Penske: The driving force behind Saturn deal

For Roger Penske, car racer turned billionaire - and, as of yesterday, likely savior of the Saturn car brand - it all started back in 1963, at the corner of 48th and Chestnut Streets.

He still remembers, even now, even at age 72, even from atop his automotive empire all the way out in Michigan, the way it went down.

"I was working for Alcoa down at Two Penn Center and making $375 a month," recalled Penske, chairman of Penske Automotive Group Inc., which intends to buy the Saturn brand, save its 350 dealers from extinction, and keep the punchy car line in production through 2011 - or longer.

Penske was a fearsome race-car driver speeding toward a legendary career. But he was also a family man with a college degree and a Center City sales job.

He had gotten to know George McKean, a Chevrolet dealer who had lost his son. "He said, 'I'll pay you $2,000 a month,' " Penske recalled. McKean would make him general manager of the place now home to Central City Toyota.

Penske had been a car nut since he was a kid. "I couldn't get up there fast enough."

He ditched the speedways, got a business loan, and bought the place in less than two years. It was easier to get the loan without banks worrying about him getting into a crash before he could pay it off.

"That was really the start of my automotive career," Penske said. "I owe a lot to West Philadelphia."

And today, Saturn dealers across the nation owe Penske a debt of gratitude and quite possibly their livelihoods. If the memorandum of understanding with General Motors Corp. turns into a done deal in the months ahead, dealers on GM's chopping block a few months ago will have a new shot.

"To me, Penske means success. To me, Penske means driven. Respect," said Fred Beans, whose Doylestown Saturn was among the first 100 in 1990. He opened a second, in Limerick, in 1996.

"I don't know Mr. Penske personally, but I don't know of anything Mr. Penske has done that hasn't been successful," Beans said.

"I think there's hope now," said Beans, a longtime admirer of Penske's who said he would one day like to meet him, to watch him in action.

"He works 14 hours a day," Beans said in awe. "And what I heard about him when he was a younger guy is that he eats Coca-Cola and crackers, and that's a meal."

In addition to potentially saving franchise owners, Penske's offer - which GM accepted but whose price tag was undisclosed - will retain all 13,000 Saturn employees.

GM will manufacture the Saturn Aura sedan and the brand's two SUVs, the Vue and the Outlook, as a contractor to Penske through 2011.

Penske said he expected the Saturn nameplate to live on well beyond 2011, but he offered few details for now.

Observers said it would come as no surprise if Penske partnered with a foreign auto manufacturer to introduce a new line of cars to U.S. buyers through the existing Saturn dealership network. Penske introduced Daimler AG's Smart car to U.S. buyers through an exclusive distribution arrangement.

"If I were a Saturn dealer, I would bet on Roger," said Sheldon Sandler, founder and managing director of Bel Air Partners. The Princeton-area company brokers auto-franchise sales, and Sandler has had business relations with Penske for about 12 years.

"There's only one entity in the world that could pull this off, and that would be Penske," Sandler said. "This is an incredibly complicated proposition."

"He's a very, very astute businessman, and he wouldn't get involved in a transaction of this size or this magnitude if he didn't think it was a good decision, a good business decision," said Penske's brother, David Penske of Newtown Square, a longtime local auto dealer himself.

"You can rest assured that they've done huge due diligence to see that this is the appropriate thing to do."

Roger Penske came to Philadelphia after graduating from Lehigh University in Bethlehem in 1959 with a business degree.

"From a young man, he was always working. That was the way we were brought up," said David Penske, who worked with his brother in West Philadelphia before buying the franchise from him and moving it to King of Prussia. Penske Chevrolet shut down last fall under the weight of the recession.

"We had summer jobs, we worked holidays, delivered flowers, delivered newspapers," David Penske said. "As kids growing up, that's what we did. And he just took it to a higher level."

Roger Penske first made an international name for himself on the Formula One circuit in the early 1960s.

His greater glory in the sport came as a race-car developer and team owner. His Penske Racing organization is arguably the most dominant race team in America. Its drivers are perennial winners in NASCAR and Indy car races - on Memorial Day, the team took another Indianapolis 500 win via driver Helio Castroneves.

Penske has applied that same competitive focus toward his business ventures.

Through the years, his businesses have grown to include transportation enterprises and engine manufacturing.

Today, they include the privately held $18 billion Penske Corp. and publicly held Penske Automotive, whose dealership network is the second largest in the United States.

Well-known locally is Penske Truck Leasing Co. L.P. in Reading, a partnership of Penske Corp. and General Electric.

Penske's discipline and drive are renowned.

"I could tell you some stories that would raise the hair on the back of your neck about Roger," Sandler said. "You've heard the expression 'works 24-7' ? That's Roger.

"I've had meetings with him on a Friday night at 11 o'clock . . . in the parking lot of a car dealership after he just landed his plane from England," he said. "This was, like, two years ago. He was deciding whether to buy a car dealership . . . we had for sale in central New Jersey."

Penske is extremely organized and surrounds himself with talent, Sandler said. And his stamina is staggering.

"He's got the energy of a teenager," Sandler said. "He certainly outworks me. I'm not in his league. And I'm 64."