GM will cut 21,000 factory jobs

One of Utah's largest auto dealers says that General Motors Corp.'s plan to discontinue the Pontiac brand may be the best thing for the carmaker in the long run.

Jerry Seiner, owner of the Jerry Seiner Dealerships, which specialize in General Motors vehicles, told the Deseret News on Monday that the decision of the company to eliminate Pontiac and three other brands from its brand portfolio will allow the auto maker to meet the needs of consumers in a more streamlined fashion

GM laid out a massive restructuring plan Monday that will cut 21,000 U.S. factory jobs by next year and phase out the storied Pontiac brand. The company could be majority owned by the federal government the plan.

Seiner said that General Motors will maintain four core brands — Buick, Cadillac, Chevrolet and GMC — while phasing out Hummer, Saab, Saturn and Pontiac. By focusing on four main nameplates, General Motors will be able to meet customer demand with much more efficiency, he said.

"When you're selling cars in a year that you're selling 9 to 10 million instead of 16 to 17, you've got to cut back someplace," Seiner said. "There's not enough market for General Motors to be selling 55 to 60 models over eight brands."

He said that by contracting its brand base, General Motors will gain the ability to become "a little bit of a smaller company, but a good company and a profitable company…and we'll do OK representing them."

Seiner noted that top import auto manufacturers like Toyota are suffering, as well, with Japan's largest carmaker experiencing sales declines of 50 percent in northern Utah during the first quarter of 2009.

He added that the move to discontinue a brand is not unprecedented, and history has shown that consumers learn to adjust.

"These brands do change from time to time and there is always a little bit of a mourning period over it," he said. "The buyer who wants to buy from General Motors will be able to find something similar within those four core brands."

The plan announced Monday, which includes an offer to swap roughly $27 billion in bond debt for GM stock, would leave current shareholders holding just 1 percent of the century-old company, which is fighting for its life in the worst auto sales climate in 27 years.

GM is living on $15.4 billion in government loans and said Monday in a filing with the U.S. Securities and Exchange Commission that it envisions receiving an additional $11.6 billion. But if GM's restructuring plan can't satisfy the government by June 1, the struggling company could go into bankruptcy protection.