Sunday, January 14, 2001
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Posted on: Sunday, January 14, 2001

CEO says timing right for Saturn's SUV

The Tennesseean

Since she took over as chairwoman, president and chief executive officer of Saturn two years ago, Cynthia Trudell has had quite a ride.

A chemist by training with two decades of experience with Saturn corporate parent General Motors Corp., she has become perhaps the most prominent woman in the male-dominated automotive industry. Meanwhile, she has watched sales of Saturn models continue a three-year-plus decline.

She helped launch Saturn’s L-series midsize sedan and wagon, built since last summer in Wilmington, Del. But she also saw the plant there downsized, laying off about 500 workers and cutting production because of disappointing sales.

Trudell is overseeing $1.5 billion in new GM investment at Spring Hill, Tenn., including a new $500 million factory that will build a "global" four-cylinder engine for future GM products in the United States and overseas. This factory also will roll out four new models by mid-decade. The first, the VUE sport-utility vehicle, is scheduled to begin production next year as a 2002 model.

"There’s no doubt these have been challenging times," she said in an interview "Is everything perfect? No. That would be naive. We won’t ever stop working to be competitive. It would be devastating for the people and for the company."

Here’s more of what Trudell had to say:

Q. What does the VUE mean for Saturn?

A. First, it’s going to bring an additional product to the lineup. It’s also a true expression of our innovation, paying attention to the details that customers want. It provides a new perspective on SUVs: The car-based architecture, the ride and handling, the interior of the vehicle · all rolled into one. This is an important vehicle.

People have gotten to understand the great attributes of SUVs, but we always want the next evolution of something. This does that.

Q. With competition in the compact SUV market at a peak and U.S. vehicle sales predicted to slow next year after a predicted record 17 million units this year, will the VUE arrive too late?

A. Oh, no. This is the exciting part: If we had come out with the SUV when everybody said we should have, it would have been body-on-frame (construction, like a truck-based SUV). Now we have the car-based architecture. People are saying, "I want it to ride like a car. I want to be able to step into it with ease. I want it to be easy to repair. I want to know this thing is safe. And I want to drive it and have it fun." This is the time for it.

It’s really interesting what we determine to be a boom. I remember a few years ago with a market of 16.5 million units, we were all excited about that. I think what’s critical in this market is to have the right product for the right customer at the right time.

Q. Saturn’s S-series sales have been disappointing for more than three years. Is the future of Spring Hill riding on the VUE?

A. No. Sales for the S-series aren’t what we’d like them to be. But we’ve increased (Saturn’s overall) sales by 20 percent to 25 percent. That’s not anything to sneeze at. In Spring Hill, we’re holding our own in this market. Our S-series market share is down probably one-half point to a point. It hasn’t been that much of a deterioration. There’s a lot more competition, and it’s segmenting out.

We’ve certainly lost market share but not to the extent that people think we have. We’re not losing our shirts or anything. The SUV provides the opportunity to balance out (business) cycles and give customers greater options and continue to build that (product) portfolio. The VUE is an important one, but it won’t be the be-all-and-end-all at Spring Hill.

Q. Besides the VUE, Spring Hill will commence production of a newly designed sedan and coupe, and an unnamed fourth vehicle, within the next four years. What sort of new product is Saturn likely to build?

A. We’re working our options right now and looking at what makes sense for the brand. I think the biggest thing is the opportunity to continue building the portfolio. The next product has to have versatility and functionality. That is the wave of the future. Now, what that is · there’s a lot of options for that. It’s a little like the body-on-frame SUV vs. the car-based SUV: We want to make sure we hit the market at the right time. You can come out with something that can be really off the mark. We’re weighing our options.

Q. What does the $1.5 billion investment from GM mean to Saturn?

A. It allows us to efficiently grow the brand. It gives us a manufacturing system that has more flexibility. We already have a lot of flexibility in our production system at Spring Hill. Now we will have the wherewithal to balance the production very nicely. It gives us more flexibility for future products.

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