the audit

NYT’s Saturn Story Missing a Few Rings

The Times has an interesting idea for a story on Saturn and what might have been for General Motors, but the effort is incomplete: The story...
December 4, 2008

The Times has an interesting idea for a story on Saturn and what might have been for General Motors, but the effort is incomplete: The story needed a lot more fleshing out.

The lede shows promise:

General Motors has promised Congress that it can recreate itself as a different kind of car company — smaller, with a more cooperative relationship with its union, and a lineup of fuel-efficient cars to compete with the best of the foreign brands.

At least G.M. knows how difficult the challenge will be.

A quarter-century ago, G.M. started Project Saturn with the same goals. And it worked, for a time.

But then it skims over some important points:

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But Saturn quickly started losing its shine. G.M. executives cut spending, and shoppers flocked to S.U.V.’s. Eventually, many workers resisted the new management style. Now the brand that was once a symbol of G.M.’s future will have a bit part, at most.

What “new management style”? The Times doesn’t explain what that was. The thing launched nearly 20 years ago, and I’ve forgotten, as I’m sure most other readers have.

The paper does better at listing how GM executives, after initially pouring money into the project, eventually stuffed the division.

But it also doesn’t explain how the Asian automakers did differently while Saturn was left to rust.

UPDATE: I missed this LAT story this morning, but it has a better explanation of why Saturn didn’t make it:

But the decision to consider pulling the plug on Saturn, the agile little start-up that GM developed to reinvent the way it produced and sold cars, is a bitter reminder of just how deep the automaker’s troubles run.

Saturn, after all, was created to do almost everything that GM, industry experts and many members of Congress say a modern car company has to do to survive in today’s market: Make a limited range of small, fuel-efficient cars, then sell them through a small network of dealers for a profit.

There was just one hitch: GM says Saturn never made a profit.

At its plant in Spring Hill, Tenn., Saturn made simple, unfussy cars designed to appeal to penny-wise drivers. But the price point of the vehicles — in recent years as low as $12,000 on some models — was far too low to cover the cost of producing and marketing them, analysts say.

“New management styles” don’t matter much if the car never made money, now do they?

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.