a $250 million grant from the American Recovery and Reinvestment Act is a solution that can be a win-win for everyone involved, using taxpayer funds to preserve jobs, maintain tax collections and allow Saturn to further help our economic recovery.”
Since its inception in 1990, the Saturn brand, with its no-hassle pricing philosophy, has made more than 3.4 million sales to legions of loyal customers. Ingersoll concluded: “While the stunning turn of events last week has many asking why, my retailer partners and I are asking why not? Shouldn’t we leverage resources from the American Recovery and Reinvestment Act to finalize the deal with PAG and save 13,000 jobs?”
[Source: Todd Ingersoll, Saturn of Connecticut]