Dallas, Texas – An investor group has approached General Motors about purchasing Saturn Distribution Corporation (SDC), the legal entity that currently franchises with Saturn retailers.
The investor group includes private equity firm Black Oak Partners LLC, and is working together with a number of Saturn retailers. The group wants to acquire and operate SDC as a diversified automobile distributor and retailer.
In a statement, General Motors said that as noted in its viability plan, the company would review the potential spin-off or sale of Saturn, and if those options did not prove viable, Saturn’s operations would be wound down over time. “Over approximately the past 60 days, a sub-committe of Saturn retailers has been studying the feasibility of the sale or spin-off options, and has identified some parties that are potentially interested in a purchase or spin-off of Saturn,” the statement said. “We are advised that one of the interested parties is Black Oak Partners. We are not at liberty to discuss any other interested party. With respect to what the eventual outcome concerning Saturn might be with Black Oak or any other interested party, it is simply premature at this time to speculate on what any eventual outcome may be. When we have additional information on this topic, we will communicate to all involved.”
The investor group said that a “new” SDC (nSDC) is envisioned as a unique model for new-car retailing in the U.S., built on Saturn’s customer-centric, low-hassle sales and service model. The company will leverage Saturn’s brand and source products from OEMs for distribution through Saturn’s existing network of approximately 440 Canadian and U.S. retailers.
The distribution company would initially source vehicles from GM, but expects over time to offer smaller, fuel-efficient vehicles from a range of manufacturers under its traditional business model of high customer service. The company as envisioned would engage in no direct manufacturing activities itself; its role would be product sourcing, quality assurance, distribution, competitive analysis and positioning, and national branding.
“As an independent retailer, the creation of nSDC will satisfy the primary interests of all existing stakeholders,” said John Pappanastos, a spokesperson for the group. “GM will be relieved of liabilities related to retailer franchise agreements and avoid the downstream financial fallout on their other brands that would result from closing Saturn retail facilities. Saturn retailers, on the other hand, will be provided with an exciting opportunity to secure a return on their existing investment. And taxpayers will be able to salvage more than 10,000 retail jobs that might otherwise be lost in a GM reorganization, as well as mitigate the potential for substantial local economic impact from Saturn retailer bankruptcies.
“Our goal is to build upon an iconic brand supported by a strong national network of retailers that fundamentally share a vision for delivering a best-in-class customer experience. We appreciate GM’s, as well as the U.S. government’s, support in this effort.”