Word: saturn
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...While Saturn's advertising will eventually tout the car's qualities, the early pitch is clearly to patriotism and small-town sentiment. That may be a + canny marketing move. "The Saturn is the beginning of something we have been warning our Japanese friends about," wrote Jean Lindamood, executive editor of Automobile magazine. "Americans are harboring strong anti-Japanese sentiment just below the surface, and when Detroit can make a car that is the equivalent of a Japanese car, Americans will buy it. I believe it will sell like crazy. I also believe that if Saturn has quality problems, Saturn...
...rally enthusiasm at Saturn, the venture has given rise to a litany of doubts both inside and outside GM about the wisdom of adding another car line when the automaker's factories are running at only 80% of capacity. GM was forced to close 11 plants in the 1980s and is likely to shut four more plants in the next three years. Says rival automaker Lee Iacocca: "GM needs another car line like they need a hole in the head...
...Saturn may also lure customers away from other GM products, especially its highly successful Geo line, which is made with partners Suzuki and Toyota. "They're not going to steal market share from the Japanese," says Paul Lienert, editor of Automotive Industries' Insider, a trade newsletter. "It's more likely that they'll cannibalize other GM products, so for the company it will be a net wash in market share...
...Saturn's biggest challenges will be to turn a profit, even in the long run. "Nobody makes money on small cars," says Maryann Keller, an analyst for the investment firm Furman Selz Mager Dietz & Birney. "Saturn's no different from anybody else. The Japanese certainly don't make money on small cars." In most cases, those models serve as loss leaders for the larger, more option-loaded vehicles and to boost the average fuel-efficiency of an automaker's total fleet in order to meet U.S. government standards. But GM president Lloyd Reuss contends that Saturn will make a profit...
...gloomy picture, or does it herald real change for the manufacturer? GM chairman Robert Stempel, who succeeded Roger Smith last August, is likely to operate in ways far different from his predecessor. Smith, an autocratic manager with a purely financial background, made sweeping strategic moves that included launching Saturn and spending billions of dollars on high-tech robotics and such acquisitions as Electronic Data Systems and Hughes Aircraft. Stempel, by contrast, is an authentic "car guy." His most important attribute may be his reputation as a steadfast team player, since almost everyone agrees that GM's challenge...