The Truth About Saturn: A Different Kind of Car Company | WheelHouse

Today on Wheelhouse we’re talking Saturn;
not the planet! The Company! Why the company was started, their ambitious
plan to change the game, and how it all came crashing down. It’s a sad story of forward thinking, wasted
potential, and self-sabotage. This is the truth about Saturn. In the 60s, gas was cheap, so American car
companies paid no attention to fuel economy. But that thinking had to change in the 70s,
when the oil crisis made gas prices skyrocket, and sent consumers looking for more efficient
options. American consumers started taking Japanese
companies like Honda and Datsun more seriously, and by proxy, so did Detroit; which for years
had been completely underestimating their eastern competition. Domestic manufacturers were simply not great
at making small, economical cars at this point. While cars like GM’s 70’s-era Vega and
Chevette sold well, it was almost a universal consensus that the Japanese did small cars
better, and soon, cars like Honda’s Civic and Toyota’s Corolla were dominating the
compact car market. In the boardrooms of GM, a plan was being…planned. They didn’t want to make more small cars
under their existing brands, because they thought customers might think of them as cheap
runts of the lineup. So they had to build an entirely new car company
from scratch. In 1982, GM VPs Alex Mair and Robert Eaton
began work on the project. It would eventually be named Saturn, after
the rocket which carried America to the moon, winning that other great race that set the
world’s pace and earned us the top place in the galactic starchase, the Space Race. General Motors hoped that the totally new
company would overcome any negative brand-associations buyers had with small cars and American companies. And when I say “totally new company”,
I mean it was totally new: new car design, new engine, new production plant, new workforce,
new dealers, and even new ways of producing the car in the first place. What made Saturn completely different from
its competitors was the ownership structure between management, engineers, and the factory
workers. In other GM brands like Chevrolet and Pontiac,
the Management would tell the engineers what to build, the engineers would draw up the
design, and the factory would build the bureaucracy-approved product without giving input on what they
were making. But at Saturn, the dynamic would be a little
different, and had potential to change the auto industry forever. Major decisions at car companies are usually
made from the top down, but at Saturn, the United Auto Workers union now had a huge input
on their car’s design, meaning that people working on the factory floor could tell the
engineers and management what would and wouldn’t work. This shared ownership of Saturn between everyone
involved had an interesting effect on the workplace culture: It turns out if you listen to your employees
and make them feel like their voices matter, they give you their loyalty and productivity
increases. GM set up the Saturn factory in Spring Hill,
Tennessee, far outside the influence of Detroit. People were excited! Spring Hill is a small town outside of Nashville,
and General Motors is going to build a factory here? Making completely new cars? Awesome! I remember when we finally got a movie theater
my senior year, this Factory must have been at least twice as exciting as that. The car that Spring Hill would produce was
dubbed the “Saturn S-series”, with sedan models named SL, and the SC coupe. The largest departure from traditional car
design used on the S-series was the use of a space-frame design. This design, which takes structural and crash
load off of the side panels, meant that Saturn could use their signature dent-resistant plastic
body panels instead of metal even though the SL and SC were made to
compete with Japanese cars, they didn’t have the tech of their eastern competitors,
so GM based all of their marketing around the fact Saturns were built in small-town
USA. GM was banking that would see how Saturn was
doing things differently, and that they would want to get in on that excitement. In fact, Saturn’s slogan was “A New Kind
of Car Company.” This fresh approach went all the way to the
showroom as well: Saturn dealerships were haggle free, meaning the price you saw was
the price you paid. And when you bought your new Saturn, dealership
employees would give you applause as you got in and drove away. It honestly looks like a cult People loved their Saturns. The company even hosted a ‘homecoming’
at Spring Hill where thousands of Saturn owners from all over would meet up and party at the
factory. GM had successfully marketed an American small
car, a feat unheard of just ten years earlier. By the end of 1995, Saturn had built over
a million cars in it’s short 6 year history. But the good times wouldn’t last forever. While the S line was updated three
times during its life, there was no escaping that Saturn only really had one car to sell. This stagnation, combined with the fact that
the “new company” shine had worn away, meant that Saturn sales were slowing down While new cars were needed, GM was a bit strapped
for cash, and couldn’t afford to design a totally new, unique vehicle for Saturn,
like the S-Series. In fact, GM would never be able to design
a unique Saturn again, making the S-Series a bit of a unicorn. Instead, GM would dip into it’s parts bin
from around the world to make future Saturn’s, and the first car to emerge from this corporate
rummage was the L-series, introduced as a 2000 model year. The L was basically a rebadged Opel Vectra,
which sucked. Sensing a shift in the market, GM execs decided
Saturn also needed a crossover SUV. The Saturn Vue debuted in 2002, and was a
rebadged Chevy Equinox, which was another rebadged Opel. GM had created Saturn to operate in a way
that wasn’t like GM. But now, General Motors was forcing Saturn
to act like General Motors. Saturn had always been the oddball in GM’s
lineup. And while it’s employees were happy and
customers loyal, neither of those things meant new sales, and that meant no money coming
in. GM had yet to get a return on their investment
in Saturn. They had spent nearly five billion on development
and the Spring Hill facility. Since GM was a little light in the wallet,
that meant Saturn was in the crosshairs of the cost cutters. If Saturn didn’t start making money soon,
it would mean bad news. Following the release of the VUE and the L-series,
Saturn would finally kill of their watershed S-series in 2002. The Saturn ION would be introduced in 2003
to replace it, and shared its Delta platform with many GM cars, including the Cobalt. Despite introducing three new vehicles for
the new millennium, Saturn remained fairly small-fry in the industry. Their promise of a haggle-free experience
still proved to be attractive, however the market was no longer theirs alone, as Toyota
had introduced Scion and their no-haggle price models in 2003. This competition, combined with a steadily
worsening economic situation would combine to hit Saturn hard. Very hard. By 2005 Saturn was in chaos, unable to make
any money on it’s own. Competition within and without GM was stifling
the now-stale brand. The company was out of options and completely
resigned itself to selling a lineup made of all rebadged vehicles. Two years later, Saturn introduced all new
vehicles, with everything except the Vue getting replaced. The new line included the Sky, which was Saturn’s
first interesting car since their debut. But it was also just a rebadged Opel, and
didn’t sell on top of that. Nothing could save Saturn, as the economic
recession that struck the US in 2008 created a dire situation at GM. To save General Motors, the government provided
assistance in the form of their now-famous “bail-out” package, on the condition that
the plethora of companies GM owned and sold cars under be paired down So how did it get so bad? A 2010 lawsuit found that Saturn’s Vice
president and General Manager Jill Lajdziak didn’t know whether or not Saturn was making
money. She said that in a deposition Under Oath. To a lawyer. And she wasn’t the only one, their CFO Edward
Toporzycki said he didn’t know Saturn’s financial condition while he was involved
with the company. He’s the CFO! FInancial is in his title! So in 2010 three GM companies, Pontiac, Hummer,
and Saturn, all closed their doors, producing their last car, probably for good. While General Motors ended up surviving the
recession, their grand experiment in “a new kind of car company”, which they called
Saturn, did not. I think Saturn could have been great if GM
had let them stay true to their mission. They created Saturn to be a new kind of company,
and at the start, they were. What doomed this company that GM created to
run differently, was that GM ran it like GM. We explore lesser known stories in the car
world every week, so make sure you hit that yellow subscribe button right there. or right there, or right there, I don’t know where it is. Do you own an SL or SC? Do you like it? Let me know in the comments. Follow me on IG @ nolanjsykes, follow Donut Wear your seatbelt, see you next time.