GM to close Saturn as sale to Penske collapses

DETROIT (AP) — General Motors Co. (GM) will shut down Saturn now that a deal with former race car driver and auto dealer magnate Roger Penske has collapsed, marking the end of a brand that was supposed to revolutionize the way small cars were built and sold in America.

The deal with Penske was supposed to be finalized Wednesday. But the unexpected end came when his company, Penske Automotive Group Inc., was unable to find a manufacturer to supply vehicles for the brand’s dealerships. GM had agreed to keep building Saturn models like the Aura, Outlook and Vue through at least 2011, but after that, Saturn would have to come up with its own products.

Penske’s tentative deal buy Saturn was announced in early June.

“This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality,” GM CEO Fritz Henderson said. He said Saturn and its dealership network will be phased out.

Although the sales price was never disclosed, Penske was to get Saturn’s roughly 350 dealerships and promised to retain 13,000 employees.

Penske spokesman Anthony Pordon said the company had reached a tentative deal with another automaker to make cars for Saturn, but that company’s board of directors rejected the agreement. He would not identify the other automaker.

Pordon said there is little if any chance that the talks could be reopened.

Shares of Penske fell $1.89, or 9.9 percent, to $17.29 in after hours trading as PAG’s expansion attempt failed. Shares rose $1.32, or 7.4 percent, to $19.18 in regular trading Wednesday.