GM To Eliminate Pontiac, Give Government 50% Stake
GM released a new plan to avoid bankruptcy today, and the cuts are deep. The U.S. Treasury would own at least 50% of the company and the failing Pontiac brand would be completely eliminated.
GM will also eliminate 21,000 jobs.
From the Washington Post:
By June 1, the Detroit-based automaker, which has already received $15.4 billion in federal loans, must gain significant concessions from stakeholders to continue to receive aid.
Under the outlines announced yesterday, the federal government would take an equity stake of at least 50 percent, the United Auto Workers would take as much as 39 percent, the company's bondholders would get 10 percent and the existing shareholders 1 percent
In addition, the company said that they do not expect to make Hummers, Saabs or Saturns after this year.
GM to Cut 21,000 Jobs, Eliminate Pontiac [WaPo]
(Photo:computermachina)
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Comments:
Well, that solidifies the fact that I will never buy a GM vehicle.
I've had friends who really enjoyed their Pontiacs, and I think the classic GTO is one of the most beautiful cars I've ever seen. But if they're looking to trim, why Pontiac? Why not Buick?
Does this mean I would be able to get a Saab? I've alway wanted a Saab, but figured out that it wasn't worth the cost of ownership with repairs and such.
@valueofaloonie: Well, I don't think they're going to immediately melt down the parts that already exist.
@valueofaloonie: Besides trim and steering, you are more or less ok with the major platform-mate, the Chevy Malibu.
@pecan 3.14159265:
Buick sells in China. Tell me one Pontiac that is not a Chevy/ Buick or other GM car. The sad fact is that GM was just putting a Pontiac badge on their other models to fill out a line up. That cannibalized both marketing money and sales.
Well, you know what Pontiac stands for:
Possibility
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Terminations
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Crappy
@valueofaloonie: You will be fine. GM has something of a 95+% shared platform with the Malibu so you are covered there. The best part of the free market is someone will cover the other 5% that is not shared.
Am I the only one who think it's funny that GM is keeping failed brands like GMC over a brand that is actually their top seller, Saturn? Not that I would ever buy GM, anyways, but still...
Not only that, but Jalopnik reported that GM does not plan on moving the Vibe and Solstice over to another brand. Is this the end of the odd Toyota/GM partnership? [jalopnik.com]
Damnit! No more Saturn? My wife and I were looking to getting a Vue when we had the money (not for atleast a year). Damnit!!!!!!!!!!
Man, it used to be that you needed a job at a Hedge Fund to work with distressed equity. Now the hot jobs are all in Washington!
@valueofaloonie: There's also good money in replacement parts and GM has committed to at least 10 years of support for every model. Probably more. Once they have the tooling set up for it, there's no reason not to make something to sell you.
@Jenkinsbball: You could always buy a used one, I guess. I don't know what kind of market this might create where you've got the last production of a car that isn't a collectible.
@Miraluka: I think GMC sells because it provides the heavy-towing trucks that a lot of construction companies require, and also government vehicles. It's not exactly geared toward the average consumer.
All I can say is I love my Pontiacs. Although GM discontinued the models I like in the early 2000's. Without the Bonneville, Grand Am, Grand Prix and Firebird, the brand was a wash anyway. I can't relate to the newer stuff style wise; way too bland for me. I don't want my car to look like every other car in the parking lot; I'm infamous for forgetting where I parked. I can spot my '92 Bonneville pretty quickly nowadays.
GM is up 25% in trading today. Can anybody explain why that makes any sense in light of the proposed dilution?
@Miraluka: GMC has actually operated in the black before, unlike Saturn, which never has. You can sell a million vehicles for -10 dollars, but the guy that sold his bike for a buck made more money than you.
@pecan 3.14159265: I'd go with used too, you're not buying instant depreciation and the car is a lot easier on your wallet too.
@valueofaloonie: If GM, or even just it's parts suppliers, continues to exist, you will continue to have parts for your car. Parts supply is still very good for all of my vehicles, many of which have been out of production for decades. In addition, you can currently purchase parts for any GM vehicle at any GM dealership, so you don't need to worry about no longer having a Pontiac dealership to buy parts at.
Why on earth would you continue to keep GMC over Saturn? There's nothing in the GMC lineup that can't be easily re-branded and sold as a Chevy.
It's pretty atrocious how GM killed Saturn. I guess they never took it very seriously. Too bad - it was really the best thing they had going for a long time.
@Jenkinsbball: @Megan Squier: Though Jenkinsbball could easily score a really, really good deal on a brand new one, which would make it more appealing than buying a used one.
Cutting 21,000 jobs. What an excellent way to assist the economy.
@Miraluka: First, to establish that I am not biased against Saturn, I have an '03 LW200 (that's a Saturn).
Can you please show me why you believe that Saturn is a top-seller? Everything I've seen shows that Saturn sales are not doing very well.
According to that, Saturn sold 188,000 vehicles in 2008, vs. Chevy's 1,800,000, Pontiac's 267,000 or GMC's 377,000
@Rectilinear Propagation: Why did I get the mental image that GM was melting down Pontiac parts for some SkyNet plot?
Why are they still keeping GMC, since all they sell are Chevy trucks with different badges on them?
And nationalization doesn't really work - ask anyone who has any experience with a 1970s British Leyland product.
@pecan 3.14159265: I've heard that Buick owners tend to be older and more financially stable than Pontiac owners. That being the case, they figure Buick owners are more likely to get financing, or not require financing in the first place.
@TEW: right-o. except, they were trying to fill out a line up that was already full.
if pontiac had vehicles that were different than their platform-mates, maybe they wouldn't be here.
if i were the head honcho, i would've gone a different way with the pontiac brand - your chevy whatever, but with high-end performance parts (mcpherson, brembro, flowmaster, bulletproof, eibach, edelbrock, ingen, k&n - the works), mean bodies (think vanquish), racing stripes - the whole 9.
a performance brand for people all about performance - that's what pontiac should have been.
or option 2: resurrect the brand every once in awhile for a really special limited run car (a la gto). a car that deserves to be branded a legend.
but yeah, this crap they've been dishing the last 10-15 years has been less-than-inspiring.
@Gene Gemperline: There's nothing in the GMC lineup that isn't already a re-branded Chevy. I'm thinking it has to do with the belief that pick-up truck owners are some of the most brand loyal vehicle owners out there. If they killed GMC, there is no guarantee that pick-up buyers would move over to Chevy.
GM has been killing Pontiac for years. Whose bright idea was it to kill off known models and replace them with the current G# system?
I liked Pontiac for simply being a nicer, much, much better looking car than anything on the Chevy lots. I guess my G6 will be the last "American" car I buy.
Can someone please explain why going bankrupt is worse than cutting a line and giving up 50% of your company. It seems that when most (all?) of the major airlines declared banruptcy they were able to renegotiate their union contracts and some have even returned to profitability.
Bankruptcy ≠ death of the company.
I hope that Saab is allowed to buy back their badge at current prevailing value. They've a long history and more competition benefits consumers.
Shame they couldn't get the original stakeholders of Saturn and reboot: I think they had the right approach and a unique one among US car companies.
@HarcourtArmstrong: I think there's a little bull in that because they've created the market. Older people "will only buy" X car doesn't fly, because people will buy a car based on the choices they have. No Buick? They'll buy something else, or not drive a car. If Buick in the United States is not a solvent brand to have, get rid of it. Don't keep it around just because you think the 60+ demographic wants it around. I doubt any older people who want to buy a Buick will choose to not drive at all if they can't buy a Buick.
@ret3: Shhh...don't let the word out...I'm hoping I can grab one on the cheap during some kind of dealership liquidation.
I love my G6! I would assume (hope?) that GM will either still make parts, or that the parts are interchangeable with other models... Hmm. Maybe it's time for a trade in?