Saturn Sales Plunge, Company Restructures

Vue was a timely tonic for total Saturn sales, which inched up some 20,000 in calendar '02 to exceed 280,000. But the car side was still slipping, and the 2003 total retreated to around 271,000.

Though that partly reflected the transition to a new small car, the real culprit was the L-Series: down 17 percent in '02, then by 20 percent more -- to just 65,000 or so -- despite facelifted '03s with standard curtain side airbags and detail chassis improvements.

Worse, as Consumer Guide® noted in '03: "A decent mid-size car is now less of a value because Saturn charges extra for ABS and traction control, yet increases base prices…except on the manual-transmission L200…At least the L-Series has been a tepid seller, so lease incentives and low financing rates may be available."

They were indeed, as Saturn was pushing incentives harder than ever, including zero-percent financing with GM's market-priming "Keep America Rolling" promotion in the wake of 9/11. Yet neither that nor later lures could spark buyer interest in the mid-size Saturn, and orders plunged a whopping 70 percent in calendar '04 to less than 19,500.

All were L300s with standard ABS/traction control reinstated and no manual shift offered. Not surprisingly, the unloved L-Series faded away during model-year '05, when only an unchanged V-6 sedan was available with far fewer options. Just over 5000 were sold.

Saturn by now had a capable new leader in Jill Lajdziak. She reported both to G. Richard "Rick" Wagoner, named GM chairman and CEO in 2001, and to the celebrated "product czar" he quickly brought aboard, former Chrysler Corporation president Robert A. Lutz.

Lajdziak enjoyed rather less freedom than her predecessors, however. Bit by bit, Saturn was losing its independence, a shift highlighted by the untimely death of former president Skip LeFauve in January 2003. As Automotive News observed at the time, "LeFauve's Saturn organization [now] looks noticeably different. Decision-making is often conducted higher in the GM organization, and Saturn operates more like a standard GM division with traditional GM practices."

But tightening Saturn's orbit was necessary in light of a worsening financial crisis that would have GM on the brink of bankruptcy by 2006. With Oldsmobile already being phased out as a recovery measure, Business Week wondered whether struggling Saturn might soon be dumped, too. "That is out of the question," Lutz told the magazine in mid-2003.

Three years later, Lutz revealed an entirely new game plan for Saturn. From here on, most of the brand's core products would be rebadged versions of select Opel models designed and engineered at GM's German subsidiary. The aim was to save money and get out new product more quickly through the closest ever collaboration among GM's worldwide business units.

The pattern, Lutz said, was the British Vauxhall branch, which had been building and selling retrimmed Opels for years. Saturn might advise Opel on design tailoring for the American market, but innovation was no longer a part of its brief. Even Spring Hill was increasingly seen as just another plant supplying all GM makes, not just Saturn.

A tangible early sign of Saturn's shifting status was the 2003 Ion, the belated successor to the subcompact S-Series. This was the first in a planned global family of GM small cars on the new front-drive Delta platform conceived largely by Opel. Ion styling was Saturn's own, however, and plastic was once again used for the front fenders and outer door skins, though the inner structure was a conventional steel unibody.

A simple twist-beam axle replaced the S-Series' tri-link rear suspension to keep cost down. Antilock brakes shifted to the options list, but now included traction control. Curtain side airbags were newly available, a plus for Saturn's safety-minded clientele and for the small-car field.

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