Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 10, 1993 TAG: 9301090046
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
SOURCE: JIM MATEJA KNIGHT-RIDDER/TRIBUNE
DATELINE: DETROIT LENGTH: Medium
SATURN CORP. TO BREAK EVEN THIS YEAR
Saturn Corp. says it will break even in 1993 and report its first profit in 1994 - a dozen years after the General Motors Corp. division was proposed."We're finally out of the development stage and into the growth stage," Saturn President Richard "Skip" LeFauve said last Thursday at a news media preview of the Detroit Auto Show.
"In 1993 we'll break even. We'll earn as much as we spend for the first time. And we will be profitable the following year," LeFauve said.
Donald Hudler, vice president-sales, described Saturn's fortunes a bit more vividly:
"Only two years ago there were people who thought we weren't going to make it, but we've moved the needle from stupid to lucky."
LeFauve said Saturn sold 196,126 cars in the 1992 calendar year, more than double the 74,493 sold in 1991 and a dramatic leap from the 1,881 sold in its first year on the market, 1990.
The Saturn division was proposed in 1982 by then-GM Chairman Roger Smith. It became reality in 1985, when a $3 billion investment was approved. But it took until 1990 for the first cars to be built, under a quality vs. quantity plan designed to match the Japanese at building small cars at a profit.
LeFauve said Saturn output will hit a 300,000 annual rate by midyear, with a swing from 1,000 cars five days a week to 1,000 cars six days a week.
With overtime, Saturn could build 320,000 cars annually. But it is considering a second plant to increase output, LeFauve said, although he refused to talk specifically about time, location or capacity.
LeFauve said in an interview later that despite the increase in production, the automaker has dropped plans to add a more luxurious SL3 sedan to its lineup, which includes base, SL1 and SL2 sedans, SC1 and SC2 coupes and SW1 and SW2 station wagons.
"The SL2 accounts for about 50 percent of our sales, and we decided we didn't need the SL3. If we added more models, we'd only add complexity and affect quality, and we're not going to do that.
"What we have now is going to be our product line," he said, though he added that a long-planned convertible version of the coupe remains in the works.
Hudler said Saturn has 232 dealerships in 43 states and will add 75 in 1993.
LeFauve denied that Saturn and Oldsmobile plan to join forces, which has been rumored the last few months.
"We haven't even considered a merger with Olds; the only merger talked about is a merger of the Saturn philosophy with Olds," he said.
In a separate development, Thomas Elliott, executive vice president of American Honda, announced the Japanese automaker will participate in the Indy Car World Series race circuit starting in 1994 and has formed a U.S. subsidiary to supply V-8 engines for a Honda Indy team. The team hasn't been named.
Elliott, who last Wednesday saw his Honda Accord lose the title of best-selling car in the industry to the Ford Taurus for the 1992 calendar year, vowed to give Ford "a good fight in 1993."
He said Honda will bring out a new Accord in the 1994 model year.
Elliott said Honda is "well under way" in plans to bring out its first minivan "in the next couple of years."