to Phase Out Pontiac, Will Close 13 Plants by End of 2010
April 27, 2009
General Motors Corp. (GM) has released its revised "viability plan,"
which includes the phasing out of its Pontiac brand and the closing of
13 plants by the end of 2010. In addition, the company plans to close
or idle three additional plants by the end of 2012.
The specific plant closings will be announced in early May.
The company says the Pontiac brand will be phased out by end of 2010,
and it will focus on its four core brands, Chevrolet, Cadillac, Buick
and GMC. GM officials plan to decide how to handle its Saab, Saturn and
Hummer brands by the end of 2009.
During the second and third quarters of 2009, GM plans to reduce its vehicle
production by approximately 190,000 vehicles.
In an effort to improve its balance sheet, GM's plan includes an offer
of a bond exchange offer for $27 billion of its unsecured public debt;
the company would exchange shares of the company with the U.S. Treasury
for $27 billion in debt and the Voluntary Employee Benefit Association
(VEBA) for $20 billion in debt. However, in a press conference today,
GM chief executive officer Fritz Henderson said these terms still are
to be negotiated.
"The exact percentages have yet to be negotiated," Henderson
However, if the exchange isn't accepted or percentages aren't agreed upon,
GM officials say bankruptcy may be a probable option.
"The bond exchange needs to be successful to avoid bankruptcy,"
Right now, the company says its plan, under any terms, is to change the
way it does business.
"Our job is basically be lean, flexible and customer-focused,"
As for how GM suppliers will be affected moving forward, Henderson said,
"We are concerned about suppliers and think we can manage through
it, but I can't sit here today and tell you what's going to happen."
for full text of GM's revised Viability Plan.
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