GM delivers more viable Viability Plan; Pontiac cut

General Motors today shared modifications to its February 17th Viability Plan that was rejected by President Obama and his automotive task force. Among the changes, the Pontiac division will be discontinued, GM dealer body further reduced, and business plans revised to address an even smaller U.S. marketplace of about 10 million vehicles.

Both GM and Chrysler were challenged by the government to move more aggressively to ensure their long-term viability and thereby qualify for continued federal aid. (Read: "GM, Chrysler submit bailout plans to Congress.") Chrysler has been struggling with union challenges, though has made progress on multiple fronts, as it stares down its upcoming May 1st deadline. GM had 30 more days to get its larger house in order.
 
The core strategy from GM has the automaker choosing four core brands on which to focus: Buick, Cadillac, Chevrolet, and GMC. The Pontiac division will be phased out by the end of 2010. In addition, GM will also cull Hummer, Saab, and Saturn from its brand herd by the end of 2009. (Read: "Is GMC a core brand?")

With these moves, GM will offer 34 nameplates in 2010, down from 48 in 2008. In doing so, the automaker will focus product development and support on fewer models, ultimately revising its business model as much as its car portfolio.

Likewise, the dealer count will be cut down from 6,246 in 2008 to 3,605 by the end of 2010—a swifter reduction than outlined in the previous plan.

Combined with its financial initiatives and supply corrections through idling plants, GM is taking significant steps to save the business and prepare for better days. We hope they come.

For consumers, having a clearer picture of what GM plans for its divisions can inform purchase decisions, though the true fate for Hummer, Saab, and Saturn is not yet known.

We will continue to monitor this fast-moving story, reporting here in the Cars blog and also updating advice and news on the Auto Crisis hub.

Read:
What happens if an automaker goes bankrupt?
What if my dealer goes out of business?
How can I protect myself from a failing dealership?

—Jeff Bartlett