Penske Races To Save Saturn From GM's Scrap Heap

Roger Penske, who made his name in auto racing and has built a considerable auto empire, is expected to buy Saturn and the dealer network from General Motors.

The deal is expected to be announced later today.

It's a risky move on Penske's part, but one that I think will pay dividends down the road. Penske is more apt to take the racing experience and put it into the cars than General Motors.

A sale also would free Saturn from speculation about the brand's future that dealers complain has depressed sales since GM announced it would be either sold or phased out later this year.

"We're pretty excited to get that cloud removed," said Dan Jonuska, a Saturn dealer in Scottsdale, Ariz. "The cloud can go away and park anywhere it wants but right here."

GM would not confirm that a sale is imminent, nor that Penske is the likely buyer. A Penske spokesman did not return calls seeking comment.

"Negotiations are literally going around the clock and we hope to have something to announce soon," Saturn spokesman Steve Janisse said.

It was unclear whether Saturn's leadership team, including General Manager Jill Lajdziak, would be part of the deal.

The Saturn negotiations involve pairing parties interested in Saturn's network of about 380 dealerships with one or more auto manufacturers interested in supplying vehicles that could be sold under the Saturn name.

Saturn had narrowed the list of potential bidders from about 12 to "two or three," according to a source familiar with the talks. At least one of the finalists is considering using Mitsubishi, and possibly other manufacturers, to provide vehicles, a source said.

GM hopes to conclude a deal by the end of September.

Penske has confirmed he is interested in acquiring Saturn's dealer network. Penske is the head of Bloomfield Hills-based Penske Automotive Group Inc., which operates more than 300 franchises in the United States and internationally, selling 40 brands. He has hired former Chrysler Vice Chairman and President Tom LaSorda as a consultant and could form a venture with Nissan Motor Co., the Japanese affiliate of Renault SA, according to a source familiar with talks. Penske reportedly plans on importing vehicles made in South Korea by Renault Samsung Motors and selling them through the Saturn dealership network, according to The Automotive News.

News of an imminent Penske deal was welcomed by Taylor Brown, general sales manager of Saturn of Raleigh and Saturn of Cary in North Carolina.

"Penske is synonymous with quality and value," he said Thursday. "That's what we're expecting him to bring to us."

A conference call was scheduled for this morning to discuss the sale.

Also, GM is set to sell the Delphi manufacturing group to a private equity group.

Separately, GM is set to provide more than $2.5 billion to finance the buyout of Delphi /quotes/comstock/11i!dphiq (DPHIQ 0.09, +0.00, +5.39%) by private-equity firm Platinum Equity, the Journal reported, citing an unnamed source.

Terms of the deal include an investment by Platinum of up to $750 million and GM's purchase of four Delphi plants and its global steering division based in Saginaw, Mich., the paper reported.

UPDATE:
Penske currently operates a truck leasing business, so adding car rentals to his portfolio isn't a stretch. It could open up a built in network that could expand the customer base if they see the vehicles as reliable and worthy of purchase after renting.