Saturn, Penske, and 5S

Over the last couple days word has leaked out that the Penske auto group will be purchasing the Saturn brand from GM.  Saturn was originally supposed to be GM's answer to the Japanese automakers, but executive egos, antiquated union work rules, and eventually the perception of Saturn as the bastard stepchild of GM (a bad thing?) ended that brief flirtation with excellence.  I've always thought there was still some hope for Saturn, especially if they became independent.

Penske might just be the ticket.  The company is primarily a dealer network and probably intends to outsource production activities for the various brands it sells, but they have a fundamental philosophy that could drive excellence into internal and external operations and relationships.  I know from personal experience.

I've purchased my last three vehicles, Japanese and German brands, from two different Penske-owned dealers.  The entire sales cycle is focused around delivering value to the customer, from marketing to the actual sale to service.  No high pressure tactics, salespeople that truly know the brands and really try to learn how you define value, to exceptional service.

That last aspect, service and maintenance, is almost stunning, at least relative to other dealers.  I've had my vehicles serviced at both dealers and have briefly visited three others, and they are identical in process, layout, and methods.  Most impressive are the service bays themselves.

7am, noon, or 5pm... I challenge you to find a Penske service are where you couldn't literally eat off the floor.  Three weeks ago when I briefly stopped in with a question, I saw a near panic when a tiny spot of oil was found on a large service floor with over ten cars up on jacks.  I swear some form of root cause analysis was also performed based on the group of service techs trying to figure out where that tiny spot came from.  Tools, shadowboards, standardized layouts, scrubbed, straightened, and sorted... a Penske service bay is an example of rather extreme 5S.

Obviously many of the methods were derived from Penske's racing roots where extreme efficiency is critical.  And obviously 5S alone doesn't create excellence.  But my experience and knowledge of the Penske organization gives me hope that they could save the Saturn brand and turn it into what was originally envisioned.

Stay tuned... Penske's disruption of the traditional manufacturer/dealer model, coupled with a core excellence that could influence suppliers and competitors... could radically remake the automotive game.

Comments

[Rodrigo Hermosillo]

I guess you know that Penske manages, as lead logistics provider, about 50% of GM's supply chain. Also, Saturn no longer has stand alone assembly facilities so they will have to source their product from GM in North America, the new Opel in Europo or dare I say, China.

[david foster]

IIRC, Saturn was originally set up as a true business unit: its own engineering, its own factories, and its own dealers. This no doubt infuriatd the functional barons within the rest of GM, and the moment Saturn stumbled, they were demanding that pieces of it brough back into the blob, in the name of "synergy."

Had GM elected to keep Saturn separate and use it as the vehicle of change across an increasing part of the company--by expanding its product line--history might have been very different.

[Bill Waddell]

It is my understanding that Penske will source all of the Saturn products from GM - that GM will essentially be a contract manufacturer Penske will do a great job of sales and distribution - but those were not GM"s problems. To keep GM manufacturing in place and simply replace their sales and marketing organization strikes me as insane.

[mike]

I believe they have to source Saturn from GM for 2 years minimum.