Goodbye Saturn

[Elwood 2000]

This is a case of very poor GM management again at it's finest. This was a company that started with not much, grew into a little and with more help from big brother, could have been the real deal, but was treated like the bastard child. Now it is all about over.

 

Too bad..

 

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The death of a GM dream

By Jeremy W. Peters and Micheline Maynard The New York Times

 

THURSDAY, DECEMBER 1, 2005

SPRING HILL, Tennessee This was the factory that was going to revive the American automobile industry, proving that Detroit could build quality cars and win back buyers who had defected to the Japanese.

 

Built at a time when auto companies were closing plants and cutting hundreds of thousands of jobs, General Motors' Saturn plant here was a rare opportunity for the auto company and its workers to leave the industry's old ways behind and embrace some of the lessons that Japan was teaching, with an American twist.

 

Now, Saturn and its workers are in danger of falling victim to the same fate this plant was designed to avoid. The plant here is among 12 factories that GM plans to shut or partly close, eliminating a total of 30,000 jobs in North America as it tries to bounce back from one of the worst crises in its history. Next year, in a move that presages the end to GM's grand experiment, the company will shut down one of two assembly lines at what is arguably the most famous factory in the country, where workers and managers started out making decisions together at a sprawling complex nestled in rolling farm country near Nashville.

 

GM's short attention span prompted it to neglect Saturn just at the point where it needed more investment. Instead, it poured money into sport utility vehicles and pickups, hoping to outwit the Japanese - only to see them invade those markets, too. And workers here are paying the price. "Workers have got to be asking themselves, what do we have to do?" said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts.

 

"The social contract was that if we build a quality product, we're going to have jobs, our kids are going to have jobs, and the plant will still be in town," he said. "Now, that idea is gone."

 

It certainly looks that way to Mike O'Rourke, who uprooted his wife and three children from Wisconsin to come south. Saturn was the promise of a future he could not find at his old plant.

 

"I still remember the day I gave away my snowblower - I was so happy," O'Rourke, the president of the United Automobile Workers local here, said this week.

 

These days, O'Rourke, who sits in an office with file cabinets plastered with bumper stickers reading, "I (Heart) Saturn" and "Buy American, Buy Union," faces an uncertain future.

 

About 1,500 workers at the plant are set to lose jobs that GM originally assured them were guaranteed. An additional 4,000 jobs at Spring Hill Saturn, the second-youngest plant in the American network of GM, hinge on whether the company decides to give the factory new models to build.

 

These Saturn workers, and others at GM, have learned the harsh reality that building quality cars and cooperating with management are not enough. Like hundreds of thousands of their counterparts at dozens of auto plants shut down in the past, their futures depend primarily on whether their plants build cars and trucks that sell.

 

Saturn workers are not the only ones getting this message. GM also plans to close its well-regarded plants in Oklahoma City and Oshawa, Ontario. Both have won the title of the best plant in North America by J.D. Power Associates, which publishes an annual ranking according to efficiency and quality.

 

GM's chief executive, Rick Wagoner, said last week that he regretted having to shut such well-regarded plants. "It's not an easy decision," Wagoner said. "We don't have many plants that aren't high quality and very productive."

 

But the heartbreak is especially deep at Saturn, where the original promises that GM made its workers when the first cars were built there in 1990 have been slipping away as Saturn's sales have faltered by 25 percent from their 1994 peak, to about 221,000 last year, and the buzz has faded.

 

For a time, the Saturn approach worked. In the early years, owners of Toyotas and Hondas bought Saturn's small cars on the belief that GM had finally matched their vehicles in quality.

 

In truth, Saturns never consistently beat their Japanese rivals in surveys performed by J.D. Power or Consumer Reports, but Saturn's consumer-friendly image and the almost-cult like fanaticism among Saturn owners made it seem as though they did. But now, perception is no longer enough.

 

These days, the best foreign manufacturers can build a half a dozen or more different kinds of cars and trucks at their assembly plants in the United States and Canada, and this allows them to quickly shift production when buyers' tastes change. With its market share eroding, and with $4 billion in North American losses just this year, GM is on a mission to do the same.

 

Becoming more flexible is vital if GM hopes to cling to its position as the country's biggest auto company, said John Paul MacDuffie, an associate professor at the Wharton School of Finance, the University of Pennsylvania.

 

"Toyota and Honda really have a remarkable capacity to put more than one vehicle in a plant," MacDuffie said last week. But, "GM just can't do that," except at a few factories.

 

The Saturn dream died well before the plant. Midway through the 1990s, with Saturn selling just under 300,000 cars a year, plant and union officials were campaigning for an expansion so that the factory could build half a million vehicles a year.

 

Meanwhile, buyers were outgrowing their small Saturns, and with the Toyota Camry and Honda Accord regaining some of Saturn's converts, they pleaded with GM for bigger cars.

 

GM executives, including Wagoner, who was then in charge of North American operations, decided that the $5 billion it spent on Saturn was enough capital investment for the time being. Instead of expanding here, they decided to pour money into developing sport utility vehicles and pickup trucks, which were selling hotly.

 

Thus, there were no new Saturn cars for four years and when GM finally decided to build a midsize Saturn, the production went to Wilmington, Delaware. By the time the Spring Hill plant got new vehicles to build, including a small sport utility vehicle called Vue, Saturn's buzz was long gone and so was its status as a separate part of GM.

[Guest chevydeerhunter]

That's really sad. My wife and I owned two Saturns and the were good vehicles. Like the article states, we just plain outgrew them and went on to bigger and better vehicles. I'm not saying Saturns weren't good, but they were economy vehicles that felt like economy vehicles.

[blue2kzr2]

I wonder which Oshawa plant is closing. Hopefully not one of the W-body plants. If they do, I hope they continue to produce all the W-body vehicles, just in the same plant.

[Chris97K1500]

Saturn will be seeing a increase in sales and products over the next year to 2 years. This April at the NY autoshow, the Aura, new Vue and new midsize SUV will be there. Saturn is expected to be the talk of the show. With the SKY coming, things are looking up for Saturn. Just too bad it took GM this long to actually do something for Saturn. Chris