Monday, May 04, 2009

Saturn to leave GM Orbit

GM Stock Chart

Obama says Americans want cars that go far on a gallon of gas. He says Detroit, especially GM, has suffered because it failed to build those cars, the cars Americans really want. Instead, he says Detroit made big cars hoping for big profits, and is now suffering for its poor strategy.

Really? If that's true, why would GM -- the old General Motors, known today as Government Motors -- seek to sell a division that produces cars getting better than 30 miles per gallon? Furthermore, Saturn sells its cars at low low prices. High mileage, low price. Sounds like the right combination for today's car market. Why is GM dropping Saturn?

If the auto world operated the way Obama believes, Saturn would be GM's most valuable property. The last division it would want to lose. Maybe Obama believes Saturn is the company's most valuable property and its sale will raise enough money to pay down a big portion of the company's debt. But what would replace it at GM? The Chevy Volt?

The Volt is an electric vehicle that is already an obvious failure. Nevertheless, Obama wants to give large subsidies to buyers willing to buy a car with a $40,000 price tag and a battery range of 40 miles. The subsidy given to Volt buyers is in addition to the subsidies already given to companies building wind generators and solar panels. Despite the subsidies to these bit players in the production and consumption of electrical energy, the electric alternatives are financial failures. Even if our anti-oil president imposed taxes on gasoline that returned prices to last year's peak, electric vehicles, wind generators and solar panels would fail to compete with oil, the greatest vitamin this economy has even taken.

GM retains adviser for Saturn sale

General Motors retains adviser to evaluate offers for sale of Saturn brand

On Monday May 4, 2009

DETROIT (AP) -- GM says it is retaining a former company adviser to help it review potential buyers for its Saturn brand. The automaker says several parties expressed interest in buying the brand and its dealerships.

General Motors Corp. is hiring S.J. Girsky & Co. to manage the transaction. The firm is run by Stephen Girsky, who spent less than a year as a full-time adviser to GM, leaving in June 2006. Prior to GM, Girsky ran Morgan Stanley's auto research team.

GM is looking to sell or phase out Saturn by the end of the year as it races to a June 1 deadline to restructure. Among the bidders for Saturn is a group led by Oklahoma City private equity firm Black Oak Partners LLC.

Detroit-based GM began selling Saturn vehicles in 1990.


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