GM Said to Study Dropping Pontiac, GMC as Savings Push Deepens

GM Said to Study Dropping Pontiac, GMC as Savings Push Deepens http://tinyurl.com/ct5cvs
April 15 (Bloomberg) -- General Motors Corp., facing a June 1
U.S.-backed bankruptcy, may drop its Pontiac and GMC brands as part of broader cost-cutting moves, people familiar with the discussions said.
GM’s Chevrolet, Cadillac and Buick brands are likely safe, said the people, who asked not to be named because decisions aren’t final. GMC and Pontiac are being studied as part of talks with an Obama administration task force assessing whether GM can be restructured without bankruptcy, the people said.
Shedding Pontiac or GMC would mean a deeper cut into GM’s portfolio of eight U.S. brands than in its Feb. 17 blueprint for keeping $13.4 billion in federal loans. GM said then it would keep Chevrolet, Cadillac, Buick and GMC and retain Pontiac as a niche line while selling or closing Hummer, Saab and Saturn.
GMC has a better chance of surviving than Pontiac, one of the people said. GMC’s lineup consists only of light trucks such as the Sierra pickup, while Pontiac’s offerings include the descendants of the brand’s high-performance 1970s models.
Among the decisions yet to be reached is what would happen to Pontiac or GMC should Detroit-based GM opt not to keep them, the people said.
President Barack Obama ordered GM to revamp its survival plan and wrest larger cost reductions from unions, debtors and within their own organizations. Chrysler LLC, which borrowed $4 billion, was given a May 1 deadline to finish reorganizing and merge with Italian automaker Fiat SpA.
‘Aggressively Restructure’
“We are continuing to assess our global operations, brand portfolio and nameplates, and will take further actions to more aggressively restructure our business,” said Renee Rashid- Merem, a GM spokeswoman. “It’s premature to comment on what those actions could entail.”
A Treasury spokeswoman, Jenni Engebretsen, had no comment.
The reassessment of GM’s earlier decision to keep Pontiac and the future of all of the brands are among topics in meetings this week between executives of the biggest U.S. automaker and a Treasury team led by adviser Harry J. Wilson, the people said.
The number of brands is also part of a discussion on how to speed up the elimination of GM’s 6,200 dealer locations to 4,100 sites, said one person.
GM gained 11 cents, or 6.2 percent, to $1.89 at 6:40 p.m. in New York Stock Exchange composite trading. The shares have tumbled 90 percent in the past year amid fears of a collapse by the company, which has posted $82 billion in losses since 2004.
Bankruptcy Preparation
GM has stepped up planning for both a new business model and a potential bankruptcy since March 29, when Obama asked Rick Wagoner to step down as chief executive officer and said the government would support a “quick-rinse” bankruptcy to cut debt and other costs.
New CEO Fritz Henderson has said that while GM would prefer restructuring without a bankruptcy, Obama’s new demand makes a filing for court protection more probable. A GM bankruptcy will likely result in the creation of a new company that keeps only the best brands and other assets, people familiar with those plans have said.
GM, which turned 100 in September, established the Pontiac division in 1926. Sales peaked at 896,980 in 1978, according to trade publication Automotive News. GM sold a record 9.55 million vehicles worldwide that year, which came at the end of an era when Pontiac won notice for sports coupes such as the Firebird.
Pontiac sales fell 25 percent to 267,348 in 2008. Chevrolet and Cadillac are GM’s strongest brands and Buick is popular in China, said the people familiar with the automaker’s discussions.
GM said today it has “multiple bidders” for its Saturn dealer network, including a group let by Oklahoma City private- equity firm Black Oak Partners LLC. Potential buyers for Hummer also have signaled their interest, Henderson said last month.
Saab, based in Trollhaettan, Sweden, filed for protection from creditors on Feb. 20 after GM said it will cut ties by the end of the year.
--
Civis Romanus Sum

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Jim Higgins wrote:

Great, unless they rebadge some products that would mean the death of the two GM products that I'd be most likely to consider for purchase (Solstice GXP and G8)
way to go GM!
nate
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Agree 100%. Way to go GM, and President Obama, who suddenly has become an expert on how to run a car company. He knows exactly what the public wants, and SHOULD force a company such as GM, that makes people buy vechicles they do not want, such as the Chevy Silverado, into making something the public DOES want, such as a wheelchair.
Everyone knows that those 267000 purchasers of Pontiacs last year ( I am one of them) will gladly move over to the few reamaining GM brands when they are ready to purchase their next vechicle. It worked wonderfully well for them when they shut down Oldsmobile a few years back, didn't it?
If you are seriously considering purchasing a Soltice GXP, G8, a full size pickup, or even a Vette in the next couple of years, (I LOVE my G8!!!!!), get it while you can. Thanks to President Obama, and his new puppets running GM, you will soon either not be able to purchase such vechicles, or not be able to recognize them as the type of vehicle you once loved and wanted to own!
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I have heard the phrase in talks about keeping Ponitac alive as a "niche" division, a whole lot lately.
Does anyone know what that means???
Does it mean that (heaven forbid) the brand will be kept alive for REAL car enthusiats, such as those wanting to own a Soltice GXP, G8, or, perish the thought, a rebadged FIREBIRD???????
Or does it simply mean making wheelchairs, and possibly skateboards, and putting the Pontiac emblem on them????
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On Apr 16, 12:53 am, snipped-for-privacy@hotmail.com wrote:

That would be awesome, actually. There's a lot of unnecessary crap on the market (e.g. three different badge-engineered versions of the same platform) and very few unique, exciting choices.
nate
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I wouldn't mind seeing that happen. I just don't think it will. See, we are being told the public does not want such things.
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GM should stop producing cars in US and concentrate its effort on China and India.
IBM is doing similar for its operations.
They already moved all PC builoding to Cina and are now firing most of their emploees and moving to India.
The price for qualified workers in India is 10% of similar workers in US.
So it looks like a very long process of deflation and recession in the USofA or the new USSR.
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