According to the plan of action that General Motors submitted to Congress today, the Saturn brand of cars will be no more. I find that a little sad. At the same time, the story of Saturn, I think, illustrates just how the Detroit Automakers just don’t get it.

I’ve bought exactly one car in my lifetime: a 2003 Honda Civic that I bought new in 2003. When my wife and I first considered buying a new car, however, we weren’t thinking of the Civic at all. If I recall correctly, I wanted a Prius–mostly because the hybrid thing was pretty new at the time and I thought it was really cool–and my wife really wanted a Saturn. And I have to say, I was with her on the Saturn thing. The Saturn S-series cars that were sold throughout the 1990s were good cars. I liked the look of them, I liked the way they drove, they were generally more reliable than most American cars, and I liked the philosophy of the company. (Back then GM had negotiated a special profit-sharing deal with the UAW for workers at its Saturn plant in Tennessee, and they also had a strict “pay the fair sticker price” policy that appeal to me–I stink at bargaining, and I know it.)

But in 2003, I couldn’t buy an S-Series car. Saturn had discontinued the brand. Instead, Saturn had replaced the Compact S-Series with the mid-sized ION. The car company that had once been noted for making basic, small, reliable cars to compete with the Civic and Corolla, was now churning out larger, less fuel efficient, less well-made cars that were cheaper–in all senses of the word–than the Japanese companies. I read all the reviews of the ION I could find, I looked at the Consumer Reports in frustration and disbelief, and then I went out to test-drove the uber-reliable Corolla and Civic–and my wife liked the Civic better so we bought it.

Since then, GM has gone even further. Saturn cars are now made at normal GM plants around the world. They share body types and engines with other GM brands. Their current lineup of cars includes five models (instead of the 1 that they started with), the oldest of which is the VUE (an SUV–er–Crossover), and which includes two SUVs (er, Crossovers) and a sports car (er, Roadster). A car company that initially made basic, cheap, dependable low-end cars to compete with the basic, cheap, dependable low-end cars that were making Toyota and Honda money hand-over-fist all over the world, now makes multiple SUVs, a typical American mid-sized car, and a Sports car–because other GM brands weren’t producing enough of those!

The Detroit Automakers can’t seem to figure out two basic facts of life about the automotive market. First, brand matters. A lot. Take a look at the list of Top 10 selling American cars in 2007–a list, by the way, which hasn’t changed all that much in the last twenty years. It includes three pick-ups: the Ford F-Series (introduced in 1948), the Chevy Silverado (1999), and the Dodge Ram (1981). There is one SUV on the list, the Honda CR-V (1996), and one full-sized car, the Chevy Impala (2000; although the model existed from 1958-1985, and 1994-1996 as well). The other five cars on the list are all small sedans: Toyota’s Corolla (1966) and Accord (1976), Honda’s Civic (1968) and Camry (1980), and Nissan’s Altima (1993). Detroit automakers like churning out new models of cars; every few years, it seems, they “completely redesign” things and come out with all new models. But customers like reliability and stability in their car makers–something that the pick-up divisions have figured out, but that the Big 3 car designers can’t get right. When Saturn was making relatively small improvements every year to its S-Series car, but keeping the model name and the basic philosophy of making small, reliable cars, it did well. When they tried to scrap what was working “just ok” and introduce “new improved” models every couple of years like their sister companies did… well, now the company won’t exist any more, so you tell me how well that strategy worked.

The second, related, lesson of Saturn’s demise is that the Detroit automakers tend to get too wrapped up in “fads”. In the early 1990s, minivans were the new big thing–and man, Detroit automakers swamped the market with minivans. By 2000, the fad was SUVs–and again, it seemed that everything that GM, Ford, and Chrysler produced was an SUV. Now the fad is hybrids, and you can once again see the Big Three pumping out hybrid everything (including Hybrid SUVs, for the ecologically conscientious suburban road-warrior crowd). But look at that list again. What cars, year in and year out, do Americans buy more than any other? Pick-ups, compacts, and mid-sized sedans. If I’m building a car company for the long-haul, those are the markets I want to dominate. Sure, I can have the fad cars for the moment, but you don’t want to build your basic long-term business model around those things.

But the GM executives who managed Saturn thought in the early 2000s that bigger cars were the wave of the future. So they scrapped the compact S-series, and introduced a fleet of mid-sized, full-sized, and SUV models. Er, yeah, good timing there.

Saturn was a great idea for a GM car brand. It was a great idea in 1990, when Saturn first started selling cars, and it’s still a great idea now. Unfortunately, the Saturn of 2008 bears no resemblance to the Saturn of 1990. If GM really wants to survive for the next eighty years, scrapping the Saturn of 2008 is the first step–but the second is to get back to the Saturn of 1990. Not that Saturn was the American pioneer of making low-cost, small, reliable, basic cars. Some guy named Henry Ford did pretty well for himself on that idea awhile back, although his company has lost its way too.

This entry was posted on Tuesday, December 2nd, 2008 at 11:29 pm and is filed under Business And Regulation, Fiscal Issues. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.