Official: Pontiac will be phased out by GM

Article by Christian Andrei, on August 26, 2010

According to a recent press statement concerning the updating of its feasibility, General Motors has substantiated speculations that came out the previous week that it will indeed phase out the Pontiac. GM says that Pontiac will be totally phased out by the end of next year, as part of its plan to cut down its nameplates to 34 by 2010, down from a total of 48 nameplates it offered in 2008, a loss of nearly one-third. 

Pontiac will still have a year, but the other three brands, Saab, Saturn and Hummer, are not so lucky since they will be taken care of this year. GM's revised plan will see the resolution of these three brands by the end of this year at the latest and it promises to provide updates as these initiatives develop. 

On the other hand, GM claims a horde of new products coming from its four core brands, namely, the Chevrolet Camaro, Equinox, Cruze and Volt; Buick LaCrosse; GMC Terrain; and Cadillac SRX and CTS Sport Wagon and Coupe. The widely-talked about speeding up of dealership closedowns has also been confirmed, with 3605 planned to be closed down from a total of 6246 locations counted in 2008.

The carmaker looks at a tighter focus by itself and its dealers as the source of these products' capital investment, marketing and advertising support that they require to be really successful.

Furthermore, the carmaker will also reduce its breakeven volume point to 10 million units by cutting down the number of factories from 47 in 2008 down to 34 by the end of next year, lay off an extra 7000 to 8000 North American workers above the cuts required in the February viability plan, and cut down on labor costs from $7.6 billion in 2008 to $5 billion for next year.

Pontiac's planned demise came at a time when it was just starting to live up to its image as the "performance brand" with products like the Solstice and G8. Pontiac might still be able to convince top officials that it is worth keeping and it has one year to accomplish just that.

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