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General Motors to kill Pontiac brand, axe jobs

27 April 2009 17:12 (UTC +04:00)

Baku â€“ APA-Economics. General Motors Corp. will cut an additional 7,000 to 8,000 factory jobs in the United States, kill the Pontiac brand and shed 2,600 dealers by 2010 under a revised business plan developed with the Obama administration and announced today, FREEP reported.
The new job cuts bring the total number of hourly jobs eliminated under GMâ€™s plan to 21,000. GM said additional cuts among salaried workers would be expected, but did not give a specific target.
The plan is part of an offer to bondholders to exchange $27 billion in GM debt for about 10% of a reconstituted GM and a small amount of cash. The automaker warned that should its debt conversion fail, it would file for bankruptcy by June 1.
In addition to the debt offer, GM said, the U.S. Treasury is considering converting 50% of its loans to the company into GM stock. Combined with a similar request to the UAW for converting half of the $20 billion owed to a retiree health-care trust to shares, the plan envisions the government and the union being the largest shareholders of the automaker.
If successful, the plan would cut GMâ€™s total debt by $44 billion.
President Obamaâ€™s auto task force said today that GMâ€™s offer was an â€œimportant step.â€
â€œWe will continue to work with GM’s management as it refines and finalizes this plan and with all of GM’s stakeholders to help GM restructure consistent with the presidentâ€™s commitment to a strong, vibrant American auto industry,â€ the task force said in a statement.
GM said it now expects it will need $27 billion in total from the Treasury to withstand the recession, including the $15.4 billion it’s already received.
As it had indicated earlier this month, GM now plans to close 13 plants by 2010 and an additional five plants by 2012.
GM Chief Executive Officer Fritz Henderson said the Pontiac brand would be closed by 2010, calling it an â€œextremely personal decision.â€ In addition to speeding up decisions on Saturn, Saab and Hummer, GM will be left with four brands â€“ Chevrolet, Buick, GMC and Cadillac.