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Holden loses Pontiac G8 export deal
Holden's G8 export deal axed as GM announces plan to kill off Pontiac
28 Apr 2009
HOLDEN has lost a lucrative export deal to the US overnight, with General Motors announcing it will drop the Commodore-based Pontiac G8 by the end of this year.
The news came in General Motors' revised plan to stave off bankruptcy, with deeper cuts and the death of the 83-year-old Pontiac brand by 2010.
Asked what such a move would mean for Holden, new GM president and CEO Fritz Henderson said exports would soon cease.
“Our decision would result in the phase-out of the G8 from the Australian operation,” he said.
Mr Henderson said GM would work with its US dealers to sell the inventory and anticipated production would be phased out by the end of the year.
He added that there was nothing wrong with the car.
“It is, in many ways, a very fine car, but we are just not able to put the marketing resources behind it,” Mr Henderson said.
Left: GM CEO Fritz Henderson.
The announcement comes just weeks after Pontiac announced the best G8 monthly sales result so far, with 2939 sold in March, on the back of a relatively strong February result.
While Holden said it expected to export 30,000 G8s to the US when it announced the deal in 2007, the G8 got-off to a slow start, despite rave reviews.
Its average monthly sales for the last six months of 2008 stand at just 1455, well below the initial monthly target of 2500.
The loss of the G8 sedan export comes four months after Holden confirmed a program to export the Holden Ute to the US as a Pontiac had also been cancelled.
GM also announced overnight that it would sell or phase out Saturn, Hummer and Saab by the end of 2009.
It has also said it would slash 21,000 American jobs by 2010, which is 7000 more than it pledged to axe in its initial viability plan.
Mr Henderson also announced GM would cut its dealer network from 6246 in 2008 to 3605 by the end of 2010.
GM requires the US government to approve its latest plan, in which it proposes to swap about $US27 billion ($A38.1 billion) in bond debt for GM stock, by June 1 if it is to avoid bankruptcy.
GM’s plan requires about 90 per cent of bond holders to exchange their debt for equity, and some US analysts have already suggested this is unlikely.
If accepted, the new deal would see the UAW healthcare trust and US government own 89 per cent of GM stock.
Mr Henderson would not provide exact numbers but said the government would end up with more than 50 per cent of the stock in exchange for cancelling half its loans to the company, a move that would wipe off $10 billion in debt.
While Mr Henderson was optimistic the deal would be accepted, he acknowledged that GM was more likely to file bankruptcy that it was a few weeks ago.
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