Detroit, March 9: It was launched as a "different kind of car company," a bold, $3.5-billion venture aimed at transforming the relationship between consumers and their vehicles.But eight years after production began, General Motors Corp's Saturn Corp finds itself at crossroads. The folksy company that pioneered no-haggle pricing and owner picnics is caught without fresh products in a shrinking small car market.
In Spring Hill, Tenn., where academics troupe to study a self-described labour-management Xanadu, Saturn faces unprecedented worker dissent over its landmark labour contract.
On Tuesday and Wednesday, the 7,200 hourly workers at the Spring Hill manufacturing plant will vote on whether to shelve the novel "Memorandum of Agreement" in favour of a traditional bargaining pact with GM.
Last month, 1,300 members of UAW Local 1853 voted by an 86 per cent margin to hold a referendum on dropping the current agreement. A similar vote held in 1992 was resoundingly defeated.
Union leaders and companyexecutives believe the agreement will survive again. They attribute the unrest to a minority of union members with older style views. But even some long-time union loyalists sound discouraged about the company's future.
"Saturn was once described as the crown jewel," said Mike Bennett, bargaining chairman of Local 1853. "Now it appears to me we've got a lot of gemologists trying to chip that jewel into rocks."
Indeed, there is a different atmosphere around the vote this time. Saturn sales are in a slump, eating into worker bonuses that hit $10,000 two years ago.
Sales dropped each of the last three years as consumers flocked to sport/utility vehicles and higher-value used cars.
The company has not expanded its product mix since adding a wagon to its coupe and sedan several years ago. At the same time, the auto retailing industry has caught on to the buyer-friendly atmosphere that Saturn made its hallmark.
Moreover, there are union concerns that GM no longer views Saturn as a unique enterprise.
Thenew LS mid-sized Saturn, due out next year, will be built in Delaware off the European-based Vectra platform. A sport utility is not planned until 2002, and the next generation of its current small cars will share the same platform as the next Chevrolet Cavalier.
Bennett said GM, in its drive to create common, global systems, is over managing the company and stripping away its flexibility.
"If Saturn had been operating in a unique, innovative, responsive way, we would not be sitting here with our heads in the sand about all this," said Bennett.
Analysts agree that GM has neglected its investment in Saturn and has failed to build on its strength as an import-fighting brand that attracts younger buyers.
"If there is one answer for Saturn it's basically investment," said Christopher Cedergren, managing director of Nextrend, a Thousand Oaks, Calif., consulting firm. "They need to hunker down and decide what Saturn is going to be in the market place."
Saturn officials have taken steps recently to appeaseworkers and jumpstart sales. Last month, the automaker launched a new national lease programme that offers an SL1 for $129 a month, and the SL2 model for $183.
More advertising is planned this year with a greater emphasis on products, and 68-75 more dealerships will be added.Last month, the Saturn board adjusted the reward formula to make it easier for workers to take home $4,000 to $6,000 in bonuses in 1998. Saturn must now sell 280,000 cars this year, down from the previous 310,000, before bonuses kick in. Saturn sold 251,099 cars in 1997.
