In ancient times, sorcerers known as alchemists claimed that they could transform lead into gold.
[img]591|left|||no_popup[/img] Kings and emperors from Mesopotamia and Persia to India and China secretly sought the services of these great conjurers.
These magicians were pursued as a panacea, a cure for all evils. Absolute power would flow to the ruler who could transmute the worthless into something of incalculable value.
In the end, when the incantations failed, the despots were left as they started; with piles of lead and mountains of debt.
Today, bankruptcy may be the new alchemy.
Magic Has Its Limits
Two months ago, Chrysler was nothing more than a worthless heap of junk. Then, poof. With the wave of a gavel and a terrific fanfare, it became something different … Italian.
But when the mists clear, no amount of potions or charms will change a Dodge into a Ferrari. It still will be a car that nobody wants to buy.
General Motors Corp. has won approval from the bankruptcy court to sell most of its assets to a U.S. Treasury-funded buyer, cementing the Obama administration’s efforts to remake the auto industry, leaving restructuring professionals with several years of work to liquidate the leftovers.
While Cadillac and Chevy may become the next Volga, General Motors’ decision to sell its Saturn division to Indy racing legend Roger Penske may have been its greatest act of wisdom, its only real chance of leaving a lasting legacy on the American automotive landscape.
In addition to running the most successful car racing team in history, Penske, a billionaire in his own right, presides over one of the largest auto dealership networks in the county. Penske also operates a successful nationwide truck leasing company and is the U.S. distributor of the SmartCar.
[img]592|left|||no_popup[/img] Penske’s purchase of Saturn could lead to the development of a new paradigm in the American automotive industry.
Until 2011, G.M. has agreed to supply Penske with three Saturn models. After that, Penske will be free to shop the world for cars he can sell under the Saturn banner.
Why He Could Be the Answer
Penske understands that American buyers don’t really care who makes the cars they drive as long as it suits their needs. Chrysler and G.M. have failed because they never have grasped this concept.
To its credit, G.M. allowed Saturn to develop as a quasi-independent division. Although it never has grown to meet its initial expectations, Saturn has retained a loyal following.
G.M.’s deal with Penske saves 13,000 jobs and is a reprieve for 350 Saturn dealerships that were set to close. With the news that Penske is set to take over, Saturn dealers across the country have been reporting a renewed interest in their cars and a bump in sales.
Penske is known for his tireless attention to detail and continuous demand for excellence. If he brings these same qualities to Saturn, America finally could have a car company to rival the Japanese.
Maybe in Penske the auto industry has finally found a modern-day alchemist who can spin its lead into gold.
John Cohn is a senior partner in the Globe West Financial Group, based in West Los Angeles. He may be contacted at www.globewestfinancial.com
