Cash-strapped GM ponders shedding brands

In preparing a cost-cutting plan, General Motors is reportedly considering dropping the Saturn, Saab, and Pontiac brands. (David Zalubowski/Associated Press)

SOUTHFIELD, Mich. - General Motors Corp., working to cut costs to win $12 billion in government loans, is studying whether to shed its Saturn, Saab, and Pontiac brands in addition to Hummer, people familiar with the matter said.

Selling or dropping brands would save money and reduce overlap as the biggest US automaker struggles to avoid running out of operating cash by year's end, said the people, who didn't want to be identified because no decision has been made. GM's other US brands are Chevrolet, GMC, Buick, and Cadillac.

The review of the 82-year-old Pontiac division, one of GM's earliest, shows the scope of the survival plan being given to Congress on Tuesday to show GM can repay federal aid. GM also seeks to cut debt levels and reduce costs for active and retired union workers, people have said.

Chief executive Rick Wagoner is under a deadline set by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. Congress has scheduled a Dec. 5 hearing on a $25 billion auto-industry rescue and may vote the week of Dec. 8.

A GM spokesman, Steve Harris, declined to comment on what may be included in the Detroit-based automaker's plan.

Directors are scheduled to review a proposal Sunday and Monday, people familiar with the plans said. The automaker will prepare a 10- to 12-page public document and a private, more detailed plan with background material, the people said.

Members of Congress have suggested the automakers might benefit from being able to shed some of their dealers.

GM's eight US brands are the most among the domestic automakers, compared with four at Ford Motor Co. and three at Chrysler LLC. The Hummer sport-utility vehicle unit was put on the block in June. GM agreed to eliminate the 103-year-old Oldsmobile brand in 2000 because of declining sales.

GM has 1,071 outlets for Pontiac, 400 for Saturn, and about 105 for Saab among its 6,400 dealers, said Susan Garontakos, a spokeswoman. GM has been trying to combine Cadillac/Hummer/Saab and Pontiac/Buick/GMC brands into consolidated dealerships that would benefit from greater sales and lower marketing costs.

GM, which turned 100 this year, established the Pontiac division in 1926. The brand's sales peaked at 896,980 in 1978, according to Automotive News. That was the year GM sold 9.55 million vehicles worldwide, the highest ever, and came at the end of an era when Pontiac attracted notice for sports coupes such as the Firebird.

This year, Pontiac sales are down 21 percent, compared with a 15 percent industrywide decline through October.

GM established the Saturn brand in 1985, five years before selling the first vehicle. Most of the US dealers are stand alone, according to GM. Sales reached a peak in 1994 at 286,003 units, according to Autodata Corp. This year's deliveries are down 19 percent.

GM made its initial investment in Sweden's Saab in 1990 and took full control in 2000. Its sales climbed to a record 47,914 in 2003. In 2008, they're down 31 percent through October.

Declines across GM's brands are adding to losses of almost $73 billion since the end of 2004.

After burning through $6.9 billion in cash last quarter, GM said Nov. 7 that it had $16.2 billion as of Sept. 30. GM has said a bankruptcy filing would be a disaster.