Saturn to Realize Gms Turnaround Plan

by : Noah Scott



The Saturn mirrors the future of General Motors Corporation turnaround plan. And last year when GM sales declined by a depressing 8.7%, Saturn came shining through with a 6% sales increase. This coming fall, Saturn, the small brand that call itself "A Different Kind of Car Company" will introduce an all new lineup with models that are less than twenty months old.

What's the significance of this to General Motors? This means that if Saturn will do well in the market with its new lineup of vehicles it might pull the other range of GM vehicles in obtaining higher sales. According to GM vice-chairman for Global Product Development Bob Lutz in an interview at the Chicago Auto Show, "It's a no-excuses product lineup. I told the sales and marketing guys that if this lineup doesn't work, I'm out of ideas."

Saturn was developed in 1990 as General Motors' entry to the small car segment in which Japanese automakers are dominating. The Saturn embodies GM's desperate effort in making itself smaller, leaner, and faster to become more competitive in the market especially with Toyota Motor Corp. hot on its heels.

The year 2006 was not a very good year for General Motors especially with its US sales plunging to more than four million from roughly 4.5 million in 2005. Compared that to the automaker's tough rival Toyota Motor Corporation which reported its best year ever in 2006 with sales increase of up to 12.9% or 2.5 million vehicles.

It is no longer a secret that Toyota is planning to unseat General Motors this year as the largest carmaker in the world but the automaker has vowed to make everything difficult for Toyota. It should be noted that despite the gains that Toyota is receiving it still lag behind General Motors by almost 1.5 million vehicles in the states.

Two years ago, Saturn has become a metaphor for all of GM's problems. The automaker has completely taken for granted the Saturn brand as it focused on big-profit trucks and sport utility vehicles resulting to a lineup of vehicles that are old and tired. Things were further aggravated when gas prices increases and General Motors did not have the car models that can answer such problem fortunately for Toyota they have exactly the range of cars that can provide solution to the ever increasing gas prices. GM lost market share and a possible revenue of $10.6 billion USD for 2005 alone and now the automaker is said to be in the brink of bankruptcy.

Today General Motors is trying to fix itself again through cutting costs, offering early retirement or buyouts to its 34,000 expensively paid hourly workers. And by the end of last year, the automaker was able to cut almost $9 billion in annual costs and saved about $2,000 per car that it produced. It promised to gain a profit in the fourth quarter which if realized will be the first one in two years.

GM also began to replenish Saturn with new models as part of the automaker's new strategy in developing cars globally instead of the usual by region. Saturn is given the Sky roadster which is a sleek two-seat sports car. Also in line are the following: Vue small sport utility vehicle that is available with a hybrid gas-electric version, the Aura mid-sized sedan, the Astra, and Opel-based small car to replace the Ion. The Opel has made its debut at the ongoing Chicago Auto Show.

Lutz said that hopefully the new models will pressure Saturn managers to beat last year's 6% sales increase. "There is now not a weak sister in the batch. Everything is top-notch from a design and execution standpoint." He also added that they will not commit the same mistake again, General Motors is steadfast in improving its other products and that includes its popular line of auto parts like .