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GM's Saturn Unit Falls Back to Earth; Slated for Overhaul

December 18, 2003

Thirteen years after General Motors Corp. introduced Saturn, the small-car venture that was designed to neutralize Japanese competitionin the United States, the subsidiary is getting an overhaul, according to Bloomberg News.Suffering from slow sales and steep financial losses, Saturn will soon become just another GM vehicle nameplate, Bloomberg News said, operating in the same manner as Cadillac, Buick and other brands.GM executives have promised to invest in newSaturn models only if the division can be folded into the company's worldwide operations without the special conditions it received upon its inauguration, Bloomberg News said.Through November, sales of Saturn vehicles totaled 251,994, a 2.6 percent decline from the first 11 months of 2002. GM doesn't post Saturn's financial results separately. The company says Saturn lost money in 11 of its past 13 years and that losses in the past yearor so have topped $1 billion, according to Bloomberg News.Even Saturn's distribution and retailingpolicies differed from those of Buick, Cadillac and others. Dealers agreed to sell Saturns according to a one-price, no haggle policy, which customers said they appreciated. But Saturn ultimately failed in its mission, mostly because the subcompact cars never won much recognition for quality, performance or durability, Bloomberg News said.The brand has won supporters, though, especially those customers who love the hassle-free environment of the dealerships, according to Bloomberg News. GM would like to add new Saturn dealers and double sales within a few years. "Saturn's going to be fine," said Bob Lutz, GM vice chairman. "We no longer have the luxury of keeping Saturn separate."
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