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Saturn of GM

Saturn has never turned a profit for GM. Why hasn't Saturn turned a profit? Was escalation of commitment in play in GM's decision? Why?

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Saturn has never turned a profit for GM. Why hasn't Saturn turned a profit?

When General Motors (GM) announced that it was forming Saturn, an idea of a company within a company, it was a great hit. The cars were consistently topping the quality charts, workers had input in the workplace and customers were very satisfied with the best buying experience in the industry. It had a noble idea of having both wonderful dealers and consumers who will be enthusiastic of the product. "The Saturn experience," became the talk of the industry with excellent service and customer satisfaction starting with the sale at the dealer and ran through the life of the car.
However, after 14 years of operation, the notion of a tiny independent company making low-margin small cars has proven to be totally unworkable. One reason of its decline is the tough competition from Japan, and later Korea, which ...

Solution Summary

The solution discusses the reasons why Saturn has never turned a profit for GM and if there was an escalation of commitment in GM's decision. References included.

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