Death of the Saturn dream

In the glory days of Saturn -- not the planet or the rocket, but the car -- a customer walking into a dealership would be confronted with a big bulletin board covered with Polaroid photos of beaming Saturn buyers, their arms draped around the shoulders of a dealer, sometimes with spouses and kids in tow. If you bought a car, once the papers were signed and a gleaming new sedan or coupe was pulled up to the front entrance, it was your turn to pose, knowing that your picture would soon join the others. You weren't so much buying a vehicle as joining a family.

The great automotive experiment that was Saturn will shut down by the end of this year, when General Motors is expected to sell the brand. It's one of four nameplates the company is unloading, along with Pontiac, Hummer and Saab, as it seeks to demonstrate to the federal government that it's worthy of yet more bailout money on top of the $15.4 billion it has already received. Some of those brands will be mourned more than others, and as the oldest of the lot, Pontiac will probably get the lion's share of the attention. But it's Saturn that has the most fascinating back story -- and that serves as a cautionary tale for GM as it tries to turn itself around.

Saturn was the product of GM's last major attempt to reinvent itself. The trouble started, just as it did this time around, when gas prices spiked in the late 1970s. With their smaller and more fuel-efficient cars, Japanese automakers began carving hefty chunks out of GM's market share. So in 1985, GM's then-chairman, Roger B. Smith, announced the birth of Saturn.

This wasn't just a new line of cars -- it was a revolution. With Saturn, GM was starting over from scratch, completely changing the way cars were built and sold in the U.S. To start with, they wouldn't even be made in Detroit. After governors from across the country descended on Smith's office to plead their case for the Saturn plant, Smith settled on Spring Hill, Tenn., population 1,000. The factory would be completely computerized (a big deal in the mid-'80s), and it would rely heavily on robotic assembly systems.

That automation was a threat to the United Auto Workers, but GM worked out a remarkable agreement with the union. The contract that governed UAW relations with every other GM brand wouldn't apply to Saturn. Work rules that forbade a designated employee from doing any other kind of job were tossed out. Instead of pensions, employees got 401(k)s. Raises were based on productivity and performance, not on a standard negotiated percentage. In return, workers enjoyed unusual collaboration with management in decision-making, received abundant training and were rewarded for success.

The cars, which first appeared in 1990, incorporated surprising innovations, such as plastic panels on the doors instead of sheet metal so they couldn't be dinged up. But what made Saturn special was never really the cars, which were solid but not exceptional. What made them magical was the marketing.

Saturn introduced haggle-free car buying: The price on the sticker was the price you paid. Today that's not uncommon, but it was in 1990. It took much of the stress out of the process and eliminated the often adversarial relationship between buyers and dealers -- by the time the Polaroids were snapped, many consumers really did feel like hugging the salesman. Then there was the 1994 barbecue in Spring Hill, when thousands of Saturn owners showed up to chat with the workers who built their cars. And there was the ad campaign: "A Different Kind of Company. A Different Kind of Car," went the slogan by San Francisco ad agency Hal Riney & Partners. With television commercials featuring pastoral scenes in Spring Hill and focusing on the company's workers, it made buying a Saturn feel like an act of patriotism. This wasn't a faceless GM product, it was friends and family. It was America.

Saturn reported its first profitable year in 1993, and in 1995 it sold its millionth car. But by then, its glow was already fading. Saturn as a corporate organism holds an unusual distinction, having undergone evolution in reverse: It achieved perfection on the day it was born but gradually transformed into something far less.

In the end, the changes Saturn imposed on GM's hidebound corporate culture proved too much. With gas prices down once again, small-car sales slowed and Saturn no longer seemed so important. As a result, upper management began focusing on SUVs and pickups and opted not to invest in updating Saturn's lineup. Its models remained largely the same for nearly a decade while its competitors kept improving. Meanwhile, resentment in the ranks of the UAW simmered, leading to incremental changes in the brand's labor contract that culminated in 2003 when Saturn workers voted for the same master contract in place at the rest of GM.

In 1996, for the first time, a Saturn model was built at an existing GM plant in Delaware, and the cars began sharing components with other GM models. Today, Saturns are no longer built at Spring Hill. Though GM introduced some promising new models under the Saturn nameplate early this decade, for the most part they were simply Americanized versions of GM cars sold in Europe under the Opel brand. In 2008, Saturn sales were down 22% from the previous year, compared with an industrywide decline of 18%. That isn't too surprising given that everything that once made Saturn "a different kind of car" has now vanished.

So what can GM conclude from all of this? For one thing, the company's decision in the mid-'90s to cede the economy-car market to the Japanese while pursuing the more profitable SUV segment left it flat-footed when big cars fell out of favor; that's a move that shouldn't be repeated. And Saturn proved that new ideas, marketing that appealed to the heartstrings and more sensible labor relations could result in products that Americans wanted to buy and a workplace people wanted to join. Finally, it showed that for change to succeed, it has to be sustained.

Saturn may not disappear completely; an Oklahoma City investor group is negotiating to buy it from GM, with plans to sell foreign-made vehicles under the Saturn brand through the existing dealer network. But the Saturn dream died years ago. If GM can't learn from its mistakes, it will too.

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