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GM to dissolve Pontiac, slash dealers and plants by end of 2010

04/27/2009, 8:45 AM

By Nick Aziz

General Motors on Monday confirmed rumors regarding the future of its Pontiac division, indicating the storied brand will be eliminated by the end of 2010 at the latest. The company said it will also sell or shut down Saab, Saturn, and Hummer by the end of 2009 or sooner. Furthermore, the company will eliminate 13 manufacturing plants (28 percent) by late 2010, while simultaneously slashing its dealer network by nearly half –from 6,246 in 2008 to 3,605, a reduction of 42 percent.

GM says it intends to focus on its four core brands: Chevrolet, Cadillac, Buick, and GMC. CEO Fritz Henderson said speculation about the elimination of Buck and GMC is illogical given the profitability of these divisions. Henderson indicated GM will offer a total of 34 models in 2010, a reduction of 29 percent from 48 on sale in 2008

Regarding Pontiac, some models will disappear sooner than others. GM will kill the G8 sedan by the end of 2009, while the Vibe — which is manufactured alongside the Toyota Matrix — will live on until the end of 2010. Henderson indicated GM is in talks with Toyota over selling its stake in Vibe/Matrix manufacturing.

GM’s new viability strategy also outlines a plan to file for bankruptcy, should lenders fail to agree to a debt-for-equity swap before the government’s imposed June 1 deadline. GM says that if it files for bankruptcy — which is looking likely at this point — it will ask the courts to sell its assets to a new operating company, presumably the ‘good GM’ discussed just a few weeks ago. GM’s remaining ‘bad’ assets would be liquidated.

U.S. hourly employment levels are projected to be reduced from about 61,000 workers in 2008 to 40,000 in 2010, a 34 percent reduction, leveling off at about 38,000 in 2011. This represents a further planned reduction of an additional 7,000 to 8,000 employees compared to the original February 17 viability plan.

In all, the new plan includes a reduction of U.S. hourly labor costs from $7.6 billion in 2008 to $5 billion in 2010, a 34 percent reduction. GM says it will continue to work with the UAW to accomplish this through a reduction in total U.S. hourly employment as well as through modifications in the collective bargaining agreement.

GM says its break-even point for U.S. sales will be 10 million vehicles per year — substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007. GM North America’s structural costs are projected to decline 25 percent, from $30.8 billion in 2008 to $23.2 billion in 2010 — $1.8 billion better than the February 17 Plan.

Monday’s announcement also includes a bond exchange offer for approximately $27 billion of its unsecured public debt. GM’s aim is to convert most of this debt to equity. The company is also in talks with the Voluntary Employee Benefit Association (VEBA) and U.S. Treasury to swap debt for equity. This would effectively make the U.S. government a major shareholder — perhaps the largest — in General Motors. GM expects a debt reduction of at least $20 billion as a result of its bond exchange efforts.

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04/27, 9:28 AM

posted by:

teahead

RIP Pontiac; you’ll be missed; not by domestic haters (90% of posters on this site), but by REAL CAR PEOPLE who like more choice, more competition.

Pontiac GXP…great car I hope will end up as an Impala SS.

04/27, 9:35 AM

posted by:

Chris C.

THERE YA GO UAW! YOU’RE GETTING WHAT YOU AND GREEDY WORKERS DESERVE!

The sad part is, under some f-up’d contract, they will probably continue to receive benefits and pay. Disgusting….

04/27, 9:45 AM

posted by:

Pauly

Chris C. you’re an idiot.

04/27, 9:48 AM

posted by:

HoosierHero

@Chris C. – I would say both workers AND management are getting what they deserve.

I’m sorry to see Pontiac go, but they haven’t really been a viable brand for years. Just another clone of Chevy which is too bad. Hopefully they’ll inspire some new, high-powered models in whatever brands survive under the new GM. I’m surprised to see GMC listed as a core brand.

04/27, 9:53 AM

posted by:

gehrhardt

@HoosierHero: I couldn’t have said it better myself.

04/27, 9:55 AM

posted by:

bd394

Pontiac will not be missed. It about time GM starts shedding some dead skin. I think this is very positive for GM. Better days are coming.

04/27, 9:56 AM

posted by:

zfenderguy

Well, there goes another American icon. I understand that nothing lasts forever in this world, and Pontiac isn’t necessary for the continuation of the new GM, but you can’t help but feel like this is just another chip taken out of the foundation of America. I guess the reality is GM sealed Pontiac’s fate years ago when they turned the brand into a plastic-cladded maker of subpar and not very sporty cars. Sucks worse IMO since they really turned the brand around for the most part in recent years.

And like teahead, I hope the G8 will displace the current Impala in Chevy’s lineup.

04/27, 9:58 AM

posted by:

MiniMan

I’m hoping the G8 GXP comes back as the Impala SS also. After seeing the Chevy Lumina SS in Bahrain all I wanted was for that car to come to the states and it did as the G8 GXP. Now with the demise of Pontiac hopefully it will. The car is Outstanding and with the Impala’s heritage I think it would completely fit in the Chevy lineup.

04/27, 10:14 AM

posted by:

johnnycanuck

And to think Pontiac’s final gift to the world is the G3. Talk about a dagger through the heart.

04/27, 10:20 AM

posted by:

RaineMan

Finally… the shedding of brands begins. If GM can slim down to just Chevy and Caddy they will be in much better shape for the future. It is too bad that Pontiac had to go first. I really like the Solstice and the G8 has nice potential… but the rest of their lineup is crap. I am praying that GMC will be next.

04/27, 10:45 AM

posted by:

bdizzlefizzle

If Chevy lives, then so will GMC as it’s basically dressed up Chevy trucks and SUVs. That means there’s very low cost structure behind their line up, making them super profitable. To non-bean-counters, GMC makes no sense.

Since GM is killing the tie-up with Holden, I’d be very surprised if Chevy picked up the G8. Besides, once the Impala is due to get replaced, the G8 would have been too old to compete.

04/27, 10:51 AM

posted by:

MercMark

Gee whoda thunk it? The US has sold their soul.
A**holes buying asian cars, people dumping tons of cash into China through walmart, a flood of ILLEGAL invaders through mexico, and Congress stealing money from the middle class to hand out to the lazy poor.
This is the beginning of the end.

04/27, 11:07 AM

posted by:

Borat

As performance part of company it stopped offering performance since Chicken was cooked. What part of performance we could talk about outside of G8 with V* and and slash box?
The good news for GM there were few and far apart Pontiac dealers already (if any). Most of dealerships are combined into GMC and Buick franchise, so disengagement settlement will be less then painful.

04/27, 11:12 AM

posted by:

CADDY-V

MercMark:
Good points.
This sh*t is fu*ked up.

04/27, 11:18 AM

posted by:

JakeK66

:’( I’ll remember Pontiac like I remember Oldsmobile with a heavy heart.

GM RIP

04/27, 11:25 AM

posted by:

carstuff

“Since GM is killing the tie-up with Holden”

What the heck does that mean? Does somebody have more inside info than I do?

There are less than 20 Pontiac only dealerships left.

04/27, 11:28 AM

posted by:

PontiacNick

This decision is ridiculous. Pontiac WILL be missed. It was GM’s number 3 selling brand. There are a whole host of people who will be ticked off and will never buy another car from GM again. Think of the ill will this will spread to their friends, coworkers, families, etc…. I have bought Pontiacs all my life. I always encouraged my friends and family to purchase GM vehicles. I don’t think that is going to continue. Similarly, the ripple effect is going to spread because they in turn will never consider a GM vehicle again and will pass that ill will along to their circle of friends, family, coworkers, etc…..

How is it that two luxury brands are allowed to survive in a recession/depression but one youth/performance/sporty type of brand cannot survive? Do we really need Cadillac AND Buick? Buick could have and should have been folded into Cadillac. Saturn and Pontiac have a similar demographic. These customers are now left with nowhere to migrate. Chevrolet does not offer anything that a Pontiac or Saturn customer would consider. Buick is a damaged and dead brand in North America. Cadillac is out of reach for most people. What is left???? Oh yeah….. an import. FORD? Never. Chrysler? Never.

Worst of all, I feel that dumping both Saturn and Pontiac is going to open the door to cheap Chinese imports. What will GM do then?

This is bad news all around for anyone who has ever purchased a GM vehicle or ever cared about the company.

I’ve sent a letter of complaint to GM/Pontiac but the decision has been made so it is unlikely to be overturned at this point.

04/27, 12:00 PM

posted by:

Lionwithoutpride

You know what really hurts about this? When I was about twelve my step-grandfather bought me some GM stock. The man was a math whiz. He’d worked on the Manhattan Project, was a lead engineer for DuPont and had managed to turn a fairly mundane salary into what amounted to a small fortune. I remember when he told us why he had picked GM. GM was a safe stock. They were blue chip. They’d ALWAYS be there FOR this country (this was a guy who, when he ran engineering projects would ONLY use Amoco fuel for some reason I don’t remember that is probably no longer applicable . . . point is, he did his homework and made decisions based upon calculations that were extreme in the minutia considered). I know that, were he still alive, my step-grandfather would be utterly flabbergasted at GM’s demise just 13, or so, years later.

I have never been able to bring myself to sell the paltry number of shares I have. They really aren’t worth the cents on the dollar I would get back, but they sure are a monument to a generation that built this country up and they are a painful reminder of subsequent how generations have torn this nation down.

We can all blame whomever we want. Few of us will admit the role we’ve all played in creating the conditions for America’s failure. The only good news is that this is the country that will give you as many first chances as you need. Provided we all reinvest in self-accountability and start carrying our own water there is no reason why “New GM” can’t be much like the very old GM-the one that at least one generation hoped to make invincible.

04/27, 12:02 PM

posted by:

sj79

“I’m sorry to see Pontiac go, but they haven’t really been a viable brand for years. Just another clone of Chevy which is too bad. Hopefully they’ll inspire some new, high-powered models in whatever brands survive under the new GM. I’m surprised to see GMC listed as a core brand.”

dont let facts get in the way but the G8, G6 convertible, Vibe and G6 coupe had no Chevy “clones”. Basically you are talking about the low volume G5 and G3. GMC is a core brand because its GM 2nd best selling US brand and its profitable. Make sense now?

The government wanted Pontiac and/or GMC to go and thats whats happening. The Task Force has decided to micromanage GM’s restructuring and decide specifically which models and brands have to go. Obviously they felt Pontiac didnt line up with their vision for GM. GM should have stuck with its original plan and shrunk Pontiac to 3 models. Its a shame the TAsk Force didnt agree and has focused on shrinking gM to a company smaller than Toyota, VW and others. By the time the government is done chopping down GM they will be lucky to be in the top 5 in global sales.

04/27, 12:05 PM

posted by:

murphy1

amen pontiac nick. when my cts lease is up ill never buy another new gm. cmon toyota, buy pontiac to be your nascar flagship. how sweet that would be…..

04/27, 12:19 PM

posted by:

sj79

Buying a Toyota due to the death of Pontiac is stupid. Toyotas have no style or performace credentials so I dont see how they would be higher on your list than any Chevy, Caddy or Buick model.

Oh yeah, there is no chevy clone for the Soltice. So much for Pontiacs lineup being nothing more than Chevys with new grilles.

04/27, 12:42 PM

posted by:

FSVT_ROCK

This is a sad day for GM and in the long run too. Pontiac GTO and Firebird has been one of my fav. American muscle car (also Ford Mustang), to me if Ford Mustang can live 45 years and still continues then Pontiac should give a second change to live. Chinese has alot more control on Buick and there is a rumor that one of the chinese company are thinking to buy Buick at this point, and yes, why do GM need two luxury brand, but no performance brand. If you guys really looking at the GM:

Chevy/Saturn = Ford = Dodge – Cheap and low end, but fun to drive
Cadillac/Buick/SAAB = Lincoln = Chrysler – Luxury brand
Pontiac = Mercury – Performance brand with low price
Hummer = Jeep – Off road brand
SS = SVT = SRT – High Performance Brand

These are the brand that I think GM should keep:

Chevy = regular brand
Cadillac = Luxury brand
GMC = Truck/SUV brand
Pontiac = Performance brand

Everything you think about it like the same way. What should GM does is clean out the Hummer, Saturn and Buick. Moving all the truck and SUV under GMC, keep G8, G6, GTO and Firebird (wish) back in to Pontiac as performance. What’s under GM should be Chevy, Cadillac, GMC and Pontiac, with miss management in GM this is going to be a very difficult. There is no need to kill Pontiac brand, look at Mercury, it is on the bord to be kill too but it still hold on for their life too.

04/27, 12:48 PM

posted by:

HoosierHero

@sj79 –

Torrent – Equinox
G5 – Cobalt
G3 – Aveo

My bad. Only 3 out of 7 models are clones of Chevy. Oh wait, the Vibe is a clone of the Toyota Matrix, which “has no style or performance credentials.” Pretty sad when your “performance” division relies on Toyota. Make sense why they are being shut down now?

04/27, 1:08 PM

posted by:

tripleonefive

haaha Look at Sj make excuses and cry. He and that Caddy V jare consoling one another now lol Toyota may have lost some money but they are still doing waaaaaaaaaaaaaaaaaaaaaaaay better than GM Now Saturn is closing its doors early Oh man this is hilarious !
Pontiac you were worthless just like all D3 companies and you deserved to be axed. The GTO and G8 were your best efforts and mediocre at best. Gm refused to have you as all rear drive models and to be honest it wouldnt have mattered anyway bc you are inferior in every way to competition from Honda Toyota and even Hyundai
HAHAHAAHAHa This is a great day in American history
Now where is Commodore and Inj???I know where Inj is, on the soup line !

04/27, 1:18 PM

posted by:

Lionwithoutpride

Yeah inj is just behind Toyota in that soup line. Didn’t 1115 get the memo about Toyota begging the Japanese government and the European Union for $$$??? That’s not to say Toyota doesn’t deserve help. They’ve earned it. It does, however, indicate how far 1115’s head has gone up the brown river.

04/27, 1:26 PM

posted by:

Road_AMS

I had a discussion with a retired Ford exec engineer on this topic. His take was that there isn’t a whole lot of money to shed when you dissolve a “brand” that basically resurfaces other designs. Sure, you might save a billion over an extended period of time, but there’s better ways to save money. I like some of Pontiac’s designs, so I’m a little sad to see them go. I think this will bite them in the arse, maybe more so than holding on to the brand ever could.

04/27, 3:08 PM

posted by:

JakeK66

So they are telling us they were losing money selling lots of people and companies for the past 2-4 years inferior G5 and G6’s??? Those car’s couldn’t cost much to produce, and if they really were losing money selling them anywhere near a price of a Camry/Accord they should be out of business due to stupidity.

04/27, 4:17 PM

posted by:

sj79

“My bad. Only 3 out of 7 models are clones of Chevy. Oh wait, the Vibe is a clone of the Toyota Matrix, which “has no style or performance credentials.” Pretty sad when your “performance” division relies on Toyota. Make sense why they are being shut down now?”

Newsflash: The Torrent is out of production already. The Matrix isnt a Chevy. The original post said Pontiacs were nothing more than rebadged Chevys with is BS. Two models were rebadged chevys and one just went on sale. The volume cars for Pontiac are G6, G8 and Vibe. None of them are rebadged Chevy products. Period.

“Toyota may have lost some money but they are still doing waaaaaaaaaaaaaaaaaaaaaaaay better than GM Now Saturn is closing its doors early Oh man this is hilarious !”

Triple stupid:

I just read an article saying that the Japanese brands are hoping the Big 3 (or two) are able to successful reduce their costs during restructuring because doing so will make them more competitive. Once sales pick up in 2010 GM and Ford are going to be FAR leaner and the Japanese will have no competitive cost advantage. They know that would be bad news. Toyota needs to do much of what GM is doing but they refuse to because they dont want to lay off permanent workers and they have too much pride to acknowledge their missteps. Based on GM’s global sales results it looks like they could be back ahead of Toyota in Q1 sales. Who would’ve thought Toyota could go from #1 to #3 in sales so quickly?

04/27, 5:05 PM

posted by:

tripleonefive

WHo cares Such a Jerk Pontiac and Saturn are GONE and no matter how much you whine and bitch it wont change that Hahahaha
Ill get you some tissue
WAAAAAAAAAAAAAH
Great day in American history Less and less POS from GM will poison the roads

04/27, 5:55 PM

posted by:

yarddog82abn

Hay Need More Oil…. Any Commits?

04/27, 6:27 PM

posted by:

Ring-Taxi

Happy trails, American BMW wannabe.

04/27, 7:02 PM

posted by:

orangecones

I am glad to see this company go. Sure they had some decent high end models (G8), but the bulk of their stuff (Torrent, G3, G5) are just Chevys, or are horrible for the money (Sky/Solstice). If you are gonna go import to get your “performance-oriented” family sedan and BMW is not quite within your reach, I would seriously recommend Subaru (WRX specifically) or Nissan (SE-R, Spec-V trims if available) since they are the brands that can deliver a $20-30k car that will drive “sporty”.

Buick will not die because its a cash cow (outside US).
GMC will not die b/c their overhead is LOW and profit margins are HIGH.
Chevy… without a doubt a core brand, perhaps THE BRAND (Chevy is GM).
Caddy… prices need to drop on average $10k per car to be more competitive.

04/27, 7:18 PM

posted by:

zoomzoomer

GM’s biggest problem has been that their first-generation models of almost every vehicle they’ve introduced are fatally flawed in detail.. and by the time running changes are implemented to make their vehicle even remotely competitive, it’s either cancelled or a second generation is already needed!

Some examples?
Pontiac Fiero (styling, engine, everything improved right before being axed)
Cadillac Catera (continuous refinements led to a decent CTS)
GMC Envoy XUV (all that engineering for 1 model year?)
Cadillac XLR (upward-pivoting roof lid dumps water in trunk)
Pontiac Solstice/Saturn Sky (ridiculously complicated folding top)
Pontiac Solstice coupe (removable roof panel doesn’t stow inside)
Pontiac Aztek (nothing could fix that POS)

04/27, 9:32 PM

posted by:

jumpoffit

sux about pontiac, why not just keep it and just move Buick to just the China market since they sell better over there, if not well then it should be time to rebadge the G8 as the new Buick Grand National- do i hear a second on that?

04/27, 11:17 PM

posted by:

1c3d0g

Sucks to lose the Solstice…one of the truly unique, AFFORDABLE sports cars left in this world. I hope a similar version pops up in Chevy’s line, down the road.

04/27, 11:48 PM

posted by:

MurcieMe

I’m a *bit* of a car nut. You might also be able to deduce that my favourite brand is Lamborghini, and has been since I was 8. But if there’s a second marque that was pivotal to me growing up it was Pontiac. Lamborghini was the dream, Pontiac was attainable. They were cool. I know now that Pontiac’s of the 80’s & 90’s were hardly performance and quality icons, but they always caught my eye. The Fiero, the Trans Am, the Grand Prix and even the Grand Am and 6000 all seem pretty sweet if you’re ten years old and the most expensive car on your block is a Mercury Grand Marquis!
The Fiero was a sprightly little 2 seater mid-engine sports car which was smaller than anything else on the road, and was the most exotic looking thing to ever come out of Detroit this side of the Corvette! It was an economy car at heart made with bits and pieces of other GM cars, but it was truly unique. I loved the Fiero then and I still love them now. Unlike most things from the 80’s a well maintained Fiero GT still looks pretty damn good. After the Countach, it was the Fiero I used to lust after. At least I actually got to see Fiero’s around town!
I don’t have to say much of anything about the Trans-Am. Or perhaps the less I say the better. Sure it’s a redneck hunk of junk that appeals to mulletted Lynrd Skynrd fans, but it was always more attractive to me than the Camaro, and FAR better than any f*cking 70’s / 80’s / 90’s Mustang. And what about Knight Rider? :)

However, one of the coolest cars I’d ever actually been in when I was really young was my Aunt’s friend’s Pontiac 6000. It wasn’t much to look at on the outside, but it had automatic everything and the coolest digital dashboard I ever saw. We never had a car growing up, so power doors, windows and seats really impressed me. I didn’t think a sedan could get much cooler than the 6000. Continuing their ‘coolest sedan’ theme for me was the 1992 Grand Am, which looked like nothing else on the road at the time. It was aggressive and sporty and had an attitude few other inexpensive cars could match.
Pontiac’s were always a snarly twist on average transportation, and even if they rarely had the “excitement” to back up their sporting pretensions, I always appreciated the attitude. It’s the same quality I admire about Lamborghini, but in a hollow, watered-down sort of way.

I’m truly saddened by this news. It’s a dark day. Perhaps sadder still, and telling, is the fact that if you asked me to give you a list of ten cars I’d buy a Pontiac wouldn’t be among them (ok, perhaps the G8 GT!) If you were to ask me the same question when I was a kid though, I’d give you a much different answer. :(

04/28, 8:37 AM

posted by:

HoosierHero

@sj79 – The Torrent is still being sold right now, but that aside, all of Pontiac is now out of production now! It doesn’t matter. But to say the G8 was a volume car for Pontiac isn’t saying much. I think they sold like 12,000 in 2008. Even though they might not be “all” rebadged Chevy’s, they lacked a lot of what Pontiac was known for which was performance – Solstice and G8 aside.

 
 
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