GM Now Considering Dropping Saab, Pontiac, Saturn and Hummer Brands, Reports Say
By Brendan Moore
GM officials have not yet commented on the report.
GM was rebuffed by government officials last week in their attempts, along with Ford and Chrysler, to secure $25 billion USD in bridge loans for their businesses. GM’s portion of that $25 billion number is approximately $12 billion. Government representatives were not happy with any of the Detroit 3 in the meeting last week, stating that there didn’t seem to be any good plan to exit the hole the car companies are in, and basically told them to regroup and come back later.
The Bloomberg article stated that GM directors are scheduled to review a proposal to shed the brands next week – November 30 and December 1. Lawmakers have scheduled a meeting during the week of December 8 in order to again consider aid to the Detroit automakers, so the dates reported for the GM directors meeting would certainly dovetail with that timeline.
GM has repeatedly stated that it will probably run out of money in early 2009 at their current burn rate and is desperate for federal bailout money. If the discussions regarding the dropping of brands are occurring, it is yet another sign of GM’s growing desperation. Critics of GM have called for reducing brands for years, but with the exception of Oldsmobile earlier this decade, GM has resisted pruning brands. An announcement was made months ago that GM was trying to sell Hummer, but apparently, no buyers have yet raised their hand.
The Bloomberg article cited “people familiar with the plans” in reporting this development, and therefore this could be nothing but a rumor at this point, but the scenario reported could just as easily be accurate. The situation at GM is fluid on a week-to-week basis, depending on just how bad the numbers get.
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