Renault's Apparent Cold Feet Killed Saturn-Penske Deal, Report Says
November 25, 2009
Just as General Motors was about to seal the deal to sell Saturn to the Penske Automotive 
Group on Sept. 30, French automaker Renault, which had pledged to supply small vehicles to the venture, backed out, an executive involved in the negotiations told a Detroit newspaper.
Tom LaSorda, retired Chrysler president who was helping Penske negotiate the Saturn-Renault deal, laid to rest any notion that it was Penske who wanted to back out of the deal. "Somebody got cold feet" at Renault, LaSorda told Detroit Free Press columnist Tom Walsh, whose article ran in Wednesday's edition.
"We were shocked," LaSorda told paper in his first public comments on the aborted Saturn sale. In fact, little has been said by anyone involved since the deal went sour.
A Deal Unraveled
Having retired from Chrysler after it filed bankruptcy on April 30, LaSorda became a consultant to Penske, which in June announced it was buying Saturn from GM. LaSorda confirmed the speculation that Renault had agreed to supply Saturn with vehicles from Samsung Motors, the Korean automaker in which Renault owns an 80-percent stake, after its supply agreement ended with GM after 2011.
LaSorda said GM's board had approved the sale Sept. 29. Penske had planned a series of Saturn dealer meetings in seven locations the following week. All that was left was the green light from Renault's management.
A joint news statement was drafted for release at 7 a.m. Sept. 30 announcing the official sale of Saturn to Penske. "So we figure everything's fine, everybody's happy, we had the legal documents all done," LaSorda recalled to the Free Press.
But then, "Roger (Penske) gets the call from Renault saying the return-on-investment isn't good enough and they're pulling out," LaSorda told the paper. "How could this be? They did the numbers with us. It wasn't like we invented the numbers. Like, you're doing a deal for 4 or 4 1/2 months and then at the end, you're saying your return isn't any good, when you already agreed to all the numbers with us?
"Somebody got cold feet," LaSorda surmised, "and called Roger and just said 'Sorry, we can't proceed.' " Penske already had spent $3.3 million trying to pull the deal together, according to its latest financial report.
LaSorda didn't comment - and perhaps wasn't asked his response - about the speculation that Nissan-Renault chief Carlos Ghosn nixed the deal in retaliation for GM rejecting a partnership with the French-Japanese automaker a few years ago. In recent weeks, Ghosn was quoted as saying that GM, which was forced into bankrupty this summer, made a big mistake by not doing a deal with Nissan-Renault.
No Plan B
LaSorda said Penske had no back-up plan. Chinese automakers were out because "nobody's ready, there's too much risk," something LaSorda found out at Chrysler when he tried to have Chery develop vehicles and concluded they weren't ready. The currency made sourcing in Europe prohibitive. No Japanese maker wanted to participate.
"And there's nobody else," LaSorda concluded.
Thus marked the end of Saturn. -- Michelle Krebs, Senior Analyst and Editor at Large
Posted by Michelle Krebs at 7:29 AM under Chrysler , GM , News , Personalities | Comments (5) | digg this | Seed Newsvine
it's not so much that "nobody's ready"... let's just stick to the fact that "nobody wants garbage". Until the Americans start to learn and realize that they're no longer the top of the world in business (and in this case, the auto biz), the rest of the world would sit back and watch the collapse.
Posted by: alman08 | November 25, 2009 at 9:09 AM
Nobody ever had any love for Saturn.
Posted by: greenpony | November 25, 2009 at 10:49 AM
I don't want to believe that Carlos Ghosn would deliberately shaft Penske Automotive because of an unrelated hissy fit with a different GM.
I suspect that the business case was fragile and only marginally profitable. Chances are that it fell apart because the investment to bring a Samsung up to US spec, wholesale them to Roger, whereupon they would be shoehorned into increasingly crowded A-B-C-segment markets, compounded with unfavorable exchange rates. That, and the reality that these Penske Saturns would compete head to head with certain Nissan models was maybe a factor.
Posted by: fulcrumb | November 25, 2009 at 12:07 PM
Alman08, what junk?!? They weren't buying cars... they were buying dealership distributions, supplier relationships, manufactuiring facilities. None of that is junk!
Posted by: jemilio | November 28, 2009 at 7:45 PM
^ wow, you're worse than the other guy on here. what really does Saturn has to offer? GM failed as a bunch, and you would want one to think that whatever you mentioned is worth anything? give me a break...
Posted by: alman08 | December 02, 2009 at 8:37 AM