Saturn dealers may form independent company

Haywood "Huddy" Hyman Jr. was among the first auto dealers in the nation to sell Saturn automobiles when General Motors Corp. started rolling the new brand out of a plant in Spring Hill, Tenn., in 1990.

Now, the financial crisis at GM has thrown the future of Saturn in doubt, and Hyman and other dealers across the nation are looking for ways to keep it going.

General Motors said this week that it likely would phase out the Saturn brand by 2011, but the company remains open to the possibility of Saturn dealers or investors acquiring it.

"It is pretty distressing," Hyman said yesterday of the possibility of losing Saturn. "A lot of retailers hate to see it go because it was such an innovative brand."

Hyman had owned as many as five Saturn dealerships in Virginia.

He now owns two -- one on Midlothian Turnpike in Chesterfield County and one in Newport News. In November, Hyman closed his Saturn of West Broad store in Henrico County and combined the operation with the Midlothian Turnpike location to save money because of declining sales.

If GM phases out Saturn, "we would just be in the used-car business more heavily," said Hyman, who also operates Land Rover Richmond and a used-car lot on Midlothian Turnpike.

Yet Saturn's network of more than 200 dealers, who own about 450 dealerships, are trying to find a way to keep the brand going, possibly by forming an independent company of their own, Hyman said.

The dealer network could strike a deal with foreign automakers, especially in China, who are looking for an existing dealer network to establish sales of their brands in the United States, Hyman said. Several foreign firms already have ex pressed interest, he said.

George Hoffer, an economics professor at Virginia Commonwealth University who studies the automobile industry, also sees a viable scenario in which GM might continue to supply Saturn dealers with automobiles while the dealer organization works to lure investors from overseas firms.

"You need an Indian or Chinese auto firm who could use the Saturn dealers as a mechanism to launch their cars in the United States," he said. "They would find no better dealer organization than the Saturn dealers."

Hyman said he decided to become a Saturn dealer in 1990 because the concept was innovative for the domestic auto industry. "It was just a new way of doing business," he said.

Saturn was conceived by General Motors in the mid-1980s, partly as a result of the early 1980s recession and as a defense against competition by small, imported cars, Hoffer said. The company created a new franchising system for Saturn with exclusive sales territories and set a one-price policy for Saturn vehicles.

Yet Hoffer and Hyman said Saturn has suffered from misfires and neglect by GM, which starved the brand for years as the economy boomed and the company focused on other big-profit products such as sport utility vehicles.

"We just didn't have any new product from really about 1998 up until last year," Hyman said.

GM may be cutting Saturn loose, but the Saturn dealership network "is a unique, small network," Hyman said. "It has got value somewhere out there."

Contact John Reid Blackwell at (804) 775-8123 or .