General Motors' Brave New World: Only Four Brands Will Survive
General Motors' core brand portfolio will shrink from eight to four by 2012, according to the ambitious restructuring plan the automaker laid out for lawmakers on Tuesday. The surviving brands would be Buick, Cadillac, Chevrolet and GMC.
"Pontiac will be a specialty brand with reduced product offerings within the Buick-Pontiac-GMC channel," said General Motors in a statement. "GM will immediately undertake a global strategic review of the Saab brand. As part of the plan, the company also will accelerate discussions with Saturn retailers, consistent with their unique relationship, to explore alternatives for the Saturn brand."
GM has been shopping its Hummer brand since June.
The automaker said it needs $4 billion in federal loans by the end of December to stay in business. The automaker is requesting term loans of up to $12 billion from the government to "provide adequate liquidity levels through December 31, 2009." It is also requesting a $6 billion line of credit "to provide liquidity should a severe market downturn persist," it said. The automaker said it would begin repaying the loans by 2011.
While insisting it will remain "a full-line manufacturer," GM said it will substantially change its product mix over the next four years and "launch predominantly high-mileage, energy-efficient cars and crossovers."
It said it will invest about $2.9 billion in alternative fuels and advanced propulsion technologies during 2009-'12, including plug-in electrics, gasoline-electric hybrids and fuel cells.
GM chairman and CEO Rick Wagoner has also agreed to accept a salary of $1 next year as part of the restructuring. Wagoner received a $1.6 million salary and $12.8 million in other compensation last year.
Inside Line says: If GM survives, it will be a shadow of its former self with a drastically reduced product portfolio. - Anita Lienert, Correspondent