Under pressure to show Congress it won’t just flush $25 billion of bailout money down the toilet, General Motors (GM) is scrambling to come up with an actual plan. One idea under consideration, Bloomberg says, is ditching Pontiac, Saab, and Saturn:
The review of the 82-year-old Pontiac division, one of GM’s earliest, shows the scope of the survival plan being given to Congress on Dec. 2 to show GM can repay federal aid. GM also seeks to cut debt levels and reduce costs for active and retired union workers, people have said…
Directors are scheduled to review a proposal Nov. 30 and Dec. 1, people familiar with the plans said. The automaker will prepare a 10- to 12-page public document and a private, more detailed plan of about 80 pages with background material, the people said…
GM’s eight U.S. brands are the most among the domestic automakers, compared with four at Ford Motor Co. and three at Chrysler LLC. The Hummer sport-utility vehicle unit was put on the block in June. GM agreed to eliminate the 103-year-old Oldsmobile brand in 2000 because of declining sales.
GM, which turned 100 this year, established the Pontiac division in 1926. The brand’s sales peaked at 896,980 in 1978, according to trade publication Automotive News. That was the year GM sold 9.55 million vehicles worldwide, the highest ever, and came at the end of an era when Pontiac attracted notice for sports coupes such as the Firebird. Pontiac sales are down 21 per cent in 2008, compared with a 15 per cent industrywide decline through October.
The brand’s dealerships are the most numerous of the three units under study by GM. The automaker has 1,071 outlets for Pontiac, 400 for Saturn and about 105 for Saab among its 6,400 dealers, said Susan Garontakos, a GM spokeswoman.
This move would leave GM with the most American of its brands: Chevy, GMC, Buick, and Cadillac. The plan so far has been to combine dealerships, which appears to be making a modest difference, but not enough:
GM has been trying to combine Cadillac/Hummer/Saab and Pontiac/Buick/GMC brands into big dealerships able to benefit from higher volumes and lower marketing costs. Toyota Motor Corp., which includes the Scion brand, sold an average of 1,071 cars at U.S. dealerships in 2007 compared with 274 at Saturn, 118 at Pontiac and 115 at Saab, according to Automotive News…
GM established the Saturn brand in 1985, five years before selling the first vehicle. Most of the U.S. dealers are standalone, according to GM. Sales reached a peak in 1994 at 286,003 units, according to Autodata Corp. in Woodcliff Lake, New Jersey. This year’s deliveries are down 19 per cent.
GM made its initial investment in Sweden’s Saab in 1990 and took full control in 2000. Its sales climbed to a record 47,914 in 2003. In 2008, they were down 31 per cent through October.
Business Insider Emails & Alerts
Site highlights each day to your inbox.