GM to close Saturn after Penske pulls out of deal

General Motors has announced that they will close Saturn after the Penske Automotive Group pulled out of negotiations for the brand.  Closing Saturn will result in the loss of 13,000 jobs, and could mean the shuttering of 350 dealerships.

The decision stunned employees and dealers who were unaware of any problems in the ongoing negotiations.

In a statement released yesterday, GM President and CEO Fritz Henderson said that Penske made the decision to end talks with GM not because of either GM, Saturn, or their retail network, but rather it was because of the inability to source new products beyond what it had asked GM to build on contract."

Although GM was going to produce three Saturn models for a transition period, Penske was unable to find a manufacturer to takeover.  In a recently released statement, Penske says they had an agreement with another automaker, but that company dropped out of the deal.

Penske refused to name the prospective manufacturer.  However, Renault Chief Operating Officer Patrick Pelata said today that his company was in talks with Penske, and the two sides were unable to come to terms.

There is also some speculation that members of the board for General Motors wanted Saturn closed instead of sold.  The concern was that a new owner would be able to turn Saturn into a competitive brand.

Still, the closure of the dealerships will cost General Motors dearly at a time when they have precious little available cash.  The company said they will provide Saturn dealers with cash to clear out their inventories and close their franchises by October 2010.

Owners of Saturn vehicles will still be able to have their vehicles serviced at GM dealerships once the dismantling is complete.