(Adds details on GM winding down Saturn brand)
DOW JONES NEWSWIRES
General Motors Co. said Wednesday that it would wind down its
Saturn brand after the last-minute collapse of plans to sell the
niche brand to Penske Automotive Group Inc. (PAG).
Penske, which runs a network of U.S. auto dealers, said a deal
to source cars for sale under the Saturn brand after GM ceased
production had been rejected by its prospective manufacturing
partner, which people familiar with the situation identified as
Renault SA.
Roger Penske, the former racing driver who heads the group, had
pursued what the industry viewed as a bold experiment in
outsourcing manufacturing.
Shares in Penske were recently down 9.7% at $17.33 in
after-market trading.
GM did not say when it would wind down Saturn, one of the brands
earmarked for closure or disposal in its post-bankruptcy
restructuring plan. It said existing Saturn owners would be able to
have their vehicles serviced at GM dealers.
The company described the collapse as "disappointing." People
familiar with the situation said a deal was due to be announced as
soon as Thursday, and Penske had already distributed new franchise
agreements to dealers.
The deal called for Penske to initially acquire vehicles from GM
but eventually branch out to sell products from Renault SA (RNO.FR)
and its Samsung Motors unit, which is based in South Korea. Penske
Auto said Wednesday that it negotiated a supply agreement with
"another manufacturer," but that company's board rejected the
deal.
"Without that agreement, the company has determined that the
risks and uncertainties related to the availability of future
products prohibit the company from moving forward with this
transaction," said Penske Auto.
Saturn has 350 dealers and the Penske deal was seen saving some
13,000 jobs. The dealers had pressed GM to seek a sale after the
auto maker initially planned to phase out production.
-By Kevin Kingsbury and Doug Cameron, Dow Jones Newswires