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trickskier
04-27-2009, 11:16 AM
GM to cut 21,000 US factory jobs, shed Pontiac

GM Cuts Pontiac & Plants

DETROIT General Motors Corp. said it will cut 21,000 U.S. factory jobs by next year, phase out its storied Pontiac brand and ask the government to take more than half its stock in exchange for half of GM's government debt as part of a major restructuring that would leave current shareholders holding just 1 percent of the company.

The struggling automaker said it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of a debt-for-equity swap that aims to retire most of GM's $27 billion in unsecured debt.

The announcements 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.

GM said in a news release that it will ask the government to take 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1.

In addition, GM is offering the United Auto Workers stock for at least 50 percent of the $20 billion the company must pay into a union run trust that will take over retiree health care expenses starting next year.

If both are successful, the government and UAW health care trust would own 89 percent of the company's stock, with the government holding over a 50 percent stake, Henderson said.

Deals with the UAW and the Treasury have yet to be finalized, he said.

CEO Fritz Henderson said the objective of the bond exchange is to reduce GM's $27 billion of outstanding debt by about $24 billion. The company estimates that after the exchange, bondholders would own 10 percent of the company.

That would leave current common stockholders with only 1 percent of the company under the deals, GM said.

The debt-for-equity swaps GM wants would reduce its debt by $44 billion from the present figure of about $62.4 billion.

"We would be substantially less levered as a company," said Henderson, who answered questions sitting in a chair on a stage with a gray curtain behind him. At times, he drank from a glass of water on a small table nearby.

Henderson also said if the exchange isn't successful, he would expect to file for bankruptcy protection somewhere around June 1, but such a filing would be unlikely very long before the deadline.

GM shares rose 34 cents, or 20.7 percent, to $2.03 in morning trading.

GM said it would speed up six additional factory closings that were announced in February, although it did not identify them in its news release. Additional salaried jobs cuts also are coming, beyond the 3,400 in the U.S. completed last week.

Including previously announced plant closures, the restructuring will leave GM with 34 factories at the end of next year, down from 47 at the end of 2008.

The company also said it plans to reduce its dealership ranks by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605.

"The Viability Plan reflects the direction of President Obama and the U.S. Treasury that GM should go further and faster on our restructuring," Henderson said in a statement. "This stronger, leaner business model will enable GM to keep doing what it does best provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country's economy and environment."

The new plan lowers GM's break-even point in North America to an annual U.S. sales volume of 10 million vehicles, the company said. That's slightly more than the current sales rate, and most economists expect an uptick in the second half of the year.

"This lower break-even point better positions GM to generate positive cash flow and earn an adequate return on capital over the course of a normal business cycle, a requirement set forth by the U.S. Treasury," the statement said.

The company said it would phase out its storied Pontiac brand no later than next year, and the futures of its Hummer, Saturn and Saab brands will be resolved by the end of this year by either selling them or phasing them out.

For Pontiac, the decision means the death of a brand known for its muscle cars including the Trans Am made famous in movies and the GTO, the subject of a nostalgic song by the Beach Boys.

Henderson said in a news conference that the company was spread too thin to make Pontiac work.

"We didn't think we had the resources to get this done from a product perspective," or marketing, he said Monday at a news conference.

He said the decision was very tough for many at GM because of the brand's heritage.

Henderson said GM wants to develop a plan that doesn't have to be repeated.

"We only want to do this once," he told reporters.

Henderson said talks continue with potential parties to buy a stake in Opel and are expected to continue through the end of May. He said the company would continue to have a presence in Europe as a stakeholder.

"I don't expect we would be absent from the European market," he said, adding that it would be under a different structure than current ownership of Opel.

One of the conditions to get aid from Germany is to have a private investor in Opel. Henderson said discussions on Opel continue. Chevrolet is one of the fast-growing car segments in Eastern Europe and Russia, he said.

Monte
04-27-2009, 11:37 AM
Somehow I knew that was coming.. I wonder when they will merge GMC trucks into Chevy production or vice versa..

Next will be Buick....

Jerseydave
04-27-2009, 11:39 AM
Bad decision in that they should get rid of Buick first........I mean come on do any people under 75 by Buicks anymore? :D

GMC truck and Chevy trucks are basically the same, why not get rid of GMC light trucks and just keep the medium duty trucks instead?

And BTW, when are they ever going to see the light and make a Suburban with the dura-max diesel??? Silly GM! :rolleyes:

captain planet
04-27-2009, 11:44 AM
Bad decision in that they should get rid of Buick first........I mean come on do any people under 75 by Buicks anymore? :D

GMC truck and Chevy trucks are basically the same, why not get rid of GMC light trucks and just keep the medium duty trucks instead?

And BTW, when are they ever going to see the light and make a Suburban with the dura-max diesel??? Silly GM! :rolleyes:

That would ruin their CAFE rating because the Suburban is considered a passenger vehicle.

I would bet that GM figures out a way of keeping the Pontiac Vibe. They do quite well with that little car. It rates high in Consumer Reports, customer satisfaction, and reliability. Probably since it is just a Toyota Matrix with different decals on it.

trickskier
04-27-2009, 11:59 AM
Bad decision in that they should get rid of Buick first........I mean come on do any people under 75 by Buicks anymore? :D

GMC truck and Chevy trucks are basically the same, why not get rid of GMC light trucks and just keep the medium duty trucks instead?

And BTW, when are they ever going to see the light and make a Suburban with the dura-max diesel??? Silly GM! :rolleyes:

From what I understand Buick sells well in China.

cbryan70
04-27-2009, 12:06 PM
From what I have heard GM is going down to cad, buick, and chevy products only. Both buick and cad products sell VERY well in china

damaged442
04-27-2009, 12:16 PM
So much for some more great automotive history! What else will soon be going the way of Oldsmobile? The fact that Buick sells millions of units in China is the ONLY reason that GM hasn't gone under months ago. Yet they still keep Saturn?! Ugh, my head hurts!

Big Dogg
04-27-2009, 01:06 PM
Maybe I assumed incorrectly and I understand that GM has to undergo restructure, however, wasnt part of the point of the bail out money was to save jobs and now they are cutting 21000. Sounds like some of the GM execs need to be taken out back and straightened out. They caused this mess, let them pay for it with their jobs not the jobs of the ppl taking orders out on the production line.


NJSkier, couldnt agree more on the diesel option. The U.S. really needs to see the potiental that diesel has to offer. I am stil waiting on them to develop and Avalanche with a Dura-Max and an Allison tranny. Would really like to see the stats on how many F250 and 350 Fords are sold with Diesel motors vs. gas. I think it would be shocking to see how well Ford does with the Powerstroke.

TOO-TALL
04-27-2009, 01:10 PM
There gonna keep hummer....:confused::confused::confused::confused:

BrianM
04-27-2009, 01:40 PM
It had already been announced that Saturn, Saab and Hummer are going away either through sale or shutdown. Pontiac was next up. As said above GM will be 4 brands by 2011 Chevy, Cadillac, GMC and Buick. As said above Buick is a huge seller in the Chinese market and although a lower volume seller is more profitable than Pontiac. GMC is the second largest GM seller with just under 400,000 units a year.

Ski-me
04-27-2009, 02:33 PM
If they now combine GMC and Chevy to only offer one truck brand, perhaps now the chevy 1/2 ton will outsell the ford f150. :rolleyes:

dog paw
04-27-2009, 02:36 PM
That would ruin their CAFE rating because the Suburban is considered a passenger vehicle.

I would bet that GM figures out a way of keeping the Pontiac Vibe. They do quite well with that little car. It rates high in Consumer Reports, customer satisfaction, and reliability. Probably since it is just a Toyota Matrix with different decals on it.



I agree Vibes rock! Put 80k in two years on my first one. The GT's are a cut or two above a Matrix I dont think even the Matrix R uses the Vibe GT engine but I could be wrong.


Boy we got out in the nic of time LOL! GM bought out our franchise for a pretty penny the first of the year. Yep Saturn Saab and Hummer are done GMC is going to keep Buick company for a while and a WHOLE lot of dealers are going away.

Brought it on themselves they deserve to choke.

h2oskifreak
04-27-2009, 04:44 PM
I have never seen a Pontiac I liked, so I won't miss them a bit. Loss of jobs is a drag. Personally when I was forced to drive one (rental) I thought it was a real P.O.S. I personally won't miss the line, especially if it has the end result of giving the surviving lines strength.

aremsing
04-27-2009, 05:13 PM
As a person from Detroit, and who works directly with the automotive field this is another sad day. IMO Pontiac has been a brand since the mid 90's that has been poorly managed and marketed, but I'm still surprised to see it go.

TX.X-30 fan
04-27-2009, 05:22 PM
From what I understand Buick sells well in China.





Bruick rake rice kaw. :D

TX.X-30 fan
04-27-2009, 05:23 PM
They will make the cars the Government tells them we want.

scott023
04-27-2009, 11:48 PM
Bruick rake rice kaw. :D

LOL... I thought the original poster that made the comment was kidding... obviously not. :D

JohnE
04-27-2009, 11:52 PM
And BTW, when are they ever going to see the light and make a Suburban with the dura-max diesel??? Silly GM! :rolleyes:


Dually of course...

TMCNo1
04-28-2009, 12:43 AM
"I took a little trek down memory lane, back in my younger years, well, not really, It was in the back seat of a Pontiac when I got lucky for the first time!...........................Unfortunately I didn't have a date!" David Letterman

trickskier
04-28-2009, 08:29 AM
"I took a little trek down memory lane, back in my younger years, well, not really, It was in the back seat of a Pontiac when I got lucky for the first time!...........................Unfortunately I didn't have a date!" David Letterman

You really expect us to believe that was Letterman's experience not yours??? :confused::rolleyes:

TMCNo1
04-28-2009, 09:04 AM
You really expect us to believe that was Letterman's experience not yours??? :confused::rolleyes:

I was in a '55 Chebby!:rolleyes::D

trickskier
04-28-2009, 09:07 AM
I was in a '55 Chebby!:rolleyes::D

OK...................Glad we got that cleared up............:rolleyes:

jwchapman
04-28-2009, 09:32 AM
I do not believe in Socialism. I will never buy a car from a company owned by the government. And as for the union jobs/pensions/benefits - the union was supposed to be a "partner", not an adversary. They played a major part in GMs problems and should suffer the consequences like everyone else. They made demands they knew couldn't be met and are demanding the government (that is us, the taxpayers) now meet these obligations. I don't see any reason our money should be transferred to GM workers or retirees. As for the executives/managment - the sooner GM admits it is bankrupt (which it is) and files, the sooner new management can be installed or the assets can be sold to someone who can better use them.

scott023
04-28-2009, 10:27 AM
Hopefully they will be able to rebadge the G8... IMO the only car Pontiac has that could/should be around for the long haul.

3event
04-28-2009, 10:59 AM
The G8 is an interesting vehicle - seems like a lot of bang for the buck. However, I think Pontiac may have been too far gone by the time they introduced it. They are still insisting on sticking lots of plasticky trim, vents, and scoops all over their high end models, which should have gone out of fashion years ago. If it had a nice clean look it might have a better chance against German and Japanese sport sedans. Just my opinion and I may not be the target buyer they were after in any case.

BrianM
04-28-2009, 11:41 AM
Hopefully they will be able to rebadge the G8... IMO the only car Pontiac has that could/should be around for the long haul.

I am with you. G8/Holden Comador is arguably the best sedan GM has produced in a very long time and IMHO the only Pontiac worth a crap in the past 30 years. The car actually performs very well and gets great reviews. I think the G8 will pop back up in the Chevy lineup as either the Impala SS or maybe as the all new Chevelle.

east tx skier
04-28-2009, 11:49 AM
Here's a little list of the ten best Pontiacs. Not sure I agree with the order (Can I hear one for the Bandit). I suppose the 10 worst would've been a bit tougher to decide.

Link (http://jalopnik.com/5229443/the-ten-greatest-pontiacs)

BrianM
04-28-2009, 12:03 PM
Here's a little list of the ten best Pontiacs. Not sure I agree with the order (Can I hear one for the Bandit). I suppose the 10 worst would've been a bit tougher to decide.

Link (http://jalopnik.com/5229443/the-ten-greatest-pontiacs)

I don't know about putting the G8 ahead of the 64 GTO but that just goes to show how good a car many feel the G8 is.

captain planet
04-28-2009, 12:27 PM
I don't know about putting the G8 ahead of the 64 GTO but that just goes to show how good a car many feel the G8 is.

As much success as Pontiac/GM has with the G8 and the Vibe, don't you see them coming back as a Chevy model? You see a bunch of these cars running down the road.

scott023
04-28-2009, 01:36 PM
The G8 is an interesting vehicle - seems like a lot of bang for the buck. However, I think Pontiac may have been too far gone by the time they introduced it. They are still insisting on sticking lots of plasticky trim, vents, and scoops all over their high end models, which should have gone out of fashion years ago. If it had a nice clean look it might have a better chance against German and Japanese sport sedans. Just my opinion and I may not be the target buyer they were after in any case.

I agree completely... drop the gimmicky sh!t and give uus a clean cut car, but the G8 is a monster. I just bought a new car, so I have done a lot of research and test drives and there are not a lot of vehicles out there that have the bang for the buck that the G8 has. I didn't buy the G8 because of the amount of plastic sh!t on the outside. (I opted for the CTS).

Ski-me
04-28-2009, 02:06 PM
The CTS is a nice car. Rented one once and had a great time.