General Motors to Shut Down Saturn

The CEO of General Motors,Fritz Henderson, said in statement that Saturn and its dealership network will be phased out. The Bloomfield Hills, Michigan based auto retailer says an agreement with another manufacturer to continue producing Saturn vehicles after General Motors stopped making them fell through, leading Penske to terminate talks with G.M.

In June, Penske agreed to take over the Saturn brand and related dealerships. G.M. agreed to produce the vehicle for a limited period of time. The deal between Penske and G.M. had called for G.M. to continue building Saturn vehicles only until 2011. Penske had initially hoped to close on a deal to buy Saturn as soon as this week.

Saturn is one of four brands that General Motors plans to eliminate in the United States. It is shutting down Pontiac by the end of 2009, recently sold Saab to a company in Sweden and has a deal to sell Hummer to a Chinese manufacturer.

General Motors came out of bankruptcy in July and stated the it hoped aimed to finalize the agreement with Penske in the third quarter -- a deal it had said could preserve more than 350 dealerships and 13,000 jobs. With that deal now off, it is uncertain as to what will happen to the 13,000 jobs.