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Saturn Reinvented A Gms Plan

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SATURN: Re-invention,
A GM’s Plan for 100 more years

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Ramesh Damisetty
09/30/2009

Introduction:
General Motors (GM), world’s largest automaker was founded in 1908. It has employed about 317,000 people with manufacturing operations in 32 countries and sales in 200 countries. GM is a market leader in building Sports Utility Vehicles (SUV), Truck and Luxury cars with proven track record for excellent customer service.

GM consistently evolving with great innovation to meet customer demands and facing challenges in changing world economic conditions. Starting 1970’s, when the first oil crisis began, GM started seeing its weaknesses in building small cars, which eventually made GM to loose market share from 46% to a low of 32 %. With prolonged recession into 1980s, GM started incurring financial losses and in 1981, it laid off a major portion of its employees.

To evaluate its strength to meet foreign competition in producing a world-class quality car in a cost competitive manner using American work force, in 1970s, it started an initiative called ‘Saturn Project’. For this initiative, GM followed a ‘clean slate’ approach which is not bounded by any traditional thoughts of that time but with a limitation of not reinventing the wheel. As an outcome of this project, in 1985, GM established a subsidiary ‘Saturn LLC’.

Saturn LLC is different from other GM subsidiary peers in its workforce management, its manufacturing facilities and a unique corporate culture focusing on building customer loyalty, product quality/guarantee and workforce development. Saturn LLC was able to build the brand recognition and was very successful in building its distribution channels. Within the four years of producing its car, Saturn produced its one-millionth vehicle.

Starting 1990s, with dropping oil prices to historic lows and lack of larger size cars, SUVs, sportier cars, it started failing to meet the consumer expectations. Its repeat purchase rates...