RIP Pontiac

29th April 2009

General Motors announced this week that Pontiac will cease operations by next year. This had been rumored for at least several days, and GM’s only comment was, “Contrary to media speculation, General Motors has not announced any changes to its long-term viability plan or to the future status of any of its brands…” This wasn’t a denial either. With the announcement to kill Pontiac, it sure seems that the cynics who said GM now stands for “Government Motors” were right. GM was under intense pressure from the feds to make drastic changes (cut more brands, cut dealerships, etc.), as the government needed to be able to show the public that they were playing hardball with GM, that they were doing everything they could to protect the taxpayers’ investment in GM. In Washington, this means you need a headline, not necessarily a plan that will work.

Susan Docherty, VP of Buick-Pontiac-GMC, made the following statement:

“Anyone who has been associated with the Pontiac brand knows that this was a difficult decision. Pontiac has had a rich and storied history, but unfortunately, despite the efforts of all concerned, the brand has been unprofitable over the past several years. We had hoped in our February 17 Viability Plan to convert Pontiac to a niche brand within the Buick-Pontiac-GMC channel.

However, the Viability Plan as submitted was not acceptable. GM was further challenged to take more significant restructuring actions which would allow the company to be viable even in these unprecedented market conditions and in any future cyclical market downturns. These restructuring actions require further sacrifice by all stakeholders: GM employees, suppliers, investors and dealers.

As part of these renewed restructuring efforts, we spent considerable time formulating Pontiac portfolio scenarios that would allow the brand to be sustainable and profitable long term. Unfortunately after careful evaluation, none of these scenarios proved viable.

Therefore, GM is announcing the phase out of the Pontiac brand by year end 2010. This action will allow General Motors to devote its limited capital and other resources to GM’s four core brands: Chevrolet, Cadillac, Buick and GMC.”

GM’s plan for Pontiac from their February Viability Plan was to reduce the Pontiac product lineup and make Pontiac more of a niche brand. This made perfect sense. Pontiac was most successful when it was the “excitement” division within GM. GTOs, Firebirds, Solstice and the G8 make sense for Pontiac; Trans Sports, Aztecs, Torrents and the G3 don’t.

Pontiac is no longer a stand-alone division, so it doesn’t need a full lineup of various types of vehicles to make the brand “viable.” There are only 35 dealers in the US that sell only Pontiacs. Pontiacs are now sold almost exclusively through Buick/Pontiac/GMC dealers. This strategy made sense, as those 3 brands all have very different images and would have allowed all of the dealers to have a full line of cars and trucks without the General having to produce copy-cat cars to keep 3 sales channels viable. Done properly, these 3 brands together would not overlap with Chevrolet or Cadillac either.

So Pontiac doesn’t have its own sales channel to support, doesn’t have its own engineering staff (that went away 25+ years ago) or its own manufacturing facilities (ditto). It doesn’t even have its own management, as Susan Docherty is the VP of Buick-Pontiac-GMC. Maybe I’m just being dense, but where is the benefit of killing off Pontiac? Pontiac is a brand that has had some trouble remembering its identity, but so have others. It has a great history, and if properly nurtured as a niche brand, it could have not only survived, it could have thrived.

RIP Pontiac. Some of us will miss you.