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: 
Dump Saturn, Saab, Hummer and Pontiac, sell Holden and Opel?
How could Holden be sold its only a name afterall. It needs to be under GM banner in order to survive. A 1 car range ain’t worth Jack especially when its a crude dino!!
Sad to say it but reality strikes again.
My guess Holden will survive, after being bought for a dollar, as an independant selling rebadged imports. Whether they be from Korea or elsewhere is another matter.
Yeah but the production facilities and intellectual property associated and even the brand name (goodwill) of holden would be worth some dosh.
Roflmatic,
Lets not pretend that holden actually has Intellectual Property that other companies would desire!!
RoFlamaTiC, why sell Holden? Saab is much more worth while. They look better and are still more modern than the latest Commodore. Not to mention all the concepts Saab have. They just need somebody to put them into production rather than sweep them under the rug like GM have.
Latest reports say that Fiat seem to be quite interested in Opel. We can only hope but I think Opel is safe. They make good cars and will be sold. Even if it is to the Chinese.
RoFlmaTiC – The production facilities are pretty much worthless to anyone other than those who have a vague interest in building cars. Even then much of the equipment will be out of date. Australaian labour rates depsite what anyone says cannot compete with Asian rates. Uk has the same problem with Eastrn European labour. Vauxhall only make the Astra van in the UK now along with a few engine plants, It’s all done on mainland Europe.
there goes 90% of holdens total production , the last person to leave the production line, please turn the light out.
Whatever happens to GM, Holden is likely to be the loser as it’s brand is of least value globally. In fact, come to think of it, with a total population saturation of just 25 million people (Australia and New Zealand) Holden is one of most invisible automotive brands in the world.
The Holdenites obviously haven’t woken up yet. I’m waiting for the deluded “Holden makes the best cars in the world” posts. They only make one, albeit in several different guises, and nobody else buys them in great numbers – perhaps except the Middle East but they like white cars with beige interiors so they have no taste anyway.
Holden will survive somehow, they have to otherwise our ecenomy would be in massively deeper crap than now. I think the Pontiac G8 (the commodore in the US) should be sold as a Chevrolet. Maybe to replace the Impala? Chevy sells a tonne more cars than Pontiac ever did and Holden doesn’t deserve to be the loser here.
Besides the loss of exporting the Commodore as a Pontiac,
Dumping PONTIAC is the best move ever.!
Pontiac is just a clone of a Chev [a pretend brand]
Why is G.M hanging onto G.M.C they too are a Chevy in clone.
For G.M to survive they need to streamline to only Three
Core Brands.
You ask why GM is keeping GMC around? It’s simple the dealers want them around. Actually GM was going to bring a Zeta based Buick to the US but the dealers didn’t want it because they were afraid that their main buyers, old people, wouldn’t want it. Obama is the main reason Pontiac is going under.
It is unlikely that Holden owns the intellectual property for the cars it has developed.
In the 80’s and 90’s lenders were burned when they discovered, usually on insolvency, that companies had pushed the intellectual property and trade marks into companies that weren’t covered by collateralised securities for loans. An example in Australia was the Pub Squash debacle. The lenders responded by requiring those assets to be concentrated into the parent entities; particularly in the case large multi-nationals like GM.
Holden, if it survives, and is sold, may have pay up to continue building its dinosaurs.
If Opel/Vauxhall is cut loose, then Holden won’t be far behind.
The best hope would be if SAIC – the GM/Chinese joint venture which builds Buicks in China – and also the Statesman a.k.a. Buick Park Avenue – buys Holden and integrates it into the Shanghai operation using it for R & D and to build a range of cars which complement the Chinese Buicks and other GM cars (Volts?)under licence from the US operating only GM. Then it may survive and continue to employ some Australians.
Jason The American
That is about the Best thing Obama has done since he’s been in office.! LOL
Holden will survive albeit in name and spirit only I think.
It’s basically a rebadging importation company at the moment and with the introduction of every new Korean Holden it loses more and more of what made it such an Australian favourite to begin with.
I look forward to the return of real touring car racing in australia.
Why do people think Holden will be doomed if it continues importing Korean cars? Those Korean cars are selling just as well as their European predecessors but with alot more margin. As a drivers car I hate them too, but you can’t argue with the business case.
Sad day for Holden and local manufacturing, regardless whether your a Red or Blue supporter. Found this on LeftLaneNews:
GM CEO Fritz Henderson announced earlier today the G8 sedan will be phased out by the end of this year.
According to Henderson, Pontiac’s relationship with Holden – GM’s Australian subsidiary and maker of the G8 – will end by the end of 2009. Henderson said production of the Pontiac G8 will wind down by the end of the year, with the automaker prepared to offer heavy incentives to get the performance sedan off dealer lots. News AU estimates the end of the Pontiac G8 will cost Holden more than $750 million in lost revenue.
Additionally, Henderson said GM has no plans to move any Pontiac models to other brands.
I’d love to buy a new G8 but that would mean i would have to get rid of my Mustang and i don’t want to do that.
Damn and I just bought a Pontiac G8 GXP.
Jason the American
Now ya Talking
Had a laugh the “anti-span word” I had to us was “HOLDEN”
What a POS that is or maybe the word HOLDEN wont be around any longer to use. LOL.!
Must say I hope Ford use the Aussie Falcon Chassis/suspension etc for the basis of the next gen. Mustang.
Actually I intend having a session tonight on Jim Beam Black to celebrate the demise of PONTIAC.!
Anyone care to join me.!LOL!
The most annoying part in all of this is the fact that the guy who forced Holden into this (Bob Lutz) has once again gotten away scot free with a flammin golden hand shake… Now I am a blue blood but that really p’s me off.
you know, in the days of old everybody slagged Kia dn Hyundai for being Korean…
*coughs*, look at Holden! Holdens line up of cars consists ATLEAST of 80% Korean/Korean Built cars with Holden Badges.
So all you Holden die-hard fans out there, initially have no right to be calling any Korean car company “pieces of crap” as ‘their loyal Australian Brand’ line-up consists mostly of these!
“Must say I hope Ford use the Aussie Falcon Chassis/suspension etc for the basis of the next gen. Mustang.”
Well if it’s lighter lighter than the current car i say go for it. Well for todays standards the Mustang isn’t very heavy and it handles better than the new Camaro and Challenger. Keep in mind the Mustang is still has a solid axel and the others have IRS.
http://www.youtube.com/watch?v=r-uTjaQ6E7g
Is the Captiva a Korean car as well?
It would be very interesting to see the general public reaction if Holden was to go bust and overnight all the dealerships were changed over to Daewoo branded and selling the exact same product line up bar one model.
:)
Just to let you guys know YOUR LAST CHANCE TO BUY A W427 ENDS IN JUST 4 HOURS!
http://www.hsv.com.au/w427/
lol!
Something people don’t seem to understand is that Holden (not GM itself) owns Daewoo. So no matter what happns, Holden can still continue selling Daewoos badged as Holdens.
Sorry Chucky but Holden runs GM-DAT, it doesn’t own them. Ownership still belongs to GM worldwide.
There appears to be this big misconception that Holden owns Daewoo!?
Is it not the case that Holden itself owns something like a 40 to 45% share in Daewoo? I read that recently on Carpoint.
Andronicus, yes the captiva is korean the commodore/ute/statesman lines are the only aussie made cars. Everything else is a rebadged import
GM Holden Ltd own 66% of GM Daewoo The rest belongs to various former creditors of the old Daewoo (Korean Development Bank ect).
So GM, which is Holden. thanks.
I just love reading the various comments on this sight. It’s the best laugh I get all day. Some of the comments are just priceless. Most of you are just wanna be journo’s sitting back drinking your hot chocolate while adjusting your cardigan collars and pulling up your white socks! Most of you have got no clue about anything to do with the car industry and never will. But you still keep writing the same rubbish every day on topics you have no idea about. The fact that you can even turn on a computer or drag yourself away from the play station long enough to write your garbage astounds me. But please don’t stop writing! I just can’t wait to read more and get another good laugh!!!!!
If GM has the power to sell Holden, it also has the power to restructure its operations so it retains ownership of the Daewoo facilities if it does indeed sell Holden. (That’s if Holden technically does own Daewoo as some suggest).
Not quite correct, GM Holden combined with Suzuki and SAIC owned 66% of Daewoo, however Suzuki and SAIC have bought and sold off parts of their share leaving GM currently with 50.9% of Daewoo’s shares. However Holden still only has 1 seat on the Daewoo board, so its voting rights is less than its share ownership would indicate.
I saw Lutz on a The Colbert Report recently imply the Volt would be more suited to woman with facial hair and younger people living alternative lifestyles than the mass market. At times during the interview it looked like he was embaressed by the car. This for me was the final proof I needed to convince myself that GM are completely clueless and out of touch with reality. Why are such idiots allowed control of such important companies?
hahaha eh179driver,yeah very grown up arent they ,about what we’ve come to expect though.
Lets see over 21,000 people expected to lose their jobs at Pontiac in the US……..hilarious isn’t it,I’m sure those on this site that may end up being one of the 1 million that are expected to become unemployed in the next year wont think it as funny when it happens to them :(
Ha Ha Spam word = Pontiac how appropriate
S&D With Lutz saying that about the volt, I’d be more inclined to think the vehicle is going to be bang on the money. Remember it was under Lutz’s grand plan that Zeta ultimately ended up to heavy for it’s own good. He called the shots and he was the one to send it in the direction it went. Now look at it. Unwanted by those that it was designed for and not a very good return on a billion dollars investment for Holden.
EH179 for President…hit the nail right on the head, best post so far among all this verbal excrement
Evora,
You report that Holden will lose $750 million in revenue when Pontiac gets the axe.
How does that reflect on the P&L???
Lets not confuse revenue/turnover with profit.
Sometimes it can be easier to focus on a better profit with a lower turnover
Chinese Brilliance for future Holden sedans 2012.
Andrew M
“According to Henderson, Pontiac’s relationship with Holden – GM’s Australian subsidiary and maker of the G8 – will end by the end of 2009. Henderson said production of the Pontiac G8 will wind down by the end of the year, with the automaker prepared to offer heavy incentives to get the performance sedan off dealer lots. News AU estimates the end of the Pontiac G8 will cost Holden more than $750 million in lost revenue.”
I have not said anything about profit or loss, nor do I believe does the article. Have a look at leftlanenews.com and work it out for yourself ;)
I doubt it would affect the profit and loss at all given the ridiculously cheap price that they were selling for in the US :S
This is what the more intelligent bunch are saying on the subject on the FORD Forums……..even those guys arent as negative on Holden as some of you on here are.
Report ” US loss to cost Holden $1bn a year
Article from: The Sunday Mail (Qld)
Carly Crawford
April 26, 2009 12:00am
EMBATTLED carmaker Holden stands to lose up to $1 billion a year when its ailing United States parent dumps major brand Pontiac.
General Motors is this week expected to announce plans to ditch or sell the brand as it desperately works to stave off bankruptcy.
That means the maker of Australia’s most popular car could be in for more pain.
Holden had been banking on exporting 30,000 VE Commodores each year to the US, where the model is sold as the high-performance Pontiac G8.
VE Commodore exports began last year in a deal worth about $1 billion a year.
Holden builds the left-hand drive VE Commodore – with help from a $6.7 million Federal Government loan – at its plant in Elizabeth, South Australia.
The company spent $77 million preparing the plant for the vehicle’s production, hailing the project as the future of the Elizabeth plant.
The deal was expected to lift Holden exports to 70,000 a year – half its total production.
Although the car was well-received by US auto critics, the world economic crisis meant the G8, which retails for $A53,000 in North America, has failed to achieve strong sales.
Only about half the 25,000 G8s delivered to the US have been sold.
Holden, which has not made a profit since 2004, had hoped VE Commodore exports would reach up to 50,000 a year.
It is Holden’s second blow this year over Pontiac’s demise.
In January, Pontiac shelved plans to import a G8 ute from Australia as its performance sports truck.
Now as one of the other guys said on the Forum the numbers dont add up
quote ” So a loss of $1bn on 70 000 vehicles.
Thats $14k a car. If they were targetting say 20% gross on each car @ $53k = $10.6k. So, according to the writer they are going to lose $24.6K in revenue per car….. I don’t think so…. off to school Carly Crawford.
To all those who seem to “think” [and I use the term bery loosely] that because GM has decided to get rid of Pontiac that somehow it also means the end of Holden..
Let me remind you that there have been recent reports that Opel is intent on breaking away from GM
Now given that GM own the intellectual property [copyrights and trademarks etc] in relation to everything Opel has done since they obtained 100% ownership of Opel [just as they do with Holden];
Don’t be surprised if GM decide to transfer production [including tooling] of Opels to other facilities.
This could mean that Holden could end up building the Insignia [instead of the Cruze] whilst Daewoo build the Astra Corsa etc which they continue to export to Europe and the USA as Opels so that GM maintains a presence in the European market.
Then there’s the likelihood of The VE Commodore being re-badged as the new Chevy Impala.. it makes sense given that it uses a Chevy engine.. not to mention that the WM Statesman Caprice is sold as a Chevrolet.
The article says that the significant changes GM intends to make include: * A focus on four core brands in the USA – Chevrolet, Cadillac, Buick and…. GMC [Why?]
That’s in the USA.. Just because they didn’t mention Holden doesn’t mean that Holden aren’t a part of GMs Future Plans – which they are..
Because In GMs initial statement [which they made last year] as to what they intend to do as part of their restructuring They said that they will be Holden onto Buick Chvrolet Cadillac Pontiac and Holden.
Now given that they have since made a statement with more recent changes: the main one being that Pontiac is no longer a part of their plans
If they intend to get rid of Holden – don’t you think that a similar statement specifically mentioning Holden
Frontman says; The most annoying part in all of this is the fact that the guy who forced Holden into this (Bob Lutz) has once again gotten away scot free with a flamin golden hand shake
Aaaahhh Bob Lutz didn’t force Holden to do anything..
He merely suggested that GM use the Holden Monaro as the new Pontiac GTO because he was impressed with what Holden could do in such a short time and with limited resources.. particularly in terms of design quality and performance.
Then when the VE project was approved Lutz said that the VE should become the New Pontiac G8
Then there was the TT-36 Torana [concept] which he wanted to be the New Pontiac G6
You see if it wasn’t for Lutzy GM would never have realised Holdens ability or their potential mainly because of Waggoners arrogance and narrow-mindedness etc
The main problem was is that Pontiac has been on “life support” since the mid 90’s – that is very few American car enthusiasts regarded it as a “performance” brand it was more of an “entry level” brand which meant that a car like the GTO or the G8 didn’t really go with other cars in the Pontiac line up.
The [Monaro and the] Commodore should have been badged as a Chevrolet .. which is what I suspect will happen anyway.