No more Pontiacs...evar.

[snoopdan 5,000+ posts]

NEW YORK (CNNMoney.com) -- General Motors announced plans to cut 23,000 U.S. jobs by 2011, drop its storied Pontiac brand and slash 40% of its dealer network in its latest bid to stay out of bankruptcy.
GM also announced an offer to its bondholders to swap $27 billion of the company's unsecured debt for stock. GM is offering bondholders 225 shares of its stock for every $1,000 it owes the bondholders in principal.

The moves are GM's latest efforts to cut costs and stem losses that have dogged its North American auto operations since 2005. But Monday's restructuring announcement goes much further than the viability plan GM unveiled to President Obama's auto industry task force in February.

The company had announced many of the job cuts in February, but Monday's news that GM would have about 38,000 hourly U.S. employees by 2011 represents an additional reduction of 7,000 to 8,000 jobs beyond what GM disclosed in its previous viability plan.

GM also confirmed reports that surfaced Friday and officially announced plans to drop its Pontiac brand altogether. In its earlier restructuring plan, GM had signaled that Pontiac would survive, albeit as a niche offering.

The company also said it would make more cuts to its dealership network than it announced in February, and at a much faster pace. GM said Monday it will cut the number of its dealers by 42% to 3,605 by 2010, up from its original plan to reduce its network to 4,100 dealers by 2014.

The Obama administration's task force, which found that GM's February turnaround plan was not viable, said Monday that the new plan "reflects the work GM has done since March 30 to chart a new path to financial viability." But the task force added that it "has made no final decision regarding the treatment of its current loan to GM or with respect to any future investments in the company."

The administration has given GM only until the end of May to reach deals with creditors and unions to cut costs or be forced into bankruptcy. But the Treasury Department did extended GM an additional $2 billion in loans last week, bringing its total federal assistance to $15.4 billion.

The United Auto Workers union and the ad hoc committee of bondholders were not available for immediate comment on Monday's announcements.

GM will still need to convince bondholders to take the deal and win further labor concessions from the union if it is to stay out of bankruptcy. The union announced a tentative deal with Chrysler LLC late Sunday in an effort to help that company meet an April 30 deadline to avoid its own bankruptcy filing.

If the GM bondholders take the offer, they will end up owning about 10% of GM. But they will be accepting stock worth only $380, based on Friday's closing price, for every $1,000 they are now owed on the bonds.

By accepting the offer, bondholders would be betting that the company's stock would rise in the future, and that the alternative of bankruptcy could result in them getting even a smaller percentage of what they are owed.

But taking the deal will still be risky. Even unsecured bondholders can hope to be paid something back on their bonds if the company is forced into bankruptcy at some point in the future, while stockholders are likely to be wiped out altogether.

If all parties agree to the new restructuring plan, the union controlled trust funds and the Treasury Department are likely to have even larger stakes in the new GM. The move could dilute the value of GM shares held by current stockholders to less than a 10% stake.

Still, shares of GM (GM, Fortune 500), a component of the Dow Jones industrial average, gained nearly 11% in early morning trading due to hopes that the company may now be able to avoid bankruptcy.

any hurt feelings out there?

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[pioneerpimp 5,000+ posts]

yea the GTO was a beautiful car..and the G8 was amazing as well. two years and they decided to give up on the g8. i cant believe this with how many dumb females drive G6s, they are EVRYWHERE

 

[da box king 10+ year member]

wow, I seriosly doubt it will happen. I loved my gtp, and would own a pontiac again.

They will drop saturn way b4 pontiac

 

[SRim23 5,000+ posts]

wow, I seriosly doubt it will happen. I loved my gtp, and would own a pontiac again.
They will drop saturn way b4 pontiac

what part of "officially decided to drop pontiac" didnt you understand? its a done deal.

 

[mokedaddy 5,000+ posts]

Neither the gto or the g8 were built by Pontiac so it may be possible the g8 could be rebadged.

And Saturn has one of the highest customer satisfactions so I doubt they are going anywhere.

 

[JimJ 5,000+ posts]

Bankruptcy by the fall.

 

[mokedaddy 5,000+ posts]

Bankruptcy by the fall.

Possibly but what sucks about that is the American people have already invested so much, it would be very difficult to let them fail at this point.

We should not have bailed them out in the first place imo.

 

[dvrmstrng 5,000+ posts]

i guess i should hold onto my car a little longer

 

[chaunb3400 10+ year member]

//content.invisioncic.com/y282845/emoticons/frown.gif.a3531fa0534503350665a1e957861287.gif

 

[Jmac 10+ year member]

They should just consolidate into 3 brands, anyways. It's not like they can't rename those cars as a Chevrolet.

Chevrolet - Main Branding

Cadillac - Luxury Car Branding

Hummer - Luxury Truck/SUV Branding

Why you need a dozen brands to sell a slightly different version of the same d*mn car, I'll never know. I could see when GM was popular, as it offered market saturation, but people go out of their way to avoid GM products now after decades of sub-par vehicles, so it no longer works. They need to refocus their energy on manufacturing quality vehicles at a competitive price while still retaining a decent profit margin, and dropping those excess brands will help reduce operating costs.

 

[Flipx99 5,000+ posts]

Bankruptcy by the fall.

False...zombie company. But no BK.

 

[thegreatestpenn 5,000+ posts]

gm = fail. they need to drop a few brands, not just pontiac. maybe they can sell a few brands to other car companies //content.invisioncic.com/y282845/emoticons/confused.gif.e820e0216602db4765798ac39d28caa9.gif

 

[JimJ 5,000+ posts]

False...zombie company. But no BK.

I can dream, can't I?

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[dvrmstrng 5,000+ posts]

give the GTO to chevy....GTO ZR1 //content.invisioncic.com/y282845/emoticons/crazy.gif.c13912c32de98515d3142759a824dae7.gif

 

[Flipx99 5,000+ posts]

I can dream, can't I?
//content.invisioncic.com/y282845/emoticons/biggrin.gif.d71a5d36fcbab170f2364c9f2e3946cb.gif

I suppose.

I dunno if GM going BK is a dream, but I get your drift.