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Anne Davies, Washington
April 28, 2009 – 6:50AM

Holden Australia has been dealt a blow with parent General Motors confirming that it will scrap the Pontiac brand including the Pontiac G8 which is built in the Elizabeth plant near Adelaide.

Sold as the VE Commodore in Australia, Holden arm had planned to export 30,000 of the high performance cars to the US.

The move, part of sweeping cuts contained in GM’s second viability plan, will mean the loss of nearly $1 billion in exports for Holden, which had invested $77 million to gear up for the shipments.

The cuts are the latest bid by GM to avoid bankruptcy as the car maker struggles to cope with a drop of almost half in its US sales, and other markets retreat. It has already received $US15.4 billion ($21.4 billion) in loans from the US Government.

GM’s plan, the result of pressure from the Obama Administration to further trim GM’s operations, will mean another 7000 to 8,000 jobs to go on top of the 23,000 already announced.

GM also plans to close 43% of its dealerships by 2010 and shutter another 13 of its existing 47 plants which will have a big impact across American towns .

The plan also involves converting lenders’ interests into equity, which could result in the US Government owning as much as 50% of the company and the United Auto Workers union holding 39%.

The bond holders have been offered 22 cents in the dollar to convert their GM debt into equity, but it is uncertain whether they will accept the offer. If not, bankruptcy is still an option and a filing with the Securities and Exchange Commission outlined plans for this eventuality.

Speaking to reporters, GM chief executive, Fritz Henderson expressed sadness in the demise of the 90-year old Pontiac brand by no later than 2010.

”This is a brand which has a considerable heritage in our company, and this is an intensely personal decision in many ways,” he said.

There had been talk that Holden’s G8/VE Commodore may be sold as a stand-alone Pontiac performance model at other GM dealerships to keep the division’s name alive but that idea did not survive the latest round of pruning.

http://business.brisbanetimes.com.au/business/holden-hit-by-gms-cutbacks-20090428-akva.html

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