He sold his Michigan retail operation to acquire two existing Saturn stores in Fort Myers and Naples, Fla., in 2002. Within three years, Saturn management asked him to expand, moving his Fort Myers store to a new site and constructing a third store in Cape Coral, Fla.
Goodman was bullish on the brand even though, by that time -- 15 years after Saturn's inauguration -- there had long been signs of trouble.
Saturn's national sales volumes had peaked in 1994 at 286,003. Its original concept of selling small cars to win back market share from Asian imports had run into surging American demand for large cars, pickups and big SUVs -- none of which Saturn offered. Saturn had flopped at its vow to export cars to Japan. Its small cars were growing stale, and its foray into the midsize segment with the L-series sedan had failed. Some of its original gung-ho retailers had sold their stores. Others were convinced that, given a new wave of relevant products, Saturn would become revitalized.
Skeptics had made much about the enormous investments that GM had poured into Saturn over the previous decade. But there were also corporate assurances that the brand would continue on. New products were rolling out, such as the stylish Sky convertible roadster. Given an infusion of new product, company executives doggedly believed, Saturn would be profitable.
Saturn was structured as a wholly owned subsidiary of GM, much like a privately held company, and did not reveal its earnings or losses.
The suit claims that the circular's financial information focused on a legal entity within Saturn known as "Saturn Distribution Corp.," which existed only on paper, without employees or business infrastructure.
The distribution entity was created to act as franchiser for Saturn Corp. And although it recorded some income from financial activity, it did not reflect the true condition of Saturn Corp., Goodman alleges.
In his statement to Automotive News, Deloitte spokesman Gandal wrote, "We are committed to conducting audits of the highest quality and stand fully behind our audit of Saturn Distribution Corporation's 2004 financial statements, which clearly disclosed the relationship between SDC and Saturn."
According to depositions in the Goodman case, even Saturn's senior executives were not privy to its profits or losses.
Jill Lajdziak was involved with the brand throughout its existence. In 1999, she was named Saturn's vice president, and in 2004, her title was changed to general manager. In the course of a lengthy deposition in the Goodman case two years ago, Lajdziak insisted that she never knew whether Saturn made or lost money. While she was responsible for knowing the profitability of Saturn's individual vehicles, she said in the deposition, she did not know how the company was faring as a whole.
According to a transcript of the deposition, Lajdziak repeatedly said she could not remember if all, or any, of the Saturn vehicle lines had ever made or lost money.
Similarly, Edward Toporzycki, Saturn's CFO from 1997 to 2002 and now GM's executive director of finance, said in a deposition that he did not know the financial condition of Saturn as a whole while involved with the subsidiary.
"Do you know if Saturn Corporation was solvent during the time period you served as a CFO/vice president of Finance for it?" Morganroth asked Toporzycki, according to a transcript of the deposition.
"No. No. No, I can't say," Toporzycki answered.
"You don't know one way or the other?"
"No," he repeated.
"Did you ever have any communications with anyone while you were serving as CFO/vice president of Finance [at] Saturn Corporation as to the solvency or insolvency of Saturn Corporation?" Morganroth asked.
"Not that I recall," Toporzycki said.