Case Study on the Saturn Corporation

Saturn Corporation is an automobile manufacturer and a brand name, established on January 7, 1985, as a subsidiary of General Motors in response to the success of the Japanese automobile imports in the United States. The aim of the project was to explore the potential for building a small car of superior quality and value as efficiently as possible, combining the most advanced technology with the newest approaches to management.

In the period from 1882 to 1990, the formation of the revolutionary new , small car project namely, Saturn took place. In November 1983, the Saturn idea was publicized by General Motors’ Chairman Roger B. Smith and GM’s President F. James McDonald. Twelve months later, the first Saturn demonstration vehicle was revealed. On January 7, 1985, the Saturn Corporation was officially founded. In July 1990, GM Chairman Roger Smith and UAW President Owen Bieber drove the very first Saturn off the assembly line in Spring Hill, Tennessee. The first Saturn model, the S-Series, was significantly successful. A year later, Saturn hit the Canadian market. 499,999 Saturns later, ‘Carla’ entered the market in 1993. In May 1995, ‘Jasper’, Saturn’s Millionth car is produced. In 1996, the short lived GM EV1 hit Saturn Showrooms, later becoming the subject of the 2006 documentary film ‘Who Killed the Electric Car’. All EV1s were reclaimed by GM by 2005. In 1997, Saturn entered the Japanese market. In January 1999, Saturn rolled out its two millionth car. Later that year, Saturn began production of its all new L-Series. Saturn’s efforts have been recognized through several awards as it has become one of the most innovative car manufacturers in the United States. After it was introduced in 1990, Saturn received Popular Science’s “Best of What’s New in Automobiles” award, beating out five other finalists. In 1991, Saturn was awarded Popular Mechanics Magazine’s “1991 Design and Engineering Award” for high-quality in an all-new vehicle. Home Mechanix Magazine also recognized Saturn with its “1991 Easy Maintenance Car of the Year.” Later in the year, the Saturn Coupe was named Best Car in its price range by the American Automobile Association (AAA). As of May 1992, Saturn had sold more than 186,000 cars, and recently ranked third among new vehicles in total gross income per dealership.

The organizational structure of Saturn is a typical one in which everyone in the company has ownership of the company’s failures and successes and this was the main reason that to start Saturn as a separate organization rather than under General Motors. In Saturn, one of the important parts of bringing together a Multifunctional or Multidisciplinary team (MFT, MDT) is choosing the right people. Part of this is choosing people with not only different experiences, but with the needed backgrounds to complete the project and most importantly the ability to work with the other people that would be joining them in the team. Part of the hiring process for new workers at Saturn is a Candidate Assessment exercise, which is designed to test how well prospective team members can communicate ideas, be creative, and work with others. This is why everyone at Saturn is known as a team member. Here we use the concept of concurrent engineering as when all the team members work together they get an overall idea of what’s happening around and finally results in a better organization. Essentially the plant is run by many semi-autonomous teams of 6-15 people, each of which are responsible for every aspect of their area on the line. This worker responsibility has proved to be a very effective way of running the plant and keeping up morale. Saturn uses circles as a way to interact between the different working units. Hence, the company is more integrative in doing things and very much inclined in developing the product such that it attracts more customers.

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Jill Lajdziak is the former General Manager of General Motors’ Saturn division. She was the key player who took up the responsibilities of product development, maintaining the brand, marketing and supervision. She made the corporation in line with other GM North American brands. She made the Saturn as a ‘channel to a large ocean (GM)’.

Saturn was starved of models in the late 1990’s which had almost the similar design and attract only one kind of customers. It was more like a repeat customer and not like a bigger customer base. It was necessary for Saturn to have a change in the design which would attract more customers into it, which was not done. However, after 2000, Saturn planned of Model expansion in which new models came out and brought about some best cars. Although, this was a great move but it was a bit late to compete with the industry. Hence, the plan of GM for Saturn to make superb little cars to beat the Japanese at their own game miserably failed.GM has spent around 15 billion dollars on Saturn which was finally a failure.

Seeing what all has happened to Saturn, its clear that customer satisfaction should be in a bigger size rather than small number of customers being interested. A change in the designs from time to time must have helped the company a lot. It was for a decade that no changes took place in the design which led to only attracting customers who like the small or the medium-sized cars. Its also that the every employee is like a leader in the Saturn corporation which means they will be multiple ideas coming up, but I feel that they must be only one leader or a smaller group ,who is well experienced in this field and can finalize on the decision.

It was also the inability of GM to save Saturn, although GM spent a lot of money on Saturn it was not much looking into the developments happening in Saturn which led to a disaster. Even, Saturn must have looked at other international companies rather than staying on for Penske Corporation to take it which finally rejected.

Finally, Saturn has entered into a dark phase where even the GM has decided to shut down Saturn by October 2010.All its existing dealers will be able to take their cars but the production has been halted already in October 2009. If Saturn would have got a good number of dealers for it, it would have sustained. I feel they was no proper planning taking place as to how the end item would attract different people. This has finally led even around 50 GM Employees to leave the company and go away. Hence ,I feel a better planning from starting on the end item must have made Saturn the other way round.