When GM unveiled its plan for the future late yesterday, it was clear that Pontiac’s days are numbered. To face the future, GM chooses to scrap Pontiac, reduce the number of factories from 47 to 34, lay off 21,000 employees, and offer its creditors shares instead of money.
GM has apparently taken the criticism it received from the US government to heart. President Obama and his administration have felt that the restructuring plan previously presented by GM was not ambitious enough.
When GM presented its revised plan for the future yesterday, it is clear that it is not a coward this time. There are extensive measures to be taken, and the most conspicuous is that Pontiac will be shut down.
GM thus departs from its previous plans which meant that Pontiac would be kept as a small and extremely niche brand. The phasing out of Pontiac is to begin shortly and is expected to be completed by the end of next year. GM also reiterates its ambitions to sell or shut down Hummer, Saturn, and Saab.GM CEO Fritz Henderson hopes the Saab issue will be resolved by the end of 2009.
GM also announces that the number of factories will be reduced from today’s 47 to 34 by the end of 2010.
The number of hourly employees in the US will be reduced by approximately 21,000 from 61,000 to 40,000. The costs for hourly employees are thus estimated to be reduced by as much as 34 percent. But it doesn’t end there. The number of dealers in the United States is to be cut in half, from the 2008 level when there were 6,246 GM dealers, to only 3,605 in 2010.
Even though GM is trimming its operations which reduces the cost of running the business, one big problem remains – debt. GM has large debts to various lenders, not least the US government. GM is now making an offer to the lenders to receive shares instead of money.
GM is offering 225 GM shares for every $1,000 in loans the creditors have. If the deal goes through, the lenders will own about ten percent of the automaker. If not enough lenders, at least 90 percent, take up the offer by June 1 at the latest, GM threatens to file for bankruptcy, reports the Reuters news agency.
When the plan was presented, CEO Frits Henderson commented with the words “We only want to do this once”. The measures are harsh, but according to Henderson, they are needed to ensure GM’s long-term survival. According to Henderson, the decision to let Pontiac go through with the requirements must have been extremely personal and difficult to understand.
GM to scrap Pontiac and GMC
With the risk of bankruptcy and increased savings requirements, the American car giant is preparing to close down even more of its car brands.
That’s what Bloomberg writes.
It is already known that GM wants to sell off or shut down Hummer, Saab, and Saturn, but now more can happen.
GM’s Pontiac and GMC car brands are said to be the closest at hand, according to insider sources cited by the news agency.
Thus, there would definitely be an end to cars from the brand that hatched models such as the classic muscle car Pontiac Firebird Trans Am, which Burt Reynolds drove in the “Now we blow the cop” films from the late 70s and early 80s.
Bloomberg writes that GM is now facing bankruptcy on June 1, backed by the US government.
But nothing is certain yet. An investigation is underway in talks with a government committee about whether GM can be saved without bankruptcy.
It is as part of that investigation that the future of Pontiac and GMC was discussed.
In February, GM presented a plan to be able to keep loans of roughly SEK 100 billion from the US government.
In that plan, the strategy was for GM to keep Chevrolet, Cadillac, Buick, GMC, and Pontiac, but sell off or shut down Hummer, Saab, and Saturn.
There, Pontiac would be kept as a niche brand.
But now it looks like GM needs to go further.
US President Barack Obama has recently ordered GM to review its survival plan to save additional money on employees, lenders, and its own operations.
On March 29, Obama fired GM CEO Rick Wagoner, saying the US government is supporting a “fast-track” bankruptcy for GM to reduce debt and other costs.
Fritz Henderson has been appointed as the new CEO and prefers that bankruptcy be avoided, but admits that Obama’s actions make bankruptcy more likely.
A bankruptcy is expected to lead to a new GM that retains only the best brands and other assets, sources told Bloomberg.
To avoid bankruptcy, Henderson must get the employees and lenders to save more money than the February plan’s proposal that unsecured claims of SEK 375 billion should be reduced by almost 60 percent to just over SEK 150 billion.
One of Bloomberg’s sources states that GMC has a better chance of survival than Pontiac.
GMC only sells light vans and flatbed trucks, so-called “light trucks” as they are called in the USA.
GM does not want to officially confirm anything.
“We continue to investigate our operations worldwide, including our car brands, and will take further steps to more aggressively restructure our operations,” said GM spokeswoman Renee Rashid-Mere, according to Bloomberg.
Chances are Pontiac and GMC can survive even if GM no longer wants them around:
“Among the decisions still to be made is what will happen to Pontiac or GMC if GM chooses not to keep them,” Bloomberg quoted the insiders as saying.
Saab, for its part, requested financial restructuring on February 20, after GM said GM would abandon Saab by the end of 2009.
The story of the creation of the Pontiac Vibe
The car is released by a joint venture between General Motors and Toyota on the Toyota Sprinter platform. The company simultaneously produced the Pontiac Vibe and the Toyota Matrix. Pontiac went exclusively to the US market and Toyota was assembled for Japan. The cars were twin brothers and their difference was in the steering position – in the Toyota Matrix it is on the right.
The release of this car pursued the main goal – the creation of a car that absorbed the characteristics of a practical minivan and an SUV, but at the same time remaining in the price range of an ordinary sedan.
The hatchback had a decent body height and was positioned as a trendy quasi-SUV or station wagon. The impression was reinforced by the roof rails. The car’s exterior was designed by John Mack in a sporty, dynamic style, aimed at a younger generation of buyers who, in addition to speed, also value functionality with functionality. Plus, a four-wheel drive car.
First-generation Pontiac Vibe (2003-2008)
The first generation of Pontiac Vibe was offered in three versions: front-wheel drive, all-wheel drive, and GT “Sport” modification (with a higher power engine of 180 hp and 6-speed manual transmission).
In connection with stricter environmental requirements in America, new engines were developed, the initial power of which had to be slightly reduced to meet the environmental requirements.
The model was produced on the back of a 4-door hatchback and had the following dimensions, mm: length/width/height – 4351/1775/1549.
The trunk is not very spacious, but if the rear seat is folded down, you get a flat floor (including a large refrigerator). To transport long items, you can simply open the rear window and load the item.
The positive features of the model include not only its dynamic and sporty design, perfectly executed in the best American traditions but also the interior of the cabin made of high-quality materials. The salon is full of spaciousness and is easy to transform, with modern functionality.
Large informative exterior mirrors, and high seating position, compared to the sedan (the seat is adjustable in height). A very useful feature – outlet 115V, 60 Hz, power up to 150W.
Disadvantages include poor visibility, due to too thick racks, small stock fuel tanks (50L), and insufficient sound insulation.
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Second-generation Pontiac Vibe (2009-2010)
The debut of the second generation of the model took place in 2007 at the Los Angeles Auto Show … 2009 Pontiac Vibe has incorporated all the best features of previous models, raising the bar to a higher level – becoming more powerful, more stylish, and more comfortable.