Leaner GM dumps Pontiac
April 27, 2009 by David Twomey
General Motors has decided to abandon one of its most revered nameplates, that of Pontiac, as part of its desperate measures to save itself from Chapter 11 bankruptcy in the United States.
At a press conference in Detroit a short while ago the Chief Executive Officer of General Motors, Fritz Henderson, outlined “an updated Viability Plan that will speed the reinvention of GM’s US operations into a leaner, more customer-focused, and more cost-competitive automaker.”
Mr Henderson said the Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.
Significant changes include:
* A focus on four core brands in the US – Chevrolet, Cadillac, Buick and GMC – with fewer nameplates and a more competitive level of marketing support per brand.
* A more aggressive restructuring of GM’s US dealer organization to better focus dealer resources for improved sales and customer service.
* Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.
* Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a US total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.
“We are taking tough but necessary actions that are critical to GM’s long-term viability,” said Mr Henderson, GM president and CEO.
“Our responsibility is clear – to secure GM’s future – and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team.”
Mr Henderson said that as part of the revised Viability Plan and the need to move faster and further, GM in the US will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC.
He said, “The Pontiac brand will be phased out by the end of 2010.”
GM will offer a total of 34 nameplates in 2010, a reduction of 29 per cent from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries.
He said this four-brand strategy would enable GM to better focus its new product development programs and provide more competitive levels of market support.
Mr Henderson added that the revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest.
Updates on these brands would be provided as these initiatives progressed.
There was no mention of the future of Opel in Germany or Holden in Australia.
He said; ”Very importantly, development and testing of the Chevrolet Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.
“The Viability Plan reflects the direction of President Obama and the US Treasury that GM should go further and faster on our restructuring,” Mr Henderson said.
“We appreciate their support and direction. This stronger, leaner business model will enable GM to keep doing what it does best – provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country’s economy and environment.”
Print it: 
A problem with your assumptions though Wheelnut.
Almost certainly a term of the sale of Opel would be that Opel retains the IP in relation to the cars that it makes. If this wasn’t the situation, they will not be able to find a buyer, it’s as simple as that.
BM, I think the article that you quoted is poorly worded too. It really should read “Holden stands to lose 1 billion dollars in revenue”. Say holden gets 35000 AUD for producing each car, multiply this by 30000 cars a year and there is your billion dollars in lost revenue.
The impact on profits on the other hand won’t be anywhere near a billion.
That may be However; [at this stage] Opel aren’t “for sale” they have said they want to break-away from GM as they believe they can go it alone – which would be impossible if GM take away their funding tooling cars etc
GM helped Opel fund the design research development and tooling etc of their cars – they decide which company builds what type of car and where they are built.
Therefore; GM can decide to make Holden or Daewoo etc build cars that look similar if not exactly the same to the current range of Opels or even some of the future models.. and there is absolutely nothing that the prospective buyer of Opel would be able to do about it.
http://www.autoblog.com/2009/0.....ain-stake/
“After a day of worker protests across Europe at various General Motors plants, news comes today from Carl-Peter Foster (above), head of GM Europe, that Opel is planning to reorganize itself as a joint-stock company. GM would basically give up between 25-50 percent of its stake in the spun off company, with the hope that outside investors would make up the rest. The reorg would also likely include concessions by workers for lower pay as well as a restructuring plan to lower operating costs. The main obstacle to separating Opel from GM in the past has been the degree to which the two are intertwined, but a joint-stock company in which GM remains the largest shareholder allows the two to operate as closely as ever while severing some of those ties that bind. It may also set the stage for a detangling of Opel’s models from GM’s product portfolio over time, which would facilitate the outright separation of the brand from its parent company in the future.”
OK people, this is properly funny. I was watching television earlier when one of those sickening Holden ads came on advertising the new Commodore “International” edition. Ha! Not so International any more!
Ah so the funny blogs continue to role in. Alex you are a true genius. Holden still exports a significant number of cars to the middle east, South Africa, Brazil, Malaysia, Thailand just to name a few.
The production of G8’s wound down in Jan this year as the car never sold in the numbers it was hoped for. Holden production schedules for G8’s shows no production call up until October 09 so the loss of the G8 make hardly any difference to Holden anyway.
And finally to all of you writing about the imminant death of Holden, the first production tools for the 4 cylinder car have been released for tooling so I seriously doubt that a company that is strapped for cash (like GM)is going to relase a serious wedge of cash if they were going to close the plant.
There is no imminant death of Holden…. the spirit went missing some time ago…. and then again when they released the Epica.
Holden tried to sell the Viva and Barina and are still selling the Epica. The Viva has been dropped, the current updated Barina is a bit better than the superceded one and the Epica is just transport. But what could they do? The Astra and Opel Corsa are too expensive to import. Ford is doing ok with the Focus as it is made in South Africa and is cheaper to import. The Fiesta is made in Thailand (I think). But what does Holden do for a small car. The Cruze looks and sounds like it will be a good drive. I sat in one at the MIMS in February and it seems well put together, but time will tell.
Evora,
OK,
Ill slow it down a beat.
What Im getting at is they are only displaying a turnover figure and not the profit figure.
The turnover figure is useless in deciding how much this decision will affect holden.
What I do know is holden arent making too much profit (the figure that counts) on their exports.
As you rightly pointed out the article you referenced makes no mention of the profit figure and therefore is really useless and makes its claim based on nothing
RoFlmaTiC,
The article isnt that clear cut, I agree, but i highly doubt holden get 35K for each car. Isnt that what they are selling them for in the states???
Also the currency isnt quoted.
Im guessing those quoting 1 bill are quoting a round US dollar and those quoting 750mill are using a rounded aussie dollar.
^^^
sorry i quoted my exchange rates the wrong way around ha ha ha ha ha
Nah the g8 is around about 30k USD which is about 43k in Australian dollars; I think 35k would be a reasonable estimate of building costs.
WTF!!!!!!!! Why can’t General Motors ditch GMC as well!??!!?!?!?!?!?!!?!?!?! HOW IS IT A CORE BRAND?!?!?!?!?!
For an example………….the GMC Sierra is a bloody rebadged Chevrolet Silverado!!!!!!!!!!!! And there both sold in the same country.
Pretty silly in my opinion. Anybody agree?
Duck I agree 100%
For years G.M has been “vehicle-cloning” and for years the buying public have had to been put up with G.M’s second class vehicles.
G.M going bankrupt and selling off all those “unneeded-clone-brands”.
This is just “catch-up” which is probably long over due.!
Thankyou Schah7! =D