Saturn has bidders. That raises thorny questions.

Who would want Saturn? At least one bidder has popped up with an interest in buying the brand to set up a retail network to sell foreign cars and energy-efficient vehicles. An investor group that includes private equity firm Black Oak Partners has contacted both GM and the Treasury Department about buying the brand. The goal would be to stock Saturn retailers with green vehicles from small startups and high-mileage cars from foreign carmakers who would be new to the U.S. market. “We’re looking at a rebirth of the Saturn brand,” says John Pappanastos, CEO of EFG Companies, which is involved in the acquisition. “The brand has done a pretty good job of finding consumers who like the no-haggle purchase and a green vehicle.”

Selling Saturn as a distribution chain does bring up some thorny questions for GM and the Treasury Department. On one hand, it would spare GM from having to compensate its retailers if the automaker—which is struggling to restructure and avoid bankruptcy—just kills off the brand. It would also save GM’s dealers, some of whom sell Saturn cars and other GM brands, from financial distress. And it would preserve some 15,000 jobs. On the other hand, Black Oak’s group wants to form its so-called new Saturn Distribution Corp. to possibly sell cars from Chinese, Indian and European carmakers who aren’t here in the U.S. Since starting a retail chain is a huge expense, the group would knock down a big barrier to entering the U.S. market and give GM, Ford Motor and Chrysler more foreign competition in the long run. Counters Pappanastos: “The cars would only sell if there is demand from American consumers.”

But in the end, GM will have no choice. Dispatching Saturn without buying off dealers would save GM a lot of money and headaches. The company wouldn’t have to buy back cars and parts and the new company would help phase Saturn out. If a deal is done, GM will supply Saturn cars through 2011. Saturn’s current retailers would own their stores, while the investor group would handle marketing, logistics and find carmakers who want to sell their vehicles in the existing stores. Saturn Distribution would even service cars owned by Saturn buyers, keeping them happy. GM could even use the channel to sell some other cars, Pappanastos says. For its part, GM said only that Black Oak’s group is just one of several bidders. But the company will decide soon what to do with Saturn and its other brand on the chopping block, Hummer. If this deal happens, Saturn will literally be what it was designed to be. It’s a retail experience. It will just sell a plethora of brands.

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