Jim Scherer’s family is comfortable with innovation. The trend started in the early 1900s when his great-grandfather accepted the offer of David Dunbar Buick to sell something called an “automobile.” Innovation was then kept in the family when his father opened Saturn of Peoria in 1992 under the guise of a “different kind of car company.” Today, Scherer is swept up in the tradition as his and other Saturn dealerships are bought by Roger Penske in an unprecedented move for the car industry.
In the News
General Motors’ June 1st filing for Chapter 11 bankruptcy and other recent financial troubles sparked the latest in a series of events for the Scherer family. As part of its restructuring plan, GM decided to sell its Saturn brand. On June 5th, GM announced that Penske, longtime member of the racing and auto scene, would be the new owner of Saturn, but there’s an unusual difference. “[Penske] bought Saturn–the name. He bought the name; he didn’t buy a plant,” Scherer explained.
According to Scherer, no one has ever purchased a car company without owning a manufacturing plant, as brands usually make their own cars to sell at dealerships under the same name. But in Penske’s plan, the Saturn dealerships will instead competitively shop for the cars they want to sell from any automaker’s manufacturing plant. Scherer explained the process, saying, “Mitsubishi could build a car for Saturn…even though Penske doesn’t own Mitsubishi. He can still strike a contract to build cars for the next several years for Saturn.” Scherer sees this system bending more quickly to the desires and demands of the customer than the current system in which he and three other generations of his family have worked.
A Family History
With four generations in the business, the Scherer family knows cars. Originally, though, the Scherers were better versed in the farming implementation business, as Jim’s great-grandfather, Otto, began by selling farming equipment in the late 1800s and early 1900s. However, a meeting with David Dunbar Buick changed its direction a bit, and the family moved into selling cars through their Buick, Pontiac and Isuzu dealership, until it was sold in 2005.
After selling the Buick dealership, the family focused on its two Saturn dealerships. Jim’s father, Jim Sr., currently owns Saturn of Peoria, which opened in 1992, and Jim, with another investor, owns Saturn of Bloomington-Normal, which started its engines in 1999. Jim, however, runs both of the stores as the retail operator.
Scherer said he was born into the business and stayed with it even after studying computer science in college. He acknowledges that one had nothing to do with the other, but said working with people was ultimately what he wanted do, and that is why he stayed with the family business. “I have very, very talented family members who could come in here and run circles around me maybe…but they have to be willing to want to do it.”
So today, Scherer steers at the helm of the family business with his dad for guidance and his sister, Jody Maske, doing administrative work. It’s still a family business, just like when it started in the 1900s.
A Different Kind of Car Company
GM unveiled the Saturn brand in 1983 as “a different kind of car company.” The company instituted a lot of changes, according to Scherer, which made quite a difference with customers. Not only did the company ask its retailers to wear suits and ties when dealing with customers, but their cars got a new look as well, with “polymer panels, which is a fancy word for plastic. But what was neat was those panels never dent, never ding and they don’t rust.” Scherer also said that they had a “no haggle, no hassle” method of sales. If Saturn was willing to sell their car for $23,000, why put $25,000 on the tag?
To show that they were concerned with good service first and foremost, Saturn set its premises up differently as well. Scherer said, “If you look at older dealerships, the service department is in back of the facility, which, theoretically…if it is in back of a facility, do you think it comes first or second? It comes second because it is in back. Saturn said, let’s bring it up front because it takes hours-maybe days-to buy a car, but it takes years for their service.”
Even with these and other differences in the company, Saturn never made money for GM. Part of the reason for this may have been because even though Saturn was supposed to be a new company, it was still governed by GM principles and rules. “Currently we buy our cars through General Motors, but under their rules, under their warranties, under their marketing, under their expenses,” Scherer said. “Right now, GM is in bankruptcy, and when we were at our best, we were independent from GM. One thing that we are asking for the most is we want our independence as soon as possible.”
Driving With a Compass
Saturn will not see that independence for a few years yet. GM will still, under contract, supply cars to the Saturn dealerships for the next two years. During that time, Penske will be looking for other manufacturers of the cars he wants to sell. It will be at that time that the process in which Scherer, his great-grandfather, grandfather and father have all participated will change. “The 100-year-old business plan of a manufacturer owning the name, and you just building the store and selling whatever they give you…has changed once again. Penske is the reason for that. What better company to take over such a radical change than Saturn when that was how we were started-trying to change the business to begin with?”
Not only does Scherer see Saturn benefiting with more models to sell, but he also sees the customer having a say in what the dealerships sell. “I see the future of Saturn having the consumers’ demand be the compass [with] which we choose our product and do our business.” Overall, Scherer summed up his mindset: “I’m pumped…Our future is about as bright as I’ve ever seen it.” iBi