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GM May Kill Pontiac, GMC Brands

Posted: Apr 16, 2009 10:03 a.m.

As General Motors approaches an Obama administration deadline to restructure or face withdrawal of federal funding, the automaker may consider cutting some brands it had previously planned to save.

The Detroit Free Press reports, "General Motors may drop its Pontiac and GMC brands to help it cut costs, people familiar with the discussions said." In previous recovery plans, the automaker had proposed "to shed only Hummer, Saab and Saturn...But now Pontiac and GMC are being studied as part of talks with an Obama administration task force assessing whether GM can be restructured without bankruptcy."

Reuters adds, "GM's Chevrolet, Cadillac and Buick brands are likely to be safe."

Previous reports had indicated that Pontiac was "destined to be downsized to one or two models to be sold through the GMC/Buick dealer network," according to Business Week. The brand's new G8 large sedan has been a critical success, and reports said that GM was looking for ways to preserve the model's sales potential - but faced with a June 1 deadline, the company may decide that improving its position in the rear-wheel drive large sedan market isn't a priority. "Pontiac, analysts say, is not a saleable asset because the brand can't really survive outside the GM system," According to Business Week.

"GMC has a better chance of surviving than Pontiac," says Bloomberg. "GMC sells only light trucks such as the Sierra pickup, while Pontiac's offerings include the descendants of the brand's high-performance models from the 1960s and 1970s."

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