GM to cut 21,000 US factory jobs, shed Pontiac

[tomm2thumbs]

Source: AP/Yahoo

DETROIT – General Motors says it will cut 21,000 U.S. factory jobs by next year and phase out its storied Pontiac brand as part of a major restructuring effort needed to get more government aid. The struggling automaker also says it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of debt-for-equity swap.

The annoucements came in a filing Monday with the Securities and Exchange Commission.
GM is living on $15.4 billion in government loans and faces a June 1 deadline to restructure and get more government money. If the restructuring doesn't satisfy the government, the company could go into bankruptcy protection.

Read more: http://news.yahoo.com/s/ap/20090427/ap_on_bi_ge/us_gm_plan

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[blue_onyx]

1. 21,000 more people to the unemployment line

That doesn't even include dealer jobs. It's sad that they have to close Pontiac but I can understand why they are doing it.

[Old Hob]

2. They shouldn't be cutting Pontiac. They're keeping Cadillac and Buick

Both Cadillac and Buick appeal to, basically, the same market demographic, affluent older people. Pontiac has always produced "cars for the masses". They should have cut Buick and kept Pontiac IMO.
GM knows what they're doing though. :sarcasm:

[blue_onyx]

3. "Cars for the masses" is Chevy's territory

Chevy is the mass market brand, Cadillac is luxury brand, and Buick is the middle ground between them. Plus, Buick is profitable and popular in China where there's the best potential for economic growth. I agree with GM's decisions regarding their brands.

[lithiumbomb]

9. agreed

GM's in a tough spot. Hopefully the G8 can live on as a Chevrolet but it doesn't look good. Besides that the only other unique vehicle is the Solstice/Sky twins, which I suspect will just vanish outright since Saturn is also going away at some point. Every other vehicle in their lineup has a clone or similar vehicle that can be found at a Chevrolet dealership or in the case of the Vibe, at a Toyota dealership.

[CatholicEdHead]

7. Buick is big in China, so that is why it is staying

[Old Hob]

8. Maybe GM should ask the Chinese for a bailout then?

instead of us.

[Psephos]

13. You mean, the way the Chinese are being relied upon to bail out the new US $2 trillion deficit?

Which, if you think about it, means the Chinese ARE bailing out GM.

Seriously.

[oxygen destroyer]

15. Yeah

Many people have been asking why the dollar hasn't crashed yet. Will the United States ever face a bill for the string of massive trade deficits that it has been running for more than a decade? Including interest payments on past deficits, the tab for 2006 alone was over $800 billion dollars - roughly 6.5% of US gross national product. Even more staggeringly, US borrowing now soaks up more than two-thirds of the combined excess savings of all the surplus countries in the world, including China, Japan, Germany, and the OPEC states.

Foreigners are hardly reaping great returns on investing in the US. On the contrary, they typically get significantly lower returns than Americans get on their investments abroad. In an era in which stock and housing prices are soaring, the central banks of Japan and China are holding almost two trillion dollars worth of low-interest bonds. A very large share of these are US treasury bonds and mortgages. This enormous subsidy to American taxpayers is, in many ways, the world's largest foreign aid program.

http://www.guardian.co.uk/commentisfree/2007/feb/07/bettingwiththehousesmoney

[Psephos]

16. excellent post and good link - thx n/t

[Psephos]

11. Buick enjoys a premium brand image in China, but not Pontiac

This is a look forward, not backward, for best global brand positioning. The North American car market is mature and stagnant, while the Chinese market will see strong and continuous growth.

GM hasn't made profits in its North American operations for many years. Its global operations have subsidized North America. Those on this board who lambaste GM wanting to build overseas business don't know squat. (This is not a reference to you, Old Hob.) :hi:

[excess_3]

10. not necessarily

many will likely get PRODUCTIVE jobs.

the US already has way too many SUVs on the road.

[Auggie]

4. Damn shame

Pontiac always represented some of the more exciting cars in GMs line-up.

[SpartanDem]

5. There is some talk that

the G8 could live on as the new Impala which is need of an overhaul

[snooper2]

6. Hmm, maybe my 06' Grand Prix will go up in value

:rofl:

[RonHack]

12. Much like the Oldsmobile cars/SUVs that were phased out? Not likely.

The way I see it, phasing out Pontiac was a bad move on GM's part. MOst car companies need a sporty image to woo the younger, up-and-coming crowd.

- Chevy brands now market mostly to basic- and budget-minded people
- Pontiac goes for the adrenaline-rush crowd (think Trans-Am)
- Buick aims for the middle, between sporty and luxury, but upgrading its image towards the mid- and high-end isn't impossible for this lineage.
- Cadillac, in my mind, now represents overly-affluent, "fogies". Over-sized boats, in other words.

What I would've done, instead of dropping Pontiac, was slim down the crossovers (Buick cars that share similarities with Chevy cars, for example), kill the Cadillac brand, spin off Saturn (like most Saturn fans wanted for a long time), sell off Hummer to someone else (hopefully killing those godawful H2 and H3 SUVs, and bringing back the "true" H1), and negotiate on more level-handed terms with Sweden about letting go of Saab (or is it Norway? I forgot).

That way, three brand names under one GM, for each segment of the adult population worldwide. AND maintains the popular brands overseas (Buick in China, for example).

Of course, that's only me.

[liberalpragmatist]

14. Cadillac is one of GM's most profitable units

And though they still have some "old fogey" cars like the DTS, the CTS has gotten a much younger demographic and over the past few years has single-handedly make Caddy look like a plausible competitor to the import luxury brands.

[lithiumbomb]

17. Killing pontiac is sad but was the best route.

- Chevy brands now market mostly to basic- and budget-minded people
- Pontiac goes for the adrenaline-rush crowd (think Trans-Am)
- Buick aims for the middle, between sporty and luxury, but upgrading its image towards the mid- and high-end isn't impossible for this lineage.
- Cadillac, in my mind, now represents overly-affluent, "fogies". Over-sized boats, in other words.

With all due respect, I think you're view of what GM makes today is about 10 years out of date.

Pontiac was marketed as the "excitement" division. But what do they make _today_ that is exciting? The G8 and the Solstice. The G8 is very well regarded, the Solstice has done ok, but neither are selling very well. There hasn't been a Firebird/Trans Am for 7 years. So if you want to keep Pontiac for the adrenaline-rush crowd, they're going to have to create a new line of products that are actually interesting. Selling clones of the Chevy Aveo, Chevy Cobalt, Toyota Matrix, and Chevy Equinox does not a division of excitement make.

Cadillac is probably GM's big success story of the past 5 years, turning the whole line around into a bunch of generally well regarded vehicles sold worldwide, especially the CTS, which isn't anything close to an oversized boat.

Buick sells more vehicles worldwide than Pontiac. They're not terribly exciting, but worldwide brand recognition goes a long way. Pontiac is only sold in North America.

What I would've done, instead of dropping Pontiac, was slim down the crossovers (Buick cars that share similarities with Chevy cars, for example), kill the Cadillac brand, spin off Saturn (like most Saturn fans wanted for a long time), sell off Hummer to someone else (hopefully killing those godawful H2 and H3 SUVs, and bringing back the "true" H1), and negotiate on more level-handed terms with Sweden about letting go of Saab (or is it Norway? I forgot).

Pontiac has a lot more rebadging going on than Buick. Buick only sells three models in the US market currently. The Buick Enclave shares platforms with the Chevy Traverse, but is more luxurious and styled completely differently. The Buick Lucerne is closely related to the Cadillac DTS and built on the same line. The 2010 Buick LaCrosse is nearly a joint China-US product built on a platform shared with a number of GM vehicles, including the Malibu.

I wish the future Saturn the best of luck. They're going to need products from some manufacturer as they're going to be a brand that is nothing more than a dealer network.

General Motors owns the "Hummer" brand, and that's what's for sale. The H2 and H3 are based on GM platforms and parts. The H1 was the civilian version of the military HMMWV. The H1/HMMWV are all built by AM General. AM General quit making civilian versions as they were only selling about 100 a year and needed the capacity for military production. Any sale of "Hummer" is little more than the brand name. The classic Humvee stays with AM General.

Sadly there's little to be made from Saab.

It's unfortunate that GM has ended up in this current state of affairs, but they have very little options left. Here's what they're probably going to be left with at the end of the calendar year:

Opel/Vauxhall in Europe/UK, probably selling a large stake of it to generate funds.
Holden in Australia.
Chevrolet worldwide
Buick worldwide
Cadillac worldwide
GMC in North America. I suspect GMC branded vehicles' days are numbered as well but has a few years left in it.
GM-Daewoo in Asia (branded as Chevrolets in many markets)

Sold or killed will be Hummer, Saab, Pontiac, Saturn.