Saturn Car Company's Economic Downturn
Saturn was a hit in the years after rolling out its first car, but dark clouds were gathering. Saturn bowed in 1991 amid huge losses for GM as a whole: $2 billion in 1990, $4.5 billion in 1991, the latter a U.S. business record to that time.
New top-level executives came in during 1992, and though they had GM back in the black by mid-decade, the company's total market share continued to shrink and profits were down. With funding tight, sibling rivalry broke out within the GM family.
As AutoWeek observed in its report on the first Saturn Homecoming in 1994: "General Motors has already poured $5 billion into Saturn, and there are people at places like Chevrolet, Buick, and Oldsmobile…who would frown upon more of their corporation's dollars heading south. They'd like to see their younger sister pull some of her own weight; that's how families work." Trouble was, Saturn had only small cars to sell, and the small-car market was weakening.
In short, Saturn needed more funding and new models, yet other divisions were needy too, and there wasn't enough money to go around. Some observers recommended that GM cut overhead by merging Saturn with Oldsmobile Division, as both were growing ever closer in products and sales practices.
By summer 1995, however, GM decided to delay additional Saturn models and shift development resources to other brands, Olds included. This thinking probably made sense at the time, as Saturn was doing great business. Though sales eased fractionally for calendar '95 to less than 286,000, production for that model year rose 18 percent to a record 303,000.
Saturn's lineup would expand, but the fast-changing economics of the auto business meant future models would share more with other GM cars. Tellingly, Saturn President Skip LeFauve was promoted in 1995 to head all GM small-car programs and "small-car convergence" efforts. GM veteran Don Hudler took over as president and CEO at Saturn Corporation after serving as its vice-president for sales, marketing and service since 1987.
Several changes marked the 1995 Saturns. A passenger-side airbag in a redesigned dashboard allowed manual three-point seatbelts to replace the never-liked shoulder "mousebelts." Multipoint fuel injection added a welcome 15 bhp to the single-cam engine, coupes got mildly freshened faces, and the SC2 sported a new rear panel and spoiler.
A prime rationale for spaceframe construction with bolt-on body panels was to make styling updates relatively easy and cheap, but Saturn said it couldn't afford to redesign the whole car at once, so it focused on the interior first. Exteriors were updated for '96. Sedans and wagons retained familiar cues, but grew slightly longer and more rounded; a newly arched roofline increased sedan head room fore and aft.
But the biggest change was reserved for coupes. After a brief run of '96 carryovers, the '97 models bowed in early 1996 on the sedan/wagon wheelbase to gain a whopping 4.5 inches of rear leg room. All models got additional side-impact protection in advance of 1997 federal standards, plus daytime running lights (inboard of the headlamps), a safety feature spreading throughout GM.
Traction control was now available with either transmission as part of the ABS option. Prices had been creeping up, ranging now from $9995 for the basic SL sedan to $12,695 for the top-line SW2 wagon. Despite the restyle, calendar-year sales slipped 2.5 percent to around 278,600 -- not a good sign.
For more information on Saturn cars, see:
- Saturn New Car Reviews and Prices
- Saturn Used Car Reviews and Prices