GM pulls the plug on Saturn

       General Motors Co 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 revolutionise the way small cars were built and sold in America.
       The deal with Penske was supposed to be finalised on 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 would 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.
       Without another supplier in place before the deal was signed, Penske couldn't run the risk of taking on Saturn, Pordon said.
       It takes several years to design new vehicles or engineer foreign vehicles to meet US standards. Penske would risk having no products to sell once the GM contract expired.
       The Saturn announcement came on the same day GM and Chrysler Group LLC met on Capitol Hill with dealers and lawmakers as talks began on the companies' plans to close around 3,000 dealerships. GM is cutting 2,400 dealerships from its 6,000-dealer network by the autumn of 2010.
       Congress is weighing legislation that could force the automakers to reverse their closure decisions.
       "GM will stop making Saturns as soon as possible, but no lay-offs are expected,"said spokeswoman Sherrie Childers Arb.
       GM had stopped building the Aura mid-size sedan in Kansas City, Kansas,and will not resume assembling them."Production of the Outlook large crossover near Lansing, Michigan, and the Vue small crossover vehicle in Ramos Arizpe, Mexico, will be phased out as soon as possible," she said.
       "Those plants produce products for other brands, and we think we can increase volume on those products that will meet market demand," Childers Arb said.
       "Saturn owners can still go to Saturn dealers for service. They would also be able to go to a certified GM dealer once Saturn dealerships close," GM said.