As we reported last week, General Motors has indeed made the decision to kill the Pontiac brand. The news comes as a part of a new viability plan (yes… another one) submitted to the federal government today.
The new plan will see Pontiac eliminated by the end of 2010, but that's not all… not by a long shot. Also included in the new proposal is a long list of drastic and sweeping changes that General Motors says are much needed in order to stay in business. Among the list of big changes is the fast-track dissolution of Saturn. Originally scheduled to be dismantled by the end of 2010, the plan now states that the niche brand will be eliminated by the end of this year.
Also on the chopping block are half of all current U.S. General Motors dealerships. Not surprisingly, GM's previous viability plan wasn't pessimistic enough, calling for 34 percent of the current 6,246 dealerships to close. That number is now a solid 50 percent.
Other major cuts include the closing of three plants and the loss of 7,000 more hourly workers. This would put the number of hourly workers at 40,000 - 7,000 less than the last viability plan said there would be and 21,000 less than there were in 2008.
In total GM will cut 14 models from its lineup, with just 34 different vehicles being offered in 2010.
Most importantly, however, is that General Motors will offer current debt holders stock in order to reduce the company's debt. But if too few debt holders cash in, then GM will go bankrupt. And that is looking quite likely as GM says it needs approximately 90 percent of its unsecured debt covered or else it believe the U.S. Treasury will not see the company as viable.
General Motors still faces the likelihood of filing for Chapter 11 but in the mean time it will run with its new viability plan and concentrate on its core brands: Chevy, Buick, Cadillac and GMC. With just over a month to go before the Obama Administration's June 1st deadline, however, nothing is really certain. Maybe there will be another viability plan? Maybe more will be cut…
More: R.I.P. Pontiac: General Motors Kills Iconic Brand