The intelligent strategists do not always look for opportunities. They assess their global settings, pontificate their options and slowly decide.
While the gathering of intelligence on the strategic disposition of their target is still in motion, they are constantly assessing it. The intelligent strategist always waits for that grand advantageous moment when the circumstance favors them. Conclusively, they pursue it without any emotion and maximize their opportunity to the fullest.
June 6, 2009
Saturn deal is called a new business model
BY TIM HIGGINS
FREE PRESS BUSINESS WRITER
Detroit businessman Roger Penske's move to acquire General Motors' troubled Saturn brand and dealer network could be pioneering -- the start of a new strategy for selling cars and trucks in the United States, experts said Friday.
On Friday, GM announced a tentative deal for Penske Automotive Group to purchase Saturn, a transaction that the companies said should be finalized this fall.
The Detroit automaker will continue to assemble Saturn vehicles for two years, and Penske is talking with other manufacturers about building vehicles that the dealer network would sell.
Jack Nerad of Kelley Blue Book heralded the Penske-Saturn deal as "one of the most significant developments in a month that has been full of significant developments."
"The proposed acquisition marks the beginning of a new business model in this industry," he wrote, "a model in which the distribution side of the business controls the brand, and manufacturing is conducted by one or more sub-contractors."
Penske Group seeks new vehicles for Saturn dealers
Penske Automotive Group is in talks with several automakers about providing new vehicles to the Saturn dealer network.
Penske's deal with General Motors, which has not yet been finalized, provides him with GM-made vehicles for two years.
"We have been in discussions during this diligence period with a number of manufacturers on a worldwide basis," Penske told reporters Friday. "We would expect to have a lineup going forward, which would be manufactured by a worldwide partner."
He expects that eventually the new vehicles could be built in the United States if sales demand it.
The Penske deal is an incredible cap to a historic week in the domestic auto industry, particularly at GM. The automaker filed for bankruptcy protection Monday and announced a deal to sell its Hummer brand Tuesday. By Thursday, word of an impending Penske-Saturn deal had also leaked.
Saturn dealers said they are excited to work with Penske, whose Penske Automotive Group is the nation's No. 2 auto retailer.
"It's phenomenal. Roger is a great guy. I don't think Roger would have got involved in this if he didn't think it would be successful," said Carl Galeana, whose Galeana Automotive Group owns Saturn of Lakeside and Saturn of Warren dealerships. "He rolls up his sleeves and gets work done."
Saturn dealers will be offered a franchise agreement, Penske said. He called the dealer network "one of the best in the business."
"Saturn has a passionate customer base and outstanding dealer network," Penske, chairman of Penske Automotive Group, said in a statement. "For nearly 20 years Saturn has focused on treating the customer right. We share that philosophy, and we want to build on those strengths."
GM said the deal will save more than 350 Saturn dealerships and 13,000 jobs at Saturn and its retailers.
GM's most recent plan called for shutting down the brand at year's end if a buyer couldn't be found.
On a contract basis, GM is to continue production of the Saturn Aura sedan and the Vue and Outlook crossovers. The deal includes Saturn's parts operation.
"We are bringing together two icons: the Saturn brand and the Penske organization," said Jill Lajdziak, Saturn's general manager.
The gray area of the deal is how much control Penske's Saturn will have over the design of the vehicles it sells, said Jeremy Anwyl, CEO of Edmunds.com.
"It's one thing to scour the globe and make deals ... but you didn't really have that much input in terms of the development, design, features, whatever of the product," Anwyl said. "Ultimately, the retail brand is a very nice feature but people are living every day with the vehicle itself and that vehicle has got to measure up with the brand attributes."
On Friday, Penske indicate a desire to keep the Saturn look with future vehicles.
"There's a brand value today in the way these vehicles look," Penske said. "And I would hope that we would have this icon brand value and face across the product line as we go forward."