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Earlier this week General Motors officially turned off the lights and locked the doors at its Boxwood Road assembly plant for the last time, marking the end of the line for the Pontiac Solstice and Saturn Sky.
The two vehicles (along with the Opel GT) were manufactured at the plant in Wilmington, Delaware, which is being closed as a part of GM’s restructuring process.
General Motors has decided to eliminate the Pontiac brand and sell Saturn to the Penske Automotive Group. The announcement to close the plant came on July 1st when GM filed for Chapter 11 bankruptcy protection. At the time GM gave short notice to plant workers saying the facility would be shuttered by the end of July.
GM spokesman John Raut said the final vehicle to roll off the assembly line was a silver Pontiac Solstice.
Automaker seeks return to former glory with restructured operations and reduced debtload
Today the sun rose on a New General Motors, a move which will also see the sun set on a lot of people’s careers. GM emerged from bankruptcy protection at 6:30 a.m. Eastern Time with news of a serious corporate restructuring plan that will take effect over the next few months.
Due to leadership (and in some cases arm-twisting) by the Obama Administration, the new GM, headed by CEO Fritz Henderson, is poised to return to its once-great status after shedding its debt and healthcare obligations by a massive $48 billion. Much of this comes as the UAW made serious concessions in accepting a new contract with the automaker. GM also hopes to significantly reduce its cash-burn after eliminating a third of it’s dealership network. Additionally, the automaker looks to profit from the sale of the Saturn, Saab and Hummer brands, as well as through selling-off much of its stake in its European operations, including Opel to Canadian autoparts manufacturer Magna International.
“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” CEO Fritz Henderson said in a statement.
Henderson’s plan will see 6,000 (or 20 percent of) white-collar employees lose their jobs by October, with 35 percent of all executives being dismissed. Many executives will be cut from the company’s old Automotive Strategy Board and Automotive Product Board, a complex, multi-tiered system of management which will be axed in favor of a small committee that will meet weekly to make decisions about the future of the company.
Henderson says the move will cut those making the decisions at GM in half as the automaker focuses on its four key brands – Chevrolet, Buick, GMC and Cadillac.
Sales and Marketing will also no longer be under the leadership of one individual, as that part of the company is split. Sales will report directly to Henderson, who was unclear about what that meant for the current Sales & Marketing boss, Mark LaNeve. GM will also bring back veteran Bob Lutz to manage marketing, as well as design, brands and communications.
This will be a particularly vital role as GM looks to introduce a new line of vehicles into the marketplace to help re-brand the company. In total 10 new vehicles will launch in the U.S. in the next 18 months, with 17 overseas.
[Source: Automotive News]
Late Sunday a judge approved the sale of GM’s assets to a group comprised of the U.S. government, the UAW and the Canadian and Ontario governments under the name NGMCO, Inc. The decision will see GM exit bankruptcy court quickly with the ‘New GM’ assets going to NGMCO, while the ‘Old GM’ assets will be sold off to the highest bidder.
Judge Robert Gerber then placed a stay on the proceedings to for four days to hear objections or appeals, but as most of those have already been dealt with, GM is expected to reemerge as a new government-owner company by Thursday.
In a statement Judge Robert Gerber said that he would, “prevent the death of the patient on the operating table.”
Gerber pointed out the seriousness of the matter and the alternative, stating that, “The only alternative to an immediate sale is liquidation – a disastrous result for GM’s creditors, its employees, the suppliers who depend on GM for their own existence, and the communities in which GM operates.”
The New GM will be majority owned by the U.S. government with a 60 percent stake in the automaker. The UAW will get 17.5 percent, while the Canadian and Ontario governments will get 12 percent.
In response to the news GM’s CEO Fritz Henderson released a statement saying that, “A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we’ve had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it’s our responsibility to fix this business and place the company on a clear path to success without delay.”
The Obama Administration’s auto task force has said that sale of GM back to the private sector could begin as early as next year.
[Source: Automotive News]
After continued rumors that General Motors was still shopping-around its European Opel operations, it appears as though a new buyer has been found. RHJ International, a Belgian company has been cited as the latest bidder and apparently a tentative deal could be signed by the end of the week.
Initially Opel was slated to be sold to Canadian autoparts manufacturer Magna International, but those plans have hit several roadblocks. Magna’s deal did not guarantee the same amount of job protection to Opel’s German workforce and so it put in jeopardy a $2.1 billion loan from the German government. Additionally, GM was not excited about the prospect of handing over its technology so that Magna and Russian partners Sberbank and GAZ could use it to build vehicles for the Russian market.
The deal put forward by RHJ, on the other hand, is more likely to be attractive to the German government and GM would not have to fear competition in the Russian marketplace.
According to the Financial Times, however, the RHJ deal is more attractive because of one factor, the price. An initial bid by the holding company had GM sign an agreement with Magna instead, but apparently RHJ has now upped its offer.
According to the Financial Times, GM could sign tentative agreements with both companies, meaning that the sale of Opel to Magna is not completely out of the question.
One of the other Opel bidders, China’s Beijing Automotive Industry Corp., is also expected to make GM a more attractive offer in the near future.
So it looks like Opel is in hot demand and GM is back in the driver’s seat as it looks to get the most for its European operations and emerge from bankruptcy in the best financial state possible.
[Source: Automotive News]
According to a report on Chinese state radio, the sale of Hummer by General Motors to heavy-equipment manufacturer Tengzhong will not go ahead. The report on China National Radio states that Tengzhong’s acquisition of Hummer goes against the government’s efforts to reduce pollution by manufacturing companies in China.
Tengzhong released a statement in response to the report saying that just because the comments were made on state radio, it does not necessarily reflect the will of the Chinese government.
While neither side has released any details of the agreed sale, it is reported to be worth roughly $100 million.
The China National Radio report also stated that China’s National Development and Reform Commission (NDRC) would also seek to stop the sale of Hummer because Tengzhong lacks expertise in auto manufacturing.
Tengzhong also dismissed this report saying that as no NDRC official was cited. The Chinese heavy-equipment manufacturer did admit that no official agreement with Hummer or GM had been signed but did say that it is continuing to work with the U.S. automaker and the Chinese government.
Dalgleish Cadillac, the only remaining Cadillac dealer in the city of Detroit, is being forced into closure next year as a part of General Motors’ restructuring plan. This isn’t just sad because the dealership has been selling Caddy’s in Detroit since 1954. And its symbolism extends beyond GM’s current problems or even the company’s 100 year history.
The city of Detroit, originally Fort Pontchartrain du Detroit, was founded in 1701 by a French explorer. That man’s name was Antoine Laumet de La Mothe, sieur de Cadillac. Yup, the guy the cars are named after.
And in case that isn’t sad enough for you, Dalgleish Cadillac is located across the street from where the first Caddy was made, back in 1902.
When Doug Dalgleish, the 80-year-old owner of Dalgleish Cadillac got the news from GM he was appalled. “They didn’t even have the guts to sign anyone’s name.”
The dealership actually passed an initial round of closings but was later notified that its contract would not be renewed in 2010. The notice was appealed, but GM rejected it.
Doug Dalgleish’s son (also named Doug) believes that the closure will hurt General Motors and says that a lot of Cadillac customers buy from Dalgleish not so much because of the cars, but because of the relationships they have built up over the years.
“GM thinks their product is stronger than it is,” he said in an interview with Automotive News. “But people buy from us and other mom-and-pop dealers around the country because we’ve served them for generations. Once we’re gone, I think GM will lose those customers.”
[Source: Automotive News]
Contrary to recent reports that the Vibe would be the sole Pontiac model to continue on into 2010, General Motors has now decided to end production of the utilitarian vehicle early. Production of the Vibe at the GM/Toyota joint-venture New United Motor Manufacturing Incorporated (NUMMI) facility will end this August.
Several weeks ago GM’s interim CEO Fritz Henderson stated that the G8 would not continue on past 2009, while other reports highlighted the elimination of the G3 and G5. The G6 will be offered to rental, corporate and government fleets.
There is no official word on when the Solstice, but it is also expected to be phased-out this year as GM seems dedicated to eliminating the Pontiac brand before 2010 even gets started.
GM continues to reiterate that it wants to work with Toyota to develop another shared platform at the NUMMI facility. Toyota may, however, have its hands full with the upcoming Toyota-Subaru project.
There is hope, be it ever so slight, that the Pontiac G8 may live on even though the brand it’s attached to is most certainly slated for elimination.
“I know there’s still discussions on it,” GM’s product boss Tom Stephens told Automotive News, giving some hope to the legions of G8 fans that haven’t had anything to get excited about since the fourth generation Firebird came out in 1993.
Stephens did add, however, that as Chevrolet already has several sedans, another one wasn’t really necessary.
The G8 could work as a high-performance SS version of the Impala, or even as the basis of a Buick vehicle – although that seems highly unlikely. And unfortunately for G8 fans, GM already has an excellent rear wheel drive platform that underpins the Cadillac CTS.
Still, the sun hasn’t quite set on the G8 and there’s plenty that can happen between now and the end of 2010 when Pontiac is scheduled to be scuttled.
GM has continued to insist that the Pontiac brand isn’t for sale and that it will be eliminated as a part of its Viability Plan. While the brand as a whole has struggled significantly in recent years, the G8 has been a success, with high sales and rave reviews from journalists. This has prompted some to speculate that the closing of Pontiac (a brand known for performance) may be more of a political decision than an economic one.
The long list of General Motors dealerships got a lot shorter recently, but it will get shorter still as the company has made known plans to reduce the number of Cadillac dealerships in its network.
“Our current footprint of 1,400 Cadillac dealers, most of which are dualed, is out of sync with modern luxury automotive retail,” said GM’s sales boss Mark LaNeve at a dealership conference last week.
Those 1,400 dealers sold an average of 110 cars last year. Other luxury brands operate on almost the reverse, with Lexus selling 1,158 cars on average from just 226 dealers.
As many of those dealers are paired up with other GM brands it often means that there are Cadillac dealers in regions that might not normally sustain such a business. Despite that, GM’s plans are to focus on cutting dealerships in urban centers where customers have another Caddy retailer in close proximity.
The number of dealers to be cut is reported to be significant and it would have to be for the Cadillac brand to be as streamlined as its German and Japanese competitors.
Based on the numbers, the amount of Cadillac dealership closings could be as many as 700. After the recent announcement that GM would cut 1,124 dealers from other parts of its company, followed by news that 405 Pontiac, Saab, Saturn and Hummer dealerships would close, the total number of GM dealerships left totals 4,300 – that’s 700 more than what GM listed in its viability plan to the U.S. government.
There is no word on how much advance notice the terminated dealerships would get but the deadline for closures would be the same as with the other dealerships – October 31, 2010.
Official Announcement Expected Later Today
General Motors has reached an agreement with the Penske Automotive Group on the sale of its Saturn brand. An official announcement is expected to be made by both parties later today.
The Penske Automotive Group was thought to be one of the front-runners in the bidding war, which also reportedly included Nissan/Renault, Mitsubishi and investment firm Telesto Ventures.
The news comes just days after GM sold off its Hummer brand to Chinese industrial equipment manufacturer Tengzhong.
The Penske Automotive Group is comprised of several key automotive related companies and boasts the second largest dealer network in the U.S., accounting for sales of 171,872 vehicles in 2008.
Penske also distributes the SMART car throughout the United States under a deal with Mercedes parent company Daimler.
As a former race car driver, Roger Penske continues to be involved in motorsports, and currently runs teams in three major racing series: the NASCAR Sprint Cup, the American Le Mans Series (ALMS) and the Indy Racing League (IRL).
The sale of Saturn would leave GM with just the Swedish brand Saab to dispose of. It has been reported that buyers for Saab have been narrowed down to just two: Swedish supercar maker Koenigsegg and the U.S.-based Renco Group.
The news was reported this morning in the New York Times, which also said that after an initial contract with GM runs out, the Penske operated Saturn brand is expected to sell Renault vehicles in the United States. Does this mean North America will finally get cars like the Clio and Megane…. or even the Megane R.S.? (pictured above)
[Source: New York Times]
It seems like there is a new update in the Saab and Saturn sell-off every day… so why stop now. Yesterday we reported that the list of Saab buyers was down to three and now that list has been shortened to just two suitors.
Saab CEO Jan-Ake Jonsson told Swedish business paper Dagens Industri that there are now just two parties in the running. He also said that the final negotiations could happen as early as this week.
“This can go fast now and should absolutely be wrapped up in a maximum of two weeks,” he said in a report.
Fiat has recently denied rumors that it was interested int he purchase of the Saab brand and so that leaves Swedish supercar maker Koenigsegg and the U.S.-based Renco Group.
With news of a tentative deal to sell off Hummer coming yesterday, GM still hasn’t made any decisions about its Saturn or Saab brands – but apparently it has plenty of offers to entertain.
GM CFO Ray Young said that Saturn has as many as 16 suitors, while the Swedish Saab brand has three.
The list of Saturn buyers is reported to include Penske Automotive Group, Malcolm Bricklin, Mitsubishi, Nissan/Renault and investment firm Telesto Ventures.
Young did say that it is interested in working with the Saturn buyer when it comes to vehicle assembly.
As for Saab, Swedish business paper Dagens Industri is reporting that the three buyers are U.S. financier Ira Rennert and his Renco Group, Fiat and Swedish supercar maker Koenigsegg.
America's manufacturing engine runs out of gas
While President Obama and General Motors CEO Fritz Henderson are both expected to hold press conferences today, officially GM has already filed for Chapter 11 Bankruptcy Protection.
Once the world’s largest automaker and a symbol of the success of free market economics, GM is now a symbol of failure. In the 1950s it employed over 500,000 people and produced more than half of all the vehicles sold in the United States. Now it also holds the dubious title of the world’s third-largest bankruptcy – and the largest bankruptcy for a manufacturing company.
General Motors, backed by yet another government loan from the U.S. Treasury is expected to get the same fast-tracked bankruptcy proceedings as the smaller U.S. automaker Chrysler – which filed for Chapter 11 just one month ago and which already appears to be emerging. Just yesterday a judge approved the sale of Chrysler’s assets to a group comprised of Fiat, the U.S. government and the UAW. The Chrysler Chapter 11 proceedings were seen by many as a practice for the much larger General Motors corporation.
As a part of the Chapter 11 filing GM will receive $30 billion from the Obama administration, giving it a 60 percent stake in the once-great automaker. The Canadian government will take a 12 percent stake by providing an additonal $9.5 billion, while the UAW gets a 17.5 percent share and bondholders get 10 percent.
The Chapter 11 proceedings are expected to take anywhere from 60 to 90 days but the future of General Motors is anything but certain. In the short term the automaker will most likely push ahead, but the big question mark is if it can become financially viable and build cars that people want to buy – something which is further complicated by the government’s involvement.
While the Obama Administration was reluctant to get involved it almost had no choice as without government help both General Motors and Chrysler were doomed to failure – at a time when the U.S. economy already has enough troubles. But now that the government is involved it doesn’t appear to be willing to part with its economic engine. Even when GM and Chrysler emerge from bankruptcy, the government’s Autos Task Force will continue to be involved in the future of both companies.
With a 60 percent stake in General Motors and a political agenda, will the Obama Administration work with GM and Chrysler to ensure both companies build cars people want – or build cars it wants people to want?
Only time will tell.
[Source: Automotive News]
Japanese automaker could use Saturn dealerships to almost double its retail network
Oddly, it seems as though Saturn is far more interesting and far more loved as the up-for auction arm of a doomed for bankruptcy company than it ever was as regular old car brand. To date the Penske Automotive Group, automaker Nissan/Renault and investment firm Telesto Ventures have all been cited as potential buyers. Now we can add Mitsubishi to that list.
According to a report in the Detroit News the Japanese automaker is in talks with GM to supply its vehicles to the existing Saturn dealership network. The move would see Mitsu expand its number of dealerships in the U.S. by 380 – up from the current 430 dealerships.
The move seems unlikely as Mitsubishi is suffering in the current economic downturn. In April the company sold just 3,919 vehicle in the U.S., down 55.9 percent from the same month in 2008.
Mitsubishi is, however, eager to gain a larger percentage of the U.S. market and until recently was even engaged in talks with Chrysler to bring a small electric car called the Peapod Mobility to the U.S.
The company does appear to be beefing up it’s product line and rebranding its existing products. Company representatives have made it clear that the i MiEV electric micro-car (pictured above) will come to North America and a coupe version of the car has been explored in concept form. Additionally, Mitsu recently launched the Sportback version of the Lancer. As far as rebranding, the company is finally picking up on the success of the Lancer and Evo models and is giving that look to the rest of its line. We’ve already seen it with the 2009 Eclipse and the next generation Outlander promises to have an Evo-style nose.
[Source: Detroit News]
As a government imposed June 1st bankruptcy deadline looms on the horizon, the UAW is reporting that it has reached a tentative agreement with General Motors and the U.S. Treasury.
The specifics of the agreement will not be made public until the contract is ratified, however, the UAW did say that changes have been made to the employees retiree health trust, referred to as the Voluntary Employee Beneficiary Association. It is not clear if the UAW has worked out a deal similar to the one with Chrysler that would see the union take control of a portion of the company.
Negotiations between the Canadian Auto Workers (CAW), GM and the Canadian Federal and Ontario Provincial governments have yet to result in an agreement.
As with Chrysler, a ratified contract would not necessarily mean that GM would avoid filing for Chapter 11 bankruptcy protection.
[Source: Automotive News]
The possibility that Penske Automotive Group may in fact purchase the Saturn brand from General Motors has just increased significantly. Penske has acquired the services of former Chrysler President Tom LaSorda as an adviser on the bid.
Penske is the second largest dealership group in the U.S. and also distributes the SMART brand of cars in the U.S. for Mercedes parent company Daimler.
The Detroit News is reporting that the Penske bid may involve other partners, including Serra Automotive Inc. and the Suburban Collection. Serra Automotive is the 15th largest dealership group in the U.S. with 21 stores in six states. The Suburban Collection is the 13th largest group and boasts 7 Saturn dealerships.
While many of GM’s brands have received little attention from prospective buyers the list of parties interested in Saturn seems to grow daily. Bloomberg is reporting that Canada’s Magna International is interested in Saturn, while other recent reports indicate Renault/Nissan is interested.
Saturn has said it has engaged in talks with the investment firm Telesto Ventures about a possible sale.
Currently GM is eager to part with Saturn as it faces a June 1st restructuring deadline.
[Source: Automotive News]
General Motors will cut 1,124 dealerships loose by October of 2010. The struggling automaker on the verge of bankruptcy sent letters out to the dealerships last week as it searches for ways to reduce it’s current dealer network of 5,969 to just 3,600.
GM says it will not renew dealership agreements with the 1,124 companies when their contract renewal comes up in October of next year.
The dealerships being cut are considered to be poor performers and accounted for just 7 percent of GM’s U.S. sales last year.
Another 470 dealerships are also scheduled to be let go as GM parts with the Hummer, Saab and Saturn brands. An additional 35 stand-alone Pontiac dealerships will also be cut.
Those dealerships not already notified aren’t necessarily safe, however, as the remaining 4,300 stores is still 700 over the 3,600 cap.
The news of GM’s numerous dealership closings came just one day after Chrysler announced it would drop 789 U.S. dealerships.
[Source: Automotive News]
Days after General Motors announced it would cut it’s number of dealerships in the U.S. by 1,124, GM Canada is following suit. The number of Canadian GM dealerships being closed may sound much smaller at 292, however, with roughly 700 dealerships nationwide, the cuts represent a 42 percent dealership reduction.
GM Canada says the Sales & Service agreements it holds with the dealerships will not be renewed once they expire in October of 2010.
GM Canada says it focused on cutting dealerships in urban areas with higher populations, in an effort to continue to offer GM vehicles in rural communities as well. Considering the country’s large land mass and relatively small population, however, visiting a GM dealership after October 2010 may mean a much longer drive for some rural residents.
“The end result in Canada will be a more competitive dealer network with higher volumes, while continuing to maintain the strongest and broadest dealer network in the country better equipped to serve GM customers,” reads a GM Canada statement.
Official release after the jump:
GM Vice Chair Bob Lutz Kisses a Saturn Astra. Recently he kissed-goodbye to all his stock in the company.
In a move that should probably be illegal (but isn’t) six General Motors executives recently sold off all their shares in the company. That’s right, those same guys who helped drive GM into bankruptcy traded in all their stocks when a trading window opened.
The move signifies that GM will most likely file for Chapter 11 and while it does seem unjust that these executives are permitted to jump ship, smart investors will see this as a sign. (You know what they say when the rats start to leave a ship).
GM’s Vice Chairman Bob Lutz (pictured above) sold off all of is 81,360 shares at $1.61 each, cashing in on $130, 969.60. The North American President of GM, Troy Clarke, dumped his 21,380 shares for just $1.45 each for a total of $31,001.
The remaining executives involved in the sell-off were VP Thomas Stephens, as well as Group VPs Gary Cowger, Carl-Peter Forster and Ralph Szygenda.
The move prompted the stocks to continue their slide, dropping 17 cents (or 11 percent) to just $1.44 by days end. In the past year GM’s stock value has declined by 92 percent.
General Motors is facing a June 1st restructuring deadline by the Obama administration or else the federal government will pull the funding plug on the automaker. As it stands a bankruptcy scenario seems unavoidable.
Impala SS and others scheduled for termination this year
Late last week we reported that GM was ceasing production of the Cobalt SS Sedan and now the automaker has confirmed several other performance models will get the axe.
That’s right, the latest vehicles to face the guillotine in this French Revolution-style automotive bloodbath are three (or four depending on how you look at it) high-performance models: the Cadillac STS-V, the Chevrolet Impala SS and the Pontiac G6 GXP (Coupe and Sedan).
With the deletion of the Pontiac brand, we’re not even sure why GM is mentioning the high-performance GXP models. As for the Impala SS, this latest 8th generation model might not be all that captivating, even though a 303hp 5.3-liter V8 allows the car to hit 60 mph in 5.6 seconds, but the Impala SS name is an American Icon. The same can’t really be said for the STS-V, despite it’s supercharged V8, which boasts 469hp.
We could say its a conspiracy by the Democrats to get rid of high performance cars and replace them with green machines, (and while that could still be true) the low volume sales of these models are a convincing argument.
For GM loyalists, the news might get worse still. When asked about the future of the Cobalt SS Coupe, Chevy spokesman Terry Rhadigan would only say that it would continue for, “a while longer.”
Bankruptcy or not, when the recession is over and people start looking for high-performance vehicles again, GM is not going to be an appealing option.
[Source Automotive News via WorldCarFans]
Possibility that sporty Renault models could be sold through Saturn dealer network
The sale of Saturn to Nissan-Renault could see cars like this Mégane Renault Sport roaming U.S. streets.
The rumor mill keeps churning out new and exciting candidates interested in buying GM’s Saturn brand. The most recent speculation is that Nissan/Renault might be interested.
The Wall Street Journal is reporting the Nissan-Renault interest in Saturn, while Bloomberg says that company may team up with the Penske Automotive Group (rumored yesterday to be an interested party) to take over the brand.
With Nissan struggling worldwide the thought of such a buy seems unlikely and yet it may pave the way for Renault to bring its lineup of fuel-efficient compact cars to North America. Currently the Saturn brand has 400 dealerships in the United States and Canada that could be used to distribute Renault products like the Clio and Megane… or even performance versions like the 250hp 2.0-liter turbocharged Mégane R.S. (shown above).
While French vehicle might not normally be attractive to North American consumers, the Renault brand has a strong awareness with younger consumers due to the Gran Turismo video game series.
Under the latest General Motors viability plan, Saturn is scheduled to be sold by the end of the year.Currently GM says that is has several offers, the most recently publicized ones being from Penske Automotive Group and Telesto Ventures, which would transform the Saturn dealership network into a retail chain selling several brands of foreign-made cars.
Jim Waldron, the owner of a Pontiac dealership in Michigan has revealed that he and a group of investors submitted an offer to buy the scheduled-for-termination Pontiac brand from GM. Waldron made the announcement on ABC’s local WJRT station and said that he expects to hear back from the company this week.
GM representatives, including Communications VP Tom Pyden, have said that the brand is not for sale and that as a part of the company’s new Viability Plan submitted to the U.S. government, Pontiac must be phased-out.
Waldron said that it is possible the communications team does not know of the offer.
As the terms of the offer (and, therefore, the price) are private, it is not clear if the offer is reasonable one. Waldron did say that if the offer is accepted his team would look into purchasing vacant plants and hiring a workforce to start manufacturing Pontiacs.
[Source: ABC - WJRT]
Struggling automaker wants out of joint project with Toyota
With the Pontiac brand gone, GM is looking to get out of its arrangement with Toyota that spawned the Vibe/Matrix models
In stark contrast to official statements by General Motors reps (and to a story we ran yesterday) the struggling U.S. automaker does indeed want out of the joint project with Toyota that saw the creation of the Vibe/Matrix.
Word comes at GMInsideNews reports that it has obtained a list of four of the six plants General Motors plans to shut down or idle as a part of its new viability plan. Included on that list are the Wilmington, Orion and Pontiac plants… as well as the New United Motor Manufacturing Inc. (NUMMI) facility in Fremont, CA.
Just yesterday Pontiac spokesman Jim Hopson stated that GM is in talks with Toyota about the shared NUMMI project and that ideally GM would like to collaborate on another vehicle.
“We’re clearly not backing away from our partnership at NUMMI,” Hopson said. “There’s no issue of us backing away from NUMMI.”
But apparently there is.
GMInsideNews is reporting that their sources say GM wants out of NUMMI entirely. And to stoke the flames of that fire even further the source claims that were GM to go into bankruptcy, its part of the NUMMI facility would wind up in the “BadGM” pile.
As we reported last week, General Motors has indeed made the decision to kill the Pontiac brand. The news comes as a part of a new viability plan (yes… another one) submitted to the federal government today.
The new plan will see Pontiac eliminated by the end of 2010, but that’s not all… not by a long shot. Also included in the new proposal is a long list of drastic and sweeping changes that General Motors says are much needed in order to stay in business. Among the list of big changes is the fast-track dissolution of Saturn. Originally scheduled to be dismantled by the end of 2010, the plan now states that the niche brand will be eliminated by the end of this year.
Also on the chopping block are half of all current U.S. General Motors dealerships. Not surprisingly, GM’s previous viability plan wasn’t pessimistic enough, calling for 34 percent of the current 6,246 dealerships to close. That number is now a solid 50 percent.
Other major cuts include the closing of three plants and the loss of 7,000 more hourly workers. This would put the number of hourly workers at 40,000 – 7,000 less than the last viability plan said there would be and 21,000 less than there were in 2008.
In total GM will cut 14 models from its lineup, with just 34 different vehicles being offered in 2010.
Most importantly, however, is that General Motors will offer current debt holders stock in order to reduce the company’s debt. But if too few debt holders cash in, then GM will go bankrupt. And that is looking quite likely as GM says it needs approximately 90 percent of its unsecured debt covered or else it believe the U.S. Treasury will not see the company as viable.
General Motors still faces the likelihood of filing for Chapter 11 but in the mean time it will run with its new viability plan and concentrate on its core brands: Chevy, Buick, Cadillac and GMC. With just over a month to go before the Obama Administration’s June 1st deadline, however, nothing is really certain. Maybe there will be another viability plan? Maybe more will be cut…
[Source: Automotive News]