GM Ready To Scrap Pontiac Brand The struggling automaker General Motors 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.
NPR logo GM Ready To Scrap Pontiac Brand

GM Ready To Scrap Pontiac Brand

NPR's Frank Langfitt And Michele Norris Discuss GM's Latest Move

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The struggling automaker General Motors is expected to eliminate its iconic Pontiac brand, NPR has learned.

An official announcement could come as early as Monday, according to NPR's Frank Langfitt.

"This is the end of a famous car name," Langfitt said on Friday's All Things Considered. "But for anyone who has been following Pontiac, it's not a surprise at all."

GM is living on more than $15 billion in government loans and faces a June 1 deadline to cut its debt, reduce labor costs and take other restructuring steps. If it doesn't meet the deadline, the company's CEO has said it will enter Chapter 11 bankruptcy protection.

The move follows GM's decision to shed other brands, including Saturn and the Hummer line of sport-utility vehicles.

GM knows it has "too many brands and too many models," Langfitt says.

GM said Thursday it will temporarily close 13 assembly plants in the U.S. and Mexico — some for more than two months — laying off nearly 24,000 workers to pare back a bloated inventory.

"In the days and weeks ahead we may hear about some permanent closings," Langfitt says.

The announced closures, which will start in May, vary by factory from as short as three weeks to a long as 11, including the normal two-week July shutdown to change from one model year to the next.

GM said the shutdowns will help control high dealer inventories and bring manufacturing in line with sales. The company plans to cut production by 190,000 vehicles and reduce inventory from the current 767,000 to 525,000 by the end of July.

As for Pontiac, about 40 dealers who sell the brand exclusively will be hit hard by the news, Langfitt says. More than 1,000 dealers sell Pontiac along with other brands.

In eliminating Pontiac, GM is closing out a famous muscle-car brand memorialized in at least one rock song and in films such as Smokey and the Bandit.

Langfitt says dealers were told as recently as two weeks ago that Buick and the GMC truck line will survive.

Meanwhile, the summer plant closings will affect about 24,000 hourly and salaried employees at the affected assembly plants, but there will be thousands more layoffs and temporary factory closures when GM works out its schedules for engine, transmission and parts stamping factories.

The troubled automaker has 22 assembly plants in North America as well as dozens of other parts and powertrain factories.

Laid-off hourly workers will get unemployment benefits and supplemental pay from the company that amounts to most of their base wages. Salaried workers also will get some income, GM North America President Troy Clarke said Thursday in a conference call with reporters.

From NPR reports and The Associated Press