Struggling GM To Drop Pontiac Brand

Struggling automaker GM is expected to scrap its Pontiac brand. GM faces a government-set June 1 deadline to cut its debt, reduce labor costs and take other restructuring steps.

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MICHELE NORRIS, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris. General Motors plans to eliminate its Pontiac division. That's from a source familiar with the company's plan, who spoke with NPR.

Frank Langfitt covers the auto industry, and he joins me now here in the studio.

Frank, why is General Motors making this move?

FRANK LANGFITT: Well, you know, one of the big problems for GM, Michele, is it has too many brands and just too many models. That's very expensive for a company. It also confuses customers. The company right now is on the edge of bankruptcy, and it's got to keep slashing costs.

Now, GM has already said it's going to get rid of Saturn, Hummer, Saab - either discontinue or sell them. And Pontiac was the next most-vulnerable brand. They don't sell a lot of Pontiacs. It's a low-priced car, generally, and the company needs to pare down to be more profitable. Also, certainly, some pressure probably came from the White House because they've been pushing for GM just to become a slimmer company.

NORRIS: They say it's the next most-vulnerable brand, but is the end of Pontiac a surprise? When might GM make an official announcement now that they're talking about it?

LANGFITT: You know, in one sense, it's big news. I mean, this is the end of a famous car name. But anybody who is following Pontiac, now, this isn't a surprise at all. It had already been relegated by GM to what it called a niche brand. If you looked at the product plans in the U.S., nothing beyond 2011. That's a really bad sign for a car division.

As to when, we think maybe Monday we might hear something official on this. Now, also, early in the week, we heard from GM they're going to be temporarily shutting down some plants this summer up to 11 weeks. And in the days and weeks and ahead, we may hear about some permanent closings, especially now that we know that Pontiac is going away.

NORRIS: So, you say not a surprise, but boy, when you look back, Pontiac used to be one of the iconic brands with all those big, muscle cars. So, what went wrong?

LANGFITT: Well, what went wrong, you know, in the '60s and the '70s - you're absolutely right. These were these big engines, big, fast cars, even inspired, you know, GTO inspired a song that - Trans Am was in "Smokey and the Bandit," with Burt Reynolds.

But, you know, the problem is - these references, they're really old. And over time, what happened is tastes changed. People moved towards more fuel-efficient cars. The brand really also got muddied and lost its focus.

Today, you know, if you talk to people, they might have trouble saying, you know, what is the Pontiac image? What's the brand about? In terms of some of the cars that are going to go away, the G8, the G6, that's the sedan, the Solstice, but many of these cars, I don't think that many people know that much about.

NORRIS: Yeah, not since the Trans Am. I mean, you have to go back quite a ways.

LANGFITT: I'm afraid you do.

NORRIS: As the brand disappears, what kind of effect is this going to have on the dealers?

LANGFITT: Well, you know, right now, only 40 dealers exclusively sell Pontiacs, and they won't have anything to sell. But back in the 1990s, GM tried to consolidate a lot of dealerships, so there are a lot now, most of them, over a thousand, that would sell Pontiacs, GMC, the truck brand, and of course Buick, the luxury brand.

So they're certainly going to take a hit on this, but it won't be as bad for most of them. Dealers were also told recently - as recently as two weeks ago, that GMC and Buick will survive. So, those dealers will still have something to sell.

NORRIS: A real blow to Pontiac, Michigan, also.

LANGFITT: Absolutely. I mean, it's very tough up there, anyway. But, you know, to lose theā€¦

NORRIS: Symbolic.

LANGFITT: It - it's the name of the town, absolutely.

NORRIS: Thank you, Frank.

LANGFITT: Happy to do it, Michele.

NORRIS: That was NPR's Frank Langfitt.

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