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GM to announce brand changes, restructuring moves; UAW, Chrysler and Fiat reach concessions deal


Updated: 04/26/2009 06:44:30 PM PDT

DETROIT (AP) — General Motors will announce details of its massive restructuring plan today, including the demise of its storied Pontiac brand, more factory closures and bigger job cuts as it fights to avoid bankruptcy protection.

The struggling automaker must make the announcement in advance of a planned offer to its bondholders to swap debt for company stock. GM owes $28 billion to large and small bondholders, and under Securities and Exchange Commission rules, it must disclose its operational plans before making an exchange offer.

Two people briefed on GM's plan said the company has decided to close more factories than the five it announced in February. But the locations of the doomed factories will not be identified today, said the people, who asked not to be identified because the plan has not yet been made public.


One of the people said GM will list specific numbers of blue-collar job cuts, and announce another round of U.S. salaried job cuts beyond the 3,400 completed last week.

Both people confirmed that the plan includes the death of Pontiac, famous for the Trans Am sports car and the GTO. Efforts in the past few years to market Pontiac as performance-oriented brand failed to work. The company had said it wanted to keep Pontiac as a niche brand with one or two models, but is buckling under tremendous government pressure to consolidate its eight brands, several of which lose money.

The people said GM won't have
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much new information on Hummer, Saturn or other brands, including Europe's Opel. GM has indicated it wants to focus on four core brands, Chevrolet, Cadillac, GMC and Buick.

Meanwhile on Sunday, Chrysler cleared another major obstacle to its survival when it reached a tentative deal for concessions with the United Auto Workers union.

Chrysler is just days from a Thursday U.S. government deadline to gain concessions from its unions and debtholders and form an alliance with Italy's Fiat Group SpA or face almost certain liquidation.

The UAW announced the deal in a news release Sunday night, calling the concessions painful but saying the deal takes advantage of the Obama administration giving Chrysler and its workers a second chance.

The administration in February rejected Chrysler's restructuring plan and said it could not stand on its own. The government gave the Auburn Hills, Mich., automaker until April 30 to make further cuts and ink a deal with Fiat.

The UAW deal is seen as a key piece of pulling Chrysler's plan together, and it's noteworthy that the UAW said Fiat was involved in the deal.

"The provisional agreement provides the framework needed to ensure manufacturing competitieness and helps to meet the guidelines set forth by the U.S. Treasury Department," Chrysler Vice President of Labor Relations Al Iacobelli said in a statement. "As a result, Chrysler LLC can continue to pursue a partnership with Fiat SpA."

Chrysler has been living on $4 billion in U.S. government loans and is expected to get another $500 million. Without government help, it would have gone out of business around the first of the year.

LINK:http://www.mercurynews.com/politics/ci_12233967
 
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