Saturn gets sucked into GM's orbit

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General Motors Corp. is drawing Saturn, its grand marketing experiment that created an approachable and separate car company, closer into its orbit.

Sales, service and marketing functions in Troy, Mich., soon will be folded into GM's downtown Detroit operations. The marketing, advertising and research staff of the "Different kind of car company" shortly will report to the same executive as other GM models -- Bill Lovejoy, group VP-vehicle sales, service and marketing for North America.


The marque and ad direction will continue, and Saturn Corp. will still exist as a subsidiary under Cynthia Trudell, chairman-president. Her post, however, will assume oversight only for manufacturing, engineering and product. In 1998, GM transferred nearly half Saturn's 700 engineers to its central North American groups.

According to a Saturn spokeswoman, moving the marketing teams to GM headquarters allows Saturn to better utilize its parent's resources, save money and result in more synergy. No Saturn staffers are losing their jobs. Not coincidentally, the shift change comes in the wake of the flubbed 1999 launch of Saturn's crucial midsize L-Series car and station wagon line. Jill Lajdziak, VP-sales, service and marketing at Saturn, admitted Saturn didn't have enough of the new cars made when the ad blitz started.

Moreover, she said "some ads" from Saturn shop Publicis & Hal Riney, San Francisco, "were not strong enough." The brand reduced production of L-Series early this year when sales slumped.


Riney, the architect of Saturn's creatively lauded campaign, was under pressure last year to retool ads after the L-Series disaster, said a Saturn dealer who asked not to be named. He said Ms. Lajdziak gave Riney a wake-up call after the L-Series launch to improve advertising or risk losing the $275 million business, an assertion Ms. Lajdziak denied.

The moves at Saturn come 15 years after GM formulated its groundbreaking strategy to form the independent subsidiary with a folksy personality to woo import buyers. The unit and its dealers spearheaded friendly service and no-haggle pricing that still consistently rank Saturn among the top auto franchises in customer satisfaction studies.

Saturn's earliest ads in 1994 touted "Spring in Spring Hill," inviting owners to the Saturn plant in Tennessee. That so-called homecoming was made into an ad; the company's "Saturnalia" became a full-scale bonding event featuring top-name entertainment.

The current campaign still shows factory workers, but they're from the L-Series plant in Wilmington, Del. -- where production problems caused an inventory shortage for last year's launch.

Until the arrival of the L-Series in summer 1999, the brand had sold basically the same small S-Series line since 1990, though the wagons, coupes and sedans all had upgrades over the years. Saturn is preparing for the arrival of four new products, starting with its first SUV next year. GM is investing $1.5 billion in Saturn for the new vehicles.


Saturn's financials aren't reported separately from GM's, but Ms. Lajdziak said Saturn's "aggressive growth mode does not allow us to be profitable." Saturn sold 279,747 vehicles in the first 10 months of this year, up 21.4% from the same period a year ago, according to Automotive News. In comparison to other small cars, GM's Chevrolet Division sold 186,202 Cavaliers through October and American Honda Motor Co. sold 260,812 Civics.

Jim Hall, VP of industry analysis at consultancy AutoPacific, said moving Saturn back to the mother ship make sense because it allows the brand to share GM's resources and cut costs.

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