It's been more than a week since General Motors announced it would shut down its Saturn brand after talks to sell it to Penske Automotive Group (PAG) fell apart. But time hasn't softened the sting for Stuart Lasser, who owns three Saturn dealerships in northern New Jersey. "I'm still shell-shocked about the whole thing," he says.

Lasser, who has already stopped selling autos at one dealership and plans to turn another into a used car lot, is hardly alone. Some 350 Saturn franchises across the country face a bleak future now that GM has said they have until this time next year to sell their remaining cars and shut down.
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Saturn Dealers Face Road's End
Stuart Lasser holds a goodbye letter to his customers at the Saturn dealership he owns in Livingston, N.J. He suspended sales there after General Motors and Penske couldn't agree on a deal to save the brand.
Tim Catts, DailyFinance
Tim Catts, DailyFinance
"It's a very bitter pill to swallow for Saturn dealers because their last and best hope was Penske," says Sheldon Sandler, the CEO of Bel Air Partners, a Montgomery, N.J.-based financial adviser to car dealers.

All told, more than 1,200 auto dealers have already closed this year, according to figures compiled by Urban Science, an auto-industry consulting firm based in Detroit. New Jersey, home to 15 Saturn dealerships including Lasser's, has lost 42. Only eight states have seen a bigger decline this year.

"This was absolutely the perfect storm of problems facing the dealers and manufacturers, and it's really pushed up closings," says Urban Science's Randy Berlin. Thanks to falling car sales, particularly at GM and Chrysler, and tight credit conditions that make it more difficult for dealers to affordably finance their operations, this year is the worst for dealership closings since at least 1990, when Urban Science began collecting data.

As for Lasser, he's moved the unsold cars at his dealership in Livingston, N.J., to another one he owns in Denville, about 12 miles away. The service station remains open, but the cavernous showroom is empty except for a stack of cleaning supplies by the floor-to-ceiling windows that face the lot. Lasser says he'll have to lay off 60 of his 80 workers, probably by the end of the year.

According to Bel Air Partners' Sandler, "20 or 30" Saturn dealers may be able to turn to another manufacturer, but the vast majority will go dark.

"Four years ago, when we were selling 17-plus million cars and trucks a year in the United States, there was no shortage of manufacturers that were looking for a toe-hold in the U.S. market and would have snapped up the Saturn distribution network immediately," says Jim Appleton, president of the New Jersey Coalition of Automotive Retailers. "But there isn't a lot of room in the market for new players right now."

For his part, Lasser has already made overtures to Korean automaker Kia. He's even gone as far as taking GM to court earlier this year to win the right to sell Kias alongside Saturns at one of his dealerships.

Shocked by how quickly Penske's deal with GM fell apart, some dealers say they're not yet looking to the future.

"My focus right now is to do my job at Saturn," says Bob Maguire, who owns two Saturn dealerships in southern New Jersey. "I've been told that next October is the end of the line, so that gives me a year."

'What do I do after October 2010? I have no idea at this moment. That's a work in progress."

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