Monday

GM slips the toe tag on Pontiac


It’s official – GM announced today that it is discontinuing the Pontiac line.

How Buick survived over Pontiac is beyond me (or Saturn for that matter). But, this is one more step that the General is taking to try to survive as a company.

Their plan also called for a drastic paring down of the dealer network, thousands of more job cuts, and asking bondholders to take 10% of their bond holdings and convert them to company stock.

To me, this sounds like a plan destined to fail. It almost certainly will not pass the bondholder vote (where they need 90% to agree to it). And thanks to state laws you can’t just demand that an auto dealer franchise close. No sir, nothing less than bankruptcy court will get this done quickly and in the timeframe that the General is estimating.

Sounds unfortunate, and it is, but it doesn’t take a genius to read between the lines of their June 1st deadline by the Obama administration and the start of their 9 week shutdown. Methinks they’ll be trying to run this case through the bankruptcy court and get it settled during those nine weeks. Stay tuned.

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