GM to Phase-out Pontiac Brand

April 27, 2009 12:00:00 AM PDT
The auto maker announced massive job cuts Monday along with the official announcement that it's ending one of its core brands. If all goes to plan, General Motors will soon become a much smaller company with far fewer brands.

Part of that plan includes phasing out the Pontiac brand by 2010. Saab, Saturn, and Hummer will be sold, or disappear by the end of this year. The automaker will instead focus on the 4 remaining brands: Chevrolet, Cadillac, Buick, and GMC.

Shedding the other brands will require additional plant closures and cutting 21,000 factory jobs. GM's plan comes ahead of the June first deadline set by the federal government.

The idea: entice investors to buy shares of common stock as part of a debt-for-equity swap. The company is also asking the government to take 50 percent of its common stock. "Bond exchange needs to be successful in order for us to avoid bankruptcy," said GM CEO Fritz Henderson.

So far, GM has received more than $15-billion dollars from the Obama administration. Any further assistance depends on the company's perceived viability based on this plan.

When it came to considering the alternative, GM's CEO was blunt: "If we can't do it without bankruptcy, we'll do it through bankruptcy."

Chrysler is also working to secure more federal funding following concessions from the U.A.W. to cut costs.

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