Saturn

Hard times at General Motors in the '80s were exciting times at Chrysler Corp. Iacocca had built a management team heavy in former Ford executives, the so-called "gang of Ford." Ben Bidwell had been vice president for North American sales at Ford under Iacocca's presidency there. Detroit's clown prince, Bidwell was in great demand on the banquet circuit and at press functions because of his sharp and sometimes ascerbic wit. Three years after Iacocca was fired by Henry Ford II, Iacocca invited Bidwell to join him at Chrysler Corp., but Chrysler was on the skids, or so it appeared, and Bidwell left Ford after 28 years to become president of Hertz. In 1983, Bidwell answered Iacocca's call.

Also at Chrysler Corp. was Hal Sperlich, who had been fired at Ford even before Iacocca and had led development of the minivan at Chrysler, then called the "garagable van," which top Ford brass was not interested in. The minivan, more than any other product, saved Chrysler Corp. Jerry Greenwald, one of the few Jews to make it big at any of the Big Three, left Ford to join Chrysler's top management team.

Bob Lutz, Swiss-born former Marine pilot and fan of fast cars, was an executive vice president and member of the board of directors at Ford when he fell from favor in 1986 and accepted Iacocca's invitation to join Ford. Within a year of Lutz's arrival, Chrysler bought Lamborghini and Lutz, now Chrysler Corp. vice chairman under Robert Eaton, began high-speed commuting from Ann Arbor, Mich., in a Lamborghini Countach. Under this free-wheeling management team, Chrysler acquired Electro-Space Systems, a Dallas defense contractor, then in 1987 it bought the big prize, American Motors Corp. and its popular Jeep line.

AMC was the result of the merger of two troubled companies, Nash and Hudson, in 1954. AMC produced a series of Ramblers, Gremlins, Pacers and Renault Alliances, some of which had some sales appeal, but none of which could really put the corporation on a firm financial footing. In 1978, the French state-owned auto maker Renault bought 46 percent of AMC and poured money into it to little avail. When Chrysler acquired AMC in 1987, it increased its corporate size by 20 percent overnight, foiled the doomsayers by digesting it quickly, eliminated unpopular car lines and increased worldwide marketing of the Jeep line.

With the joining of Chrysler Corp. and AMC, the descendants of two Buick pioneers, Charles Nash and Walter Chrysler, were reunited.

Ford Chairman Donald Petersen was regarded by much of the press as America's finest manager, but he made the same mistake that Lee Iacocca had made before him -- he ran afoul of the Ford family and Ford Motor Co. is still largely a family enterprise. Petersen, an elegant-dressing intellectual, presided over a major turnaround by Ford Motor Co. involving big gambles which paid off, the "flying potato" Thunderbird and more importantly the radically streamlined Ford Taurus.

Petersen was the darling of the American business press, widely admired by reporters and academics, but not completely popular with his colleagues at Ford. Most importantly, he was not well-liked by members of the Ford family. The board of directors decided it wanted him out.

The board sent director Clifton Wharton, a gentleman and a scholar (former president of Michigan State University) with its message to "get out," but Wharton was too subtle and Petersen didn't get the message.

Then the reigning patriarch of the Ford family, William Clay Ford, was too gentlemanly and Petersen again did not seem to get the message that he was being fired. Finally director Drew Lewis, former Reagan Administration official, told Petersen: "The board wants you out." A few months later, Petersen announced his retirement.

New designs coming out of Detroit, as exemplified by Ford's bold gamble, hinted at a turnaround in the way Detroit was doing business. But the radical approach came from General Motors. One of Roger B. Smith's most audacious moves was the announcement of the creation of Saturn in an attempt to answer the challenge of the Japanese. Saturn Corp. was founded Jan. 7, 1985, as a separate unit of General Motors, an innovative attempt to rethink the automobile and how to manufacture it. It also seemed to many to be a tacit admission that GM had lost its way and needed to separate this new effort from the old.

Saturn took a clean-slate approach to everything -- what the car would be, how it would be built, how it would be marketed and sold. Saturn began building compact cars in 1990 at its all-new plant in Spring Hill, Tenn., far from the GM factory towns in Michigan -- Detroit, Warren, Flint and Lansing.

In February, 1985, a veteran engineer conceived of using lost-foam casting to produce engine parts, a sophisticated process never before applied on such a massive scale. In March, 1985, Saturn held its first customer workshop in San Francisco to find what import owners really wanted in a small car. In July, 1985, Saturn and the UAW settled on a revolutionary agreement so simple it fit in a shirt pocket instead of a three-inch-thick binder. And in July, 1985, Saturn chose Spring Hill, Tenn., as its home.

July 30, 1990, GM Chairman Roger Smith and UAW President Owen Bieber drove the first Saturn -- a medium red sedan -- off the assembly line. October 25, 1990, the first Saturn cars went on sale across the United States. The cars had plastic body panels attached to a frame and there were a few problems with that system, but they were quickly solved.

Saturn dealers, called "retailers," were instructed to use a no-haggling approach to sales and to give customer relations and customer satisfaction the highest priority. They began such strange practices as holding picnics and customer service clinics to forge friendships with owners.

By 1992, Saturn ranked No. 1 in new-car sales per retailer -- the first time in 15 years that a domestic nameplate topped the list. Saturn reported profitable operations for May, 1993, its first profitable month -- ahead of schedule. In 1994, a "Saturn Homecoming" attracted 44,000 Saturn enthusiasts to Spring Hill to celebrate the make's five years in production.

Did all this attention to customer relations pay off? On June 1, 1995, Saturn produced its millionth car and Saturn is now consistently in the top ranks in sales.

The Saturn is pleasant, conservative and middle-of-the-road. Lots of cars are. So why the rather rabid following of its loyal owners? Saturn pioneered the haggle-free shopping environment, and it has proven surprisingly successful. Service is of a level usually expected only from luxury dealers, and consumer ratings have been high.

Saturn showed that it isn't just neck-snapping, tire-screeching performance that builds a fan club or a cult. Treating the customer right does too. The American industry was on to something and was on its way back.