MLManley

By Frank James

It appears that car maker Saturn will soon be history.

Penske Automotive announced Wednesday afternoon that it’s dropping its planned purchase of Saturn from General Motors Co. because a plan fell through to have a third company make the cars after GM stopped. Penske didn’t name the third company.

Quickly responding, GM said it’s closing its Saturn unit. This from a GM press release with a statement from GM CEO Fritz Henderson:

As a result of PAG’s decision, we will be winding down the Saturn brand and dealership network, in accordance with the wind-down agreements that Saturn dealers recently signed with GM. Pursuant to the terms of those agreements, the wind down process will be determined and communicated shortly.

Saturn customers and owners will continue to be able to purchase and have their vehicles serviced at Saturn retailers during this process. Once the wind down is complete, Saturn owners will still be able to have their vehicles serviced at other GM dealerships. We will be communicating with our customers very soon to explain the next steps in this process.

Penske, which operates auto retailers, blamed the board of the third company for rejecting the manufacturing agreement and bringing down the entire deal.

An excerpt from Penske’s statement:

Since announcing its discussions with GM on June 5, 2009, the company has been in the due diligence process to determine the feasibility of developing an independent distribution model for Saturn-branded products and service parts in the United States, including the sourcing of vehicles from GM and other potential suppliers. The company had negotiated a definitive agreement with GM to source vehicles on a contract-manufactured basis for a period of time. After this period, the company would have been required to source vehicles from another third party under a similar contract-manufacturing agreement.

Penske Automotive Group negotiated the terms and conditions of an agreement with another manufacturer; however, that agreement was rejected by that manufacturer’s board of directors. Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction.