GM Said to Study Shedding Saturn, Saab, Pontiac to Win U.S. Aid

December 24, 2008

General Motors is hard at work trying to reduce costs in order to win the $12 billion in federal loans. One example of the company’s activity includes a study to consider the discontinuation of brands like Pontiac, Saturn, Saab, and Hummer.

According to this study, if the company were to sell or drop the brands they would clearly save a significant amount of money and help to reduce overlap. This measure could be a blessing to the ailing car manufacturer, which is trying to keep itself from total collapse. That being said, not decision has been made by GM over whether to go through with its brand shedding measures.

The plan will be presented to Congress on December 2 to provide support to GM’s capacity to repay federal aid, should it be awarded. GM is also searching for means to reduce its debt levels and lower costs on both active and retired union workers.

General Motors CEO Rick Wagoner has been placed under a strict deadline by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. The Congress’s hearing is scheduled for December 5 to discuss the $25 billion rescue plan with a vote possible by the 8th.

Meanwhile, the automaker has remained busy working on documentation that will provide more details regarding the entire plan. General Motors stated back on November 7 that it would possibly lack the minimum cash funds in order to maintain operations and pay monthly bills on time.

General Motors currently has a large number of dealerships that will be seriously affected by any decisions to discontinue brands. Recent figures show that there are 1,071 outlets selling Pontiacs, 400 for the Saturn brand, and a modest 105 for Saab. These numbers are included in the more than six thousand dealers currently in operation in the United States.