Today on Wheelhouse we’re talking Saturn; not the planet!
The Company!
Why the company was started, their ambitious plan to change the game, and how it all came
crashing down.
It’s a sad story of forward thinking, wasted potential, and self-sabotage.
This is the truth about Saturn.
In the 60s, gas was cheap, so American car companies paid no attention to fuel economy.
But that thinking had to change in the 70s, when the oil crisis made gas prices skyrocket,
and sent consumers looking for more efficient options.
American consumers started taking Japanese companies like Honda and Datsun more seriously,
and by proxy, so did Detroit; which for years had been completely underestimating their
eastern competition.
Domestic manufacturers were simply not great at making small, economical cars at this point.
While cars like GM’s 70’s-era Vega and Chevette sold well, it was almost a universal
consensus that the Japanese did small cars better, and soon, cars like Honda’s Civic
and Toyota’s Corolla were dominating the compact car market.
In the boardrooms of GM, a plan was being...planned.
They didn’t want to make more small cars under their existing brands, because they
thought customers might think of them as cheap runts of the lineup.
So they had to build an entirely new car company from scratch.
In 1982, GM VPs Alex Mair and Robert Eaton began work on the project.
It would eventually be named Saturn, after the rocket which carried America to the moon,
winning that other great race that set the world’s pace and earned us the top place
in the galactic starchase, the Space Race.
General Motors hoped that the totally new company would overcome any negative brand-associations
buyers had with small cars and American companies.
And when I say “totally new company”, I mean it was totally new: new car design,
new engine, new production plant, new workforce, new dealers, and even new ways of producing
the car in the first place.
What made Saturn completely different from its competitors was the ownership structure
between management, engineers, and the factory workers.
In other GM brands like Chevrolet and Pontiac, the Management would tell the engineers what
to build, the engineers would draw up the design, and the factory would build the bureaucracy-approved
product without giving input on what they were making.
But at Saturn, the dynamic would be a little different, and had potential to change the
auto industry forever.
Major decisions at car companies are usually made from the top down, but at Saturn, the
United Auto Workers union now had a huge input on their car’s design, meaning that people
working on the factory floor could tell the engineers and management what would and wouldn’t
work.
This shared ownership of Saturn between everyone involved had an interesting effect on the
workplace culture:
It turns out if you listen to your employees and make them feel like their voices matter,
they give you their loyalty and productivity increases.
GM set up the Saturn factory in Spring Hill, Tennessee, far outside the influence of Detroit.
People were excited!
Spring Hill is a small town outside of Nashville, and General Motors is going to build a factory
here?
Making completely new cars?
Awesome!
I remember when we finally got a movie theater my senior year, this Factory must have been
at least twice as exciting as that.
The car that Spring Hill would produce was dubbed the “Saturn S-series”, with sedan
models named SL, and the SC coupe.
The largest departure from traditional car design used on the S-series was the use of
a space-frame design.
This design, which takes structural and crash load off of the side panels, meant that Saturn
could use their signature dent-resistant plastic body panels instead of metal
even though the SL and SC were made to compete with Japanese cars, they didn’t
have the tech of their eastern competitors, so GM based all of their marketing around
the fact Saturns were built in small-town USA.
GM was banking that would see how Saturn was doing things differently, and that they would
want to get in on that excitement.
In fact, Saturn’s slogan was “A New Kind of Car Company.”
This fresh approach went all the way to the showroom as well: Saturn dealerships were
haggle free, meaning the price you saw was the price you paid.
And when you bought your new Saturn, dealership employees would give you applause as you got
in and drove away.
It honestly looks like a cult
People loved their Saturns.
The company even hosted a ‘homecoming’ at Spring Hill where thousands of Saturn owners
from all over would meet up and party at the factory.
GM had successfully marketed an American small car, a feat unheard of just ten years earlier.
By the end of 1995, Saturn had built over a million cars in it’s short 6 year history.
But the good times wouldn’t last forever.
While the S line was updated
three times during its life, there was no escaping
that Saturn only really had one car to sell.
This stagnation, combined with the fact that the “new company” shine had worn away,
meant that Saturn sales were slowing down
While new cars were needed, GM was a bit strapped for cash, and couldn’t afford to design
a totally new, unique vehicle for Saturn, like the S-Series.
In fact, GM would never be able to design a unique Saturn again, making the S-Series
a bit of a unicorn.
Instead, GM would dip into it’s parts bin from around the world to make future Saturn’s,
and the first car to emerge from this corporate rummage was the L-series, introduced as a
2000 model year.
The L was basically a rebadged Opel Vectra, which sucked.
Sensing a shift in the market, GM execs decided Saturn also needed a crossover SUV.
The Saturn Vue debuted in 2002, and was a rebadged Chevy Equinox, which was another
rebadged Opel.
GM had created Saturn to operate in a way that wasn’t like GM.
But now, General Motors was forcing Saturn to act like General Motors.
Saturn had always been the oddball in GM’s lineup.
And while it’s employees were happy and customers loyal, neither of those things meant
new sales, and that meant no money coming in.
GM had yet to get a return on their investment in Saturn.
They had spent nearly five billion on development and the Spring Hill facility.
Since GM was a little light in the wallet, that meant Saturn was in the crosshairs of
the cost cutters.
If Saturn didn’t start making money soon, it would mean bad news.
Following the release of the VUE and the L-series, Saturn would finally kill of their watershed
S-series in 2002.
The Saturn ION would be introduced in 2003 to replace it, and shared its Delta platform
with many GM cars, including the Cobalt.
Despite introducing three new vehicles for the new millennium, Saturn remained fairly
small-fry in the industry.
Their promise of a haggle-free experience still proved to be attractive, however the
market was no longer theirs alone, as Toyota had introduced Scion and their no-haggle price
models in 2003.
This competition, combined with a steadily worsening economic situation would combine
to hit Saturn hard.
Very hard.
By 2005 Saturn was in chaos, unable to make any money on it’s own.
Competition within and without GM was stifling the now-stale brand.
The company was out of options and completely resigned itself to selling a lineup made of
all rebadged vehicles.
Two years later, Saturn introduced all new vehicles, with everything except the Vue getting
replaced.
The new line included the Sky, which was Saturn’s first interesting car since their debut.
But it was also just a rebadged Opel, and didn’t sell on top of that.
Nothing could save Saturn, as the economic recession that struck the US in 2008 created
a dire situation at GM.
To save General Motors, the government provided assistance in the form of their now-famous
“bail-out” package, on the condition that the plethora of companies GM owned and sold
cars under be paired down
So how did it get so bad?
A 2010 lawsuit found that Saturn’s Vice president and General Manager Jill Lajdziak
didn’t know whether or not Saturn was making money.
She said that in a deposition Under Oath.
To a lawyer.
And she wasn’t the only one, their CFO Edward Toporzycki said he didn’t know Saturn’s
financial condition while he was involved with the company.
He’s the CFO!
FInancial is in his title!
So in 2010 three GM companies, Pontiac, Hummer, and Saturn, all closed their doors, producing
their last car, probably for good.
While General Motors ended up surviving the recession, their grand experiment in “a
new kind of car company”, which they called Saturn, did not.
I think Saturn could have been great if GM had let them stay true to their mission.
They created Saturn to be a new kind of company, and at the start, they were.
What doomed this company that GM created to run differently, was that GM ran it like GM.
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Do you own an SL or SC?
Do you like it?
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Wear your seatbelt, see you next time.