Saturn loyalists left in limbo with auto bailout

In exchange for its share of a $14 billion auto-industry rescue package, General Motors Corp. has promised Congress it would retool its business plan.

But Saturn customers and 425 dealerships -- including five in the Pittsburgh area -- worry GM might sacrifice the Saturn brand in the process. Why? The division launched in 1985 as "a different kind of car company" has never made money.

"Would we miss it? Absolutely," said Steve Lelich, chief operating officer of Day Automotive Group in Monroeville, which sells 22 brands in the area, and has three Saturn dealerships.

"We've had a loyal customer base in Western Pennsylvania over the years, and it's tough to turn those people away," said Lelich.

Allene Byrnes of Carrick is one of them. She bought an SL2 sedan in 2002 and hopes to replace it with a new Saturn next spring.

"It's a good car. It's very dependable," said Byrnes, 47, as she waited for her Saturn to be serviced at Saturn of West Liberty in Dormont. "I've had six cars, all different brands. And this one's lasted the longest."

GM launched Saturn to compete more effectively with scrappy Japanese imports such as Honda and Toyota in the late 1980s. Saturn cars were aimed at cost-conscious buyers who wanted good vehicle value without haggling with salesmen.

In a Detroit radio interview last week, GM's North American Sales Vice President Mark LaNeve, a Beaver Falls native, called Saturn "a great brand with great dealers." But the division had "a very tough time making money because of its low price points."

With Saturns priced as low as $12,000 in years past, GM could not cover its costs. So the brand took on fancier features and bulked up -- in size and sticker prices. The average Saturn vehicle costs about $24,000, including the big Saturn Outlook sport utility vehicle.

Sales of Saturn vehicles nationally have plunged 20.9 percent through November compared with a year ago. That's significantly higher than the U.S. auto industry's 16 percent drop.

In the Pittsburgh region, Saturn sales are projected to fall from 2,185 units in 2007 to 1,768 this year, a market-share dip from 1.6 percent to 1.4 percent, according to estimates from the Greater Pittsburgh Automobile Dealers Association.

Meanwhile, GM, Ford Motor and Chrysler await a Senate vote on the $14 billion rescue package passed by the House late Wednesday. Some legislators -- and consumers -- think the automakers should declare bankruptcy and wring concessions from creditors and workers before getting federal aid.

"I'm not in favor of bailing them out because you have to hold businesses accountable for what they do," said Jim Krandel, 51, a Saturn Vue owner in Bethel Park. "But if GM keeps the brand, I look forward some day to buying another Saturn."

GM said it will either: Sell the Saturn brand, such as it's trying to do with Hummer; fold it into other GM brands, such as Chevrolet; or simply eliminate Saturn, such as GM did several years ago with Oldsmobile. But the Olds exit cost GM about $1 billion to buy out dealers, and Saturn could cost about $1.7 billion, say industry experts.

"We recognize there's some uncertainty in terms of GM's business," said Calvin Lane, director of sales at #1 Cochran, the region's largest GM dealer, including two local Saturn dealerships. "But we are optimistic in terms of the restructuring and Saturn's role in it." He declined to discuss sales volumes.

Day Automotive's three Saturn dealerships in the area have experienced a 12 percent decrease through November, said Lelich, versus the 20.9 percent drop nationally.

"The Pittsburgh market holds up a little better than the national averages," said Lelich. "We actually weren't having a bad year until October and November."

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