Saturn Case Study Analysis

Topics: General Motors, Automotive industry, Automobile Pages: 3 (1227 words) Published: January 10, 2009
Saturn is a company that prides itself on producing economical, quality automobiles, offering innovation and practicality, which was supposed to give it a high rating of customer satisfaction in its industry. It borrowed many of GM’s strategies and applied them to create a Saturn’s business model. However, things haven't gone as planned. In fact, Saturn has been something of a fiasco. "I view Saturn as a failure," says George Magliano, director of automotive industry research for Global Insight. "It hasn't done what they expected it to do. Saturn has had two or three incarnations, and none of them has worked.” I read two articles on Saturn. Most of the recent articles about the state of the company are 4 to 5 years old. This tells us that the current state of the company or the brand is now just lumped in with GM. The articles gave us a look into Saturn from 2004 until the present time. In 14 years of operation, Saturn has built a gigantic new factory, introduced three all-new models, conducted massive ad campaigns, and cost its parent company billions of dollars. Saturn’s attempt to make low-margin small cars proved totally unworkable, and competition from Japan, and later Korea, has proved to Saturn it cannot be competitive. GM has invested a grand total of $15 billion into Saturn and the division has not turned a profit. Its auto operations in North America and Europe are both in the red, and it has run up unfunded retiree pension and health-care obligations. GM has taken away the special status and made it into a plain division of GM, with the same centralized engineering and marketing as all the other brands. Unlike the original models that were developed by Saturn engineers, not to mention designed by Saturn designers and built in dedicated Saturn plants, the new vehicles are coming from GM's development system and will be built in GM factories. Rick Wagoner, GM's chairman and CEO, likes to say that the simplest way for GM to...
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