Page last updated at 14:58 GMT, Friday, 5 June 2009 15:58 UK

GM in deal to sell Saturn brand

A Saturn dealership
Saturn is just one of the brands that GM is looking to offload

Troubled US carmaker General Motors (GM) has reached a deal to sell its Saturn brand to former race car driver Roger Penske.

Penske Automotive Group would take over the brand, service operations and dealership network.

Earlier on Friday, court papers showed that GM hoped to return to profitability in 2011 after emerging from bankruptcy protection.

A dramatic slump in sales forced GM to file for protection this week.

The company's financial adviser, Evercore Partners, estimates that GM will lose $17.5bn (£10.9bn) this year before making a profit of $3bn in 2011.

The estimate is based on US auto sales of 16 million vehicles a year, up from current levels of less than 10 million.

Gas-guzzling

GM is in the process of cutting costs and selling off a number of its brands.

The deal for Saturn should secure the immediate future of the brand's 350 dealerships and 13,000 employees.

"We will be selling as many GM cars under the Saturn brand as possible," Mr Penske said.

The carmaker also announced this week that it had agreed to sell its Hummer brand of sports utility vehicles by the end of September.

However, reports suggest that a deal with China's Sichuan Tengzhong Heavy Industrial Machinery may be blocked by Chinese regulators.

Analysts say that the gas-guzzling image of Hummer does not sit well with China's attempts to develop an auto industry focused on smaller, fuel-efficient cars.

The carmaker has already said it will discontinue its Pontiac brand and it has agreed the sale of its European arm.

Bankruptcy protection

GM's move into bankruptcy protection is backed by the US government, which is expected to take a 60% stake in the carmaker.

The White House is also putting another $30bn into GM on top of the $20bn it has already given the carmaker.

It is expected that GM may be able to exit bankruptcy protection within the next 60-90 days.

US Chapter 11 bankruptcy protection gives an American company time to restructure its finances while being protected from its creditors.

GM, along with carmakers across the world, has suffered from a massive drop in sales during the economic downturn.



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