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[Updated] Pontiac Officially Dead in 2010 as of 04/27/2009

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I didn't say it, they did. Click Here.


FOR RELEASE: 2009-04-27

GM Accelerates its Reinvention as a Leaner, More Viable Company

Updated Viability Plan Speeds, Deepens Restructuring of U.S. Operations

DETROIT -- General Motors (NYSE: GM) today presented an updated Viability Plan that will speed the reinvention of GM's U.S. operations into a leaner, more customer-focused, and more cost-competitive automaker.

The Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.

Revised Viability Plan goes further and faster

The Viability Plan announced today builds on the February 17 Viability Plan submitted to the U.S. Treasury. http://media.gm.com/servlet/GatewayServlet...amp;docid=52168. The revised Plan accelerates the timeline for a number of important actions and makes deeper cuts in several key areas of GM's operations, with the objective to make us a leaner, faster, and more customer-focused organization going forward.

Significant changes include:

* A focus on four core brands in the U.S. - Chevrolet, Cadillac, Buick and GMC - with fewer nameplates and a more competitive level of marketing support per brand.

* A more aggressive restructuring of GM's U.S. dealer organization to better focus dealer resources for improved sales and customer service.

* Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.

* Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a U.S. total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.

"We are taking tough but necessary actions that are critical to GM's long-term viability," said Fritz Henderson, GM president and CEO. "Our responsibility is clear - to secure GM's future - and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team."

Fewer U.S. brands, nameplates, and dealers

As part of the revised Viability Plan and the need to move faster and further, GM in the U.S. will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC. The Pontiac brand will be phased out by the end of 2010. GM will offer a total of 34 nameplates in 2010, a reduction of 29 percent from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries. This four-brand strategy will enable GM to better focus its new product development programs and provide more competitive levels of market support.

The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest. Updates on these brands will be provided as these initiatives progress.

Working with its dealers, GM anticipates reducing its U.S. dealer count from 6,246 in 2008 to 3,605 by the end of 2010, a reduction of 42 percent. This is a further reduction of 500 dealers, and four years sooner, than in the February 17 Plan. The goal is to accomplish this reduction in an orderly, cost-effective, and customer-focused way. This reduction in U.S. dealers will allow for a more competitive dealer network and higher sales effectiveness in all markets. More details on these initiatives will be provided in May.

Sales volume and market share projections

The Viability Plan anticipates improved financial results despite more conservative U.S. sales volume expectations going forward. The lower volume expectations are the result of managing the business with fewer nameplates and dealers, leaner inventories, and reduced market share. To address the inventory issue, GM on April 23 announced U.S. production schedule reductions of approximately 190,000 vehicles during the second and early third quarters of 2009.

The Viability Plan also reduces GM's market share projections to adjust for the impact of the brand and dealer consolidation, as well as for the short-term impact of speculation regarding a GM bankruptcy. The plan assumes a 19.5 percent share in 2009, with share stabilizing in the 18.4 to 18.9 percent range in subsequent years.

"We have strong new product coming for our four core brands: the Chevrolet Camaro, Equinox, Cruze and Volt; Buick LaCrosse; GMC Terrain; and Cadillac SRX and CTS Sport Wagon and Coupe," said Henderson. "A tighter focus by GM and its dealers will help give these products the capital investment, marketing and advertising support they need to be truly successful."

Lower structural costs, lower breakeven point

The Viability Plan also lowers GMNA's breakeven volume to a U.S. annual industry volume of 10 million total vehicles, based on the pricing and share assumptions in the plan. This lower breakeven point (at an adjusted EBIT level) 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 in its March 30 viability plan assessment.

GM will lower its breakeven point by cutting its structural costs faster and deeper than had previously been planned:

* Manufacturing: Consistent with the mandate to accelerate restructuring, we plan to reduce the total number of assembly, powertrain, and stamping plants in the U.S. from 47 in 2008 to 34 by the end of 2010, a reduction of 28 percent, and to 31 by 2012. This would reflect the acceleration of six plant idling/closures from the February 17 plan, and one additional plant idling. Throughout this transition, GM will continue to implement its flexible global manufacturing strategy (GMS), which allows multiple body styles and architectures to be built in one plant. This enables GM to use its capital more efficiently, increase capacity utilization, and respond more quickly to market shifts.

* Employment: U.S. hourly employment levels are projected to be reduced from about 61,000 in 2008 to 40,000 in 2010, a 34 percent reduction, and level off at about 38,000 starting in 2011. This further planned reduction of an additional 7,000 to 8,000 employees from the February 17 Plan is primarily the result of the previously discussed operational efficiencies, nameplate reductions, and plant closings. GM also anticipates a further decline in salaried and executive employment as it continues to assess its structure and execute the Viability Plan. More details will be announced as soon as they are finalized with the various stakeholders.

* Labor costs: The Viability Plan assumes a reduction of U.S. hourly labor costs from $7.6 billion in 2008 to $5 billion in 2010, a 34 percent reduction. GM will continue to work with its UAW partners to accomplish this through a reduction in total U.S. hourly employment as well as through modifications in the collective bargaining agreement.

As a result of these and other actions, GMNA's structural costs are projected to decline 25 percent, from $30.8 billion in 2008 to $23.2 billion in 2010, a further decline of $1.8 billion by 2010 versus the February 17 Plan.

Strengthening GM's balance sheet

Another key element of GM's restructuring will be taking the necessary actions to strengthen its balance sheet. GM today took an important step in improving its balance sheet by launching a bond exchange offer for approximately $27 billion of its unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity.

"A stronger balance sheet would free the company to invest in the products and technologies of the future," Henderson said. "It will also help provide stability and security to our customers, our dealers, our employees, and our suppliers."

Another important part of improving the balance sheet will be the ongoing discussions with the UAW to modify the terms of the Voluntary Employee Benefit Association (VEBA), and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50 percent of GM's outstanding U.S. Treasury debt at June 1, 2009, and at least 50 percent of GM's future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions.

In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction.

Throughout the Plan, GM will continue to make significant investment in future products and new technologies, with an investment of $5.4 billion in 2009, and investments ranging from $5.3 to $6.7 billion from 2010 to 2014. Very importantly, development and testing of the Chevy Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.

"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. "We appreciate their support and direction. 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."

# # #

About GM - General Motors Corp. (NYSE: GM), one of the world's largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 243,000 people in every major region of the world, and sells and services vehicles in some 140 countries. In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.

Forward-Looking Statements - In this press release and in related comments by our management, our use of the words "plan," "expect," "anticipate," "ensure," "promote," "believe," "improve," "intend," "enable," "continue," "will," "may," "would," "could," "should," "project," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to comply with the requirements of our credit agreement with the U.S. Treasury; our ability to execute the restructuring plans that we have disclosed, our ability to maintain adequate liquidity and financing sources and an appropriate level of debt; the ability of our foreign subsidiaries to restructure and receive financial support from their local governments or other sources; our ability to restore consumers' confidence in our viability and to continue to attract customers, particularly for our new products; our ability to sell, spin-off or phase out some of our brands, to manage the distribution channels for our products, and to complete other planned asset sales; and the overall strength and stability of general economic conditions and of the automotive industry, both in the U.S. and globally.

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Car is dead (apparently)


I'm over it... I've watched GM f@#k everything up my entire life... Looks like the "new GM" will be no different.

Anyone want to take bets as to how long Buick lasts or how long until Obama and his minions assassinate GMC?

Obama and his "minions" are the only thing that has kept GM even functioning. Your anger is all over the place.

Edited by FloydHendershot
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Too much damage too little money.

Even in niche status it is a little too late. Lets face it GM has too little money to even do Niche right.

I think you will see little outrage from the non Pontiac public. That is very sad!

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Still speculation at this point. Y'all know my feelings on the issue. No need to repeat them.


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Obama and his "minions" are the only thing that has kept GM even functioning. Your anger is all over the place.

Read the news lately?

I'm only commenting on what I'm 'told'.

And damn right I'm angry... There is no reason for the stupidity that this company has displayed for the better part of 5 years. And there is no reason for the continued stupidity that our government officials (affiliation doesn't matter, they're all just as ignorant as the next guy) continue to exhibit.

A GLOBAL manufacturing force that actually benefits america is crumbling, yet they don't seem to care. Have fun working at Walmart or McDonalds. That looks to be our future!

Edited by FUTURE_OF_GM
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Too much damage too little money.

Even in niche status it is a little too late. Lets face it GM has too little money to even do Niche right.

I think you will see little outrage from the non Pontiac public. That is very sad!

In a society in which 60% of population wishes for the failure of the automakers?!?! I'd say that's not sad, it's par for the course. Or a cause for celebration (for some)

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Pardon my language, but aside from jobs, the economy, and all that, what is really left of GM for me to care about?

Everything that has been any good lately has been killed early or cancelled entirely.

I suppose that I no longer care what happens to GM, and even though I still root for Chrysler, if they don't do something "magic" I'll no longer care for them either.

It's a sad, sad day.

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The writing has been on the wall since before GM went to the government for aid.

You got it-that is what I have been saying for months..and it sucks!

For those who are actually car lovers, these next years will be very hard to take.

A rough guess would say about 16 models will not see the end of this decade.

This is just the beginning of the nasty......

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I think that without an albeit more streamlined, but still existent, Pontiac line, the GM stable becomes weak. That "segment" is not anchored.

Growing up, Pontiac was always equated with provocative. The earlier Firebirds and Grand Prixs were very popular and well-received cars. Movies always "cast" Pontiacs as cool cars. What happened?. People got "too cool" and graduated to Japanese and German iron. I say that with a smirk.

The signature Pontiac snout, alongside that of Cadillac, was probably the most recognizable in GM and possibly of all American-made cars. I, too, think that this division is more likely to be axed than the others. They will need to add a model to Chevy or Buick somewhere down the line, so this will free up some "room." Thus, within a decade, I've watched my 2 favorite car brands of my childhood - Oldsmobile and Pontiac - disappear. I'll never forget the Oldsmobile announcement...it came a few weeks before Christmas 2000 and too close to my birthday. It sent a shudder through me. It was like a "quick erase" of all my childhood memories and stories. I was entertaining buying a new Intrigue at the time.

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This was one of those things that has seemed inevitable the last few years, GM has largely ignored Pontiac and invested very little in it. GM may end up just Chevy and Cadillac before all is said and done.

The market has moved such that it seems difficult for automakers to have middle brands between their entry-mainstream and premium brands. Mercury seems barely there; Plymouth went away and Dodge moved down sort of. And in the US, Toyota, Honda, Nissan, VW etc have no middle brands--just broad mass-market brands and premium ones that start at the top of the mainstream ones.

Oh well...what will be, will be.

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Read the news lately?

I'm only commenting on what I'm 'told'.

And damn right I'm angry... There is no reason for the stupidity that this company has displayed for the better part of 5 years. And there is no reason for the continued stupidity that our government officials (affiliation doesn't matter, they're all just as ignorant as the next guy) continue to exhibit.

A GLOBAL manufacturing force that actually benefits america is crumbling, yet they don't seem to care. Have fun working at Walmart or McDonalds. That looks to be our future!

If "they" did not care there would be no loans in the first place. GM had their hands out in need of a partner to keep them functioning and the US Gov't agreed to that with conditions. Conditions to prove they can remain intact as a Global manufacturing force. This may be GM's response to meet those criteria. There just may not be another way presuming this is even true and not some internet bologna.

I don't think the gov't or GM wants to close factories for longer than the usual two weeks but they are and will. I don't think the government wants to think what the cost of rampant unemployment and welfare checks would mean either. To say nothing of Toyota and what crumbling satelite companies including parts companies would like to happen. It is in all concerned best interest to get this right. It may not be your or my cup of tea but there is a bottom line and tough times call for these kinds of decisions.

It's too bad once they got one foot out of the grave the other was on a banana peel.

Edited by FloydHendershot
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