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Business

GM is restructuring plan is on track

Text by NEWS WIRES

Latest update : 2009-10-11

Auto giant General Motors hopes to wrap up its restructuring plan by the end of the year, chief executive officer Fritz Henderson said.

AFP - General Motors said Tuesday it would wind down its Saturn brand after talks broke off with Penske Automotive Group on a bid for the nameplate.
  
GM said in a statement that Penske "has decided to terminate discussions" to acquire Saturn "because of the inability to source new products beyond what it had asked GM to build on contract."
  
"This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," the US automaker said.
  
As a result of the decision, GM said, "we will be winding down the Saturn brand and dealership network, in accordance with the wind-down agreements that Saturn dealers recently signed with GM."
  
Penske said in a separate statement it had been unable to secure a deal with a car manufacturer to produce vehicles after the expiration of an agreement with GM to make cars on a contract basis.
  
"Penske Automotive Group negotiated the terms and conditions of an agreement with another manufacturer; however, that agreement was rejected by that manufacturer's board of directors," the statement said.
  
"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."
  
Penske agreed in June to acquire the Saturn brand in a deal aimed at saving some 350 dealerships and 13,000 jobs at Saturn and its retailers in the United States.
  
Penske, a big auto dealership operator headed by former race car driver Roger Penske, made the deal shortly after GM filed for bankruptcy protection in a government-backed reorganization.
  
GM was to continue to produce Saturn cars on a contract basis, including the Saturn Aura sedan, and the Vue and Outlook sport utility vehicles.
  
Saturn began selling cars in 1990 as GM created the unit to build inexpensive cars to compete with Japanese automakers. It has sold more than four million vehicles.

Date created : 2009-10-01

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