Corporate Welfare

On Saturn, People Live To Be 19


How diseased does a community have to be before public health requires the government to wipe it out? It's hip to refer to General Motors as a "cancerous" phenomenon, but in fact GM is contagious: Everything that gets near it turns into failure.

As I noted in June, GM's deal to hand off its Saturn division to the former race car driver and automotive innovator Roger Penske was unlikely to lead to survival for the too-sullied Saturn brand. Yesterday, the second death of Saturn began, as Penske, GM. and Renault Samsung Motors Co. all confirmed that the deal had fallen through and that Saturn production and sales will end as slowly and painfully as possible. At the National Post, Patricia Cancilla has a good analysis of why the arrangement, which would have had Renault do the manufacturing for Penske to sell in the U.S. market, was probably doomed from the start.

Say a fond farewell with this bit of corporate history from MSNBC's Paul A. Eisenstein:

It didn't help that the officials in charge of GM's other brands linked arms and fought hard to prevent the upstart division - billed as "a new kind of car company" - from getting the resources it needed to expand its product mix and attract more buyers.

"We didn't quite strangle the baby," GM Vice Chairman Bob Lutz said, in an interview early this year, "but we told it to go out, get a job and pay its own way."

By the time Lutz joined GM as its "car czar" in 2000 and began shifting resources toward Saturn, it was already a dead division walking, so to speak. Over the past few years, Saturn has vastly expanded its line-up, with products like the compact Astra and Vue crossover winning generally rave reviews. But even the brand's more loyal customers had already largely moved on. By 2008, sales had plunged to an anemic 188,000 units, less than the original Saturn subcompacts alone had averaged. The decline only worsened this year as word spread that GM would abandon the brand.

I would not recognize a Saturn if it ran me over, but the brand showed every sign of becoming competitive, with the above-mentioned loyal customers and policies on haggling and customer service that have (so I'm told, though I have seen first-hand evidence to the contrary) since become industry standards. Saturn was hamstrung by something not mentioned here: It was for girls.

Those "officials in charge of GM's other brands" (and at the UAW, which never liked Saturn Corp.'s more flexible contract) were status-stunted males so disgusted by the idea of innovation that they consciously chose to starve something every normal retailer would give a limb for. Saturn customers didn't just like the product but felt real fondness and familiarity toward the brand. And this wasn't treated as an opportunity to exploit but a problem to be solved.

General Motors isn't the only American company that can screw up a wet dream. It's probably not even the screwup company that is getting the most taxpayer dollars to keep screwing up. But it's the most toxic. What's good for America is the total liquidation of General Motors and the firing of every person, labor and management, who works for the company.