Buying the brand – not the concept

I’ve posted a number of entries calling on someone to buy the Saturn franchise as part of a deal to save GM. It looks like that may occur — but in a manner that undercuts the brands strongest intangible assets. According to a story in today’s Washington Post, A Foreign Buyer Could Put Saturn’s Image Into Orbit:

A few potential buyers are considering tapping Saturn’s strong dealer network to distribute vehicles made by foreign manufacturers into the United States. Such a move would transform a brand that was designed to reinvent how Americans built and sold cars.

This is apparently based on the analysis that the dealer network is Saturn’s most important intangible asset. However, that analysis overlooks the tight interconnection between intangible assets. As the Post story goes on to note:

Thomas A. Kochan, an MIT professor who wrote a book about Saturn, said a foreign partnership faces tall hurdles.
“They’re kidding themselves if they think dealers themselves can sustain the brand,” he said. “This was a tightly integrated model. People related to Saturn because of the aura of the company as an American company.”
. . .
For a while Saturn successfully competed with Japanese rivals. Thanks to its unique dealer arrangement, it introduced “no haggle, no hassle” car buying, in which people paid the posted sticker price.
The company prided itself on a collaborative culture, where dealers and workers regularly gave input into the products. The union relaxed work rules that had pigeonholed workers into one kind of job. Instead of pensions, employees got 401(k)s. Raises were based on performance, not negotiations.
“The sad part is that they didn’t learn very much from it,” Kochan said. “They didn’t stay committed to the organization once initial champions retired.”

That lack of commitment is what helped turn Saturn from a pioneer in reviving American competitiveness to just another brand (and one that everyone is telling GM to ditch).
The new buyers need to understand that Saturn will only survive as a complete concept. Unless the package is revived, the enterprise will simply continue its downward slide. As my friend Nir Kossovsky likes to say, “intangibles are like the stones of a Roman arch where the loss of any one stone could cause catastrophic collapse.”
Unfortunately, it looks like the potential buyers are attempting to buy a couple of the stones – and are running the risk of collapsing what is left of the arch. Isn’t there any body out there interested in rebuilding the structure?

Advertisements

2 thoughts on “Buying the brand – not the concept”

  1. Saturn Goes to Penske

    In a number of earlier postings, I have call for some one to take over and resurrect the Saturn car company. Word has come this morning that Penske Automotive is buying Saturn from GM. The quotes from Penske are heartening….

    Like

  2. Saturn Automotive – RIP

    According to various press reports, Penske Automotive’s deal to buy Saturn has fallen through and GM has said it will close the company. The reason: lack of manufacturing capability. Penske was really buying the brand and dealership network, not the…

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s