GM lowers the boom on Pontiac
GM will kill off the evocative Pontiac brand as it bids to cut costs.
As part of a measure of cost savings in a new viability plan announced today, which will also involve closing half of its 6,200 U.S. dealerships, GM confirmed it will phase the Pontiac brand out by the end of 2010. GM will decide the futures of Hummer, Saab and Saturn by the end of 2009. GM no longer will build vehicles for Saturn after the 2009 model year, as it will focus on Chevrolet, Cadillac, Buick and GMC.
GM must convince the federal government of the business sense of its viability plan if it is to continue receiving cash bailouts, rather than be put into bankruptcy protection.
Pontiac has produced cars since 1926, and they have been sold in the U.S., Canada and Mexico. The name derives from Chief Pontiac, an American Indian chief who led an unsuccessful uprising against the French shortly after the French and Indian War.
As a result an American Indian Headdress was used as as a logo until 1956. It was then changed to an American Indian arrowhead, which is now known as the dart. Pontiacs were also easily identifiable for their “silver streaks” of stainless steel that extended from the grille down the center of the hood.
Its first car was the Pontiac Chief, powered by a 39hp 3.1-liter engine. Classic Pontiac models include the GTO, Firebird, Trans-Am, and Bonneville. The brand is also linked to some of film and television's most famous cars. Knight Rider's KITT was a Pontiac Trans-Am, while the Firebird Trans-Am starred in Smokey and the Bandit.
In recent years Pontiac has introduced cars including the Holden Commodore-based G8, which replaced the GTO, Bonneville and Grand Prix models.
Other proposed cost-savings include cutting the number of models GM sells from 48 in 2008 to 34 by 2010, cutting the number of dealers from 6246 in 2008 to 3605 by the end of 2010 and cutting the number of assembly, powertrain and stamping plants in the U.S. from 47 in 2008 to 34 by the end of 2010, and 31 by 2012.
An unspecified number of jobs will also be cut, while savings agreed with the UAW workers' union will cut labor costs from $7.6 billion to $5 billion in 2010.
As a result, GM says its market share will fall to 18.4-18.9 percent from 2010. It says it will have to sell 10 million vehicles a year to break even – a figure that it says will be achievable when the economic climate picks up. It sold 8.35 million vehicles last year.
GM has also launched a bond exchange offer for approximately $27 billion of unsecured public debt. It also pledged to invest $5.3-6.7 billion in future product development each year until 2014, and pledged that the Chevrolet Volt would be ready to start production at the end of 2010.