Saturn spirals out of orbit.
Following the 2005 launch of the well-received Outlook full-sized crossover SUV, next up for replacement was the once popular but now fading L Series mid-size saloon. The replacement was introduced in 2006 and called the Aura. This was based on the GM Epsilon platform shared with the Opel/Vauxhall Vectra C and Signum, Saab 9-3, Chevrolet Malibu, Pontiac G6 and Fiat Croma. It was powered by either a 2.4-litre version of the GM Ecotec engine or 3.5 and 3.6-litre V6 units, installed transversely with FWD.
The L Series estate was not replaced, and the Aura was offered only in four-door saloon form. Stylistically, the Aura dispensed with the Saturn family look, closely resembling the Vectra, both inside and out. It also dispensed with the thermoplastic external body panels, another Saturn hallmark, in favour of a wholly conventional construction. Just two trim levels were offered, XE and XR. A mild hybrid version of the former was introduced in 2007, called Green Line. The Aura was manufactured at GM’s Kansas City plant.
Motor Trend magazine tested the Aura in top spec 3.6-litre XR form in October 2006. The reviewer explained that it was now positioned upmarket of its Chevrolet and Pontiac siblings and targeted against top spec versions of the Toyota Camry, Honda Accord and Nissan Altima, for which it was “virtually a match [in terms of] power, smoothness and refinement.” It was “much more stiffly suspended than a Camry and thus more fun to drive.” The Aura was “firm over bumpy roads, but not excessively so.” The power steering was “ideally weighted, providing good feedback and precision.”
The interior was “an improvement over past Saturns, equal to those of the Japanese competition” and featured “vastly improved GM corporate switchgear.” The exterior looked best in side and rear three-quarter views with “a rakish roofline that could almost be that of a four-door coupe” although it looked “stodgier from dead-on front and rear views.”
The reviewer concluded that “most Aura buyers will be drawn to its upper-middle-class elegance and conservative, yet modern style…it won’t set the midsize world on fire [but is] a good step in the right direction.” This was certainly a much more positive reception than the one that greeted the Ion, but Saturn was clearly losing its distinctive identity. If the Aura was ‘elegant and conservative’ and now positioned upmarket of its Chevrolet and Pontiac siblings, was that not encroaching on Buick territory? In any event, its US sales in 2007, its first full year on the market, were an unremarkable 59,964(1) units. This fell well short of its L Series predecessor’s first full year sales of 94,034 units in 2000.
Saturn’s earnestly sensible model range was given an injection of personality and fun in 2006 with the launch of the Sky, a two-seater sports convertible. The Sky was based on GM’s Kappa RWD platform which was shared with the Pontiac Solstice and Opel GT Roadster. The Sky and GT Roadster were identical apart from their badging and all three cars were built alongside each other at GM’s Wilmington, Delaware plant.
The Sky was powered by GM’s ubiquitous 2.4-litre Ecotec engine producing maximum power of 177bhp (132kW) or a new 2.0-litre turbocharged unit producing 260bhp (194kW) and coupled with a five-speed manual or automatic transmission. The turbocharged engine was reserved for the Red Line model which came with a limited-slip differential, automatic stability control, sports suspension and a number of cosmetic enhancements over the base model. The claimed 0 to 60mph (97km/h) time and top speed were 5.2 seconds and 141mph (227km/h).
The Sky was a nice halo model for Saturn’s range but was only a minor contributor to the company’s sales. Saturn’s total US sales in 2007 were 240,091(1) units, broken down as follows:
|Saturn US Sales 2007|
|Ion (compact saloon)||47,873|
|Aura (mid-size saloon)||59,964|
|Vue (compact crossover)||84,767|
|Outlook (large crossover)||34,748|
|Sky (two-seater sports)||11,263|
This was a rebound from the low of 212,017 units seen in 2004, but still short of the historic high of 286,003 achieved right back in 1994 with just a single model, the S Series. This was a very disappointing outcome, especially after the heavy investment in new model lines, and GM began turning the investment tap off.
The Ion was replaced in 2007 by the Astra, a federalised version of the 2004 Opel Astra H, manufactured in Antwerp, Belgium. In similar vein, the second-generation Vue was a federalised version of the Opel Antara, manufactured in Ramos Arizpe, Mexico. Production at Saturn’s Spring Hill, Tennessee plant, the only one operated by the company, was halted after the Ion was discontinued. The plant remained idle for a year from March 2007 while it was retooled(2) to produce the 2009 Chevrolet Traverse. The plant would produce no more Saturn models and became just another GM manufacturing facility.
In the spring of 2008, the US sub-prime mortgage market collapsed. This was to lead to what became known as the Global Financial Crisis, the greatest shock to the economic system since the 1929 Wall Street Crash(3).
General Motors was a substantial player in the huge sub-prime mortgage market, which had proved a valuable source of additional revenue for the company, propping up GM’s vehicle manufacturing core business over a number of years. Suddenly, it was posting alarming losses and forecasting much worse to come from GM’s enormous exposure to the mortgage market. The rapidly developing crisis was threatening to bankrupt the company.
Fuel prices also rose sharply, almost doubling at their peak, and automotive sales went into freefall as consumer confidence collapsed. In the circumstances, Saturn’s sales for 2008, down 22% to 188,004 units, were respectable, and rather better than GM as a whole, which suffered a 28% fall.
GM was running out of working capital and the banks, also engulfed in the crisis, were unwilling to lend. The company limped on into the spring of 2009, when the incoming Obama administration negotiated a rescue plan for GM. The company would be recapitalised, but the deal involved the sacrifice of GM’s underperforming brands: Pontiac, Hummer, Saab and Saturn would all have to be sold off or closed down.
In June 2009 GM announced that it had agreed the sale of Saturn to the Penske Automotive Group. This sale was solely for the rights to the marque name and marketing. GM would continue to build the Saturn Aura, Outlook and Vue for two years while Penske negotiated new manufacturing contracts with other automakers. Penske held discussions with Renault Samsung in South Korea but Renault’s partner, Nissan, vetoed the proposal.
Penske failed to find any automaker willing to take on manufacturing and the deal with GM collapsed in September 2009. GM then announced that Saturn would be closed down the following year. Dealerships would cease trading either when supplies of new vehicles were exhausted, or by the end of October. Despite the uncertainty, Saturn still managed to sell 72,660 vehicles in 2009, but the collapse of the Penske deal reduced sales in 2010 to a trickle, just 6,698 units.
The immediate cause of Saturn’s demise was certainly the impact on GM of the Global Financial Crisis, but the company’s future never looked really secure at any point in its evolution. Despite developing a loyal, if small, customer base, it never managed to expand sales to a level that made the company profitable or sustainable. Moreover, because Saturn’s early models were designed exclusively for that marque and shared almost nothing with other GM vehicles, they could never achieve the economies of scale that made the Japanese models against which they were pitched so competitive.
By 2000, Saturn was estimated to be losing $3,000(4) on every car it sold. By the end of 2004, GM was estimated to have sunk $15 billion into Saturn and was preparing to spend another $3 billion to reinvent it. As a result of that reinvention, Saturn lost its distinctive identity and became just another GM brand, and a superfluous one too, selling a rather nondescript collection of (Outlook apart) rebadged or lightly revised Opel models.
Ultimately, the reason for Saturn’s failure was pretty simple: its own unique vehicles were of variable quality (The Ion, for example, was particularly poor.) and none was ever good enough to beat the Japanese at their own game, so sales never took off in the way GM had hoped. The game was up when, in response to the curtailment of its development budgets, Saturn was forced into ‘badge engineering’ other divisions’ products in the worst GM tradition, thereby losing its USP. The captive imports may have been better vehicles than Saturn’s own designs, but the market had lost interest by that point.
Some of the innovations in organisation and manufacturing that were introduced at Spring Hill were adopted more widely across GM, but the price paid for that, something in the region of $15 billion to $20 billion, and more than twenty years’ lost time when it should instead have been revitalising its core marques, was just extraordinary and unconscionable. This was truly a dismal episode in GM’s long and eventful history
(1) All sales data from www.carsalesbase.com.
(2) The state of Tennessee paid GM substantial grants not to close down the plant.
(3) A more detailed account of the impact of the Global Financial Crisis on GM may be found here.
(4) GM has never released figures for the losses incurred by Saturn. The figures quoted in this series have been gathered from a number of expert observers including the Harvard Business Review and Fortune magazine