Changes may mean Saturn will lose its identity

NASHVILLE, Tenn. -- Saturn, once billed as "a different kind of company" making "a different kind of car," is losing its distinct identity and becoming just another division at General Motors Corp.

GM is forcing Saturn to adopt common practices for design, production and labor, a change that had to happen, analysts say, to cut costs and make Saturn competitive.

Saturn officials are downplaying the changes -- "We simply negotiated a new agreement" on labor, Saturn spokeswoman Sue Holmgren said -- but analysts see it as the end of Saturn as an separate entity.

The Saturn Corp. was an experiment launched in 1990 to compete with low-cost imports like Toyota, Honda and Nissan. All the cars were made in the small town of Spring Hill, about 30 miles south of Nashville and, more important, about 500 miles away from Detroit.

The company had its own managers who reported to the Saturn executive board rather than to GM, and the United Auto Workers signed a separate contract with GM to create a cooperative environment between labor and management.

The cars -- there was initially only one model -- were offered at a fixed price, with no haggling. The company developed a reputation for customer loyalty that rivaled higher-priced brands.

Cris Thomas, who runs the computers at a private school in Cambridge, Mass., is on his third Saturn and has put down a deposit on the new Ion sedan without even a test drive.

"I've got to have the Ion," Thomas said. "I think Saturn is more reliable than the Japanese cars."

'Flexibility is king'

But after a promising start, Saturn let the car's look and technology get stale, said Mike Wall, an analyst for SCM Worldwide in Farmington Hills, Mich.

"Saturn's coup and sedan stayed on the market a lot longer than they should have," Wall said. "Automakers get bursts of activity by tweaking the design, but that didn't happen with the Saturn S series."

New models were finally introduced to mixed results, and the company has plans for more, including a minivan, a sport utility vehicle and possibly a sporty coup or roadster.

Production of the new Relay minivan will begin next fall, but not in Spring Hill. Instead, it will be assembled at GM's plant in Doraville, Ga., using a standard GM frame.

"Flexibility is king," Wall said. "You've got to have flexibility of production in the current market. This isn't a bad sign for Spring Hill ... GM isn't turning away from the Saturn brand -- it's injecting more flexibility."

Another sign of change is Saturn's new contract with the UAW, which was approved last month.

The contract calls for workers to receive a $3,000 bonus now and a 3 percent performance bonus to be paid next year, in addition to a 2 percent raise in 2005 and a 3 percent raise in 2006.

But the union also agreed to a transition to the national labor agreement with GM that would allow the company to lay off employees for the first time in its history. Employees approved the contract 2,953 to 317.