The Incredible Shrinking GM

GM held a press conference yesterday morning where Fritz Henderson discussed portions of the latest restructuring plan. As expected Pontiac will be dropped as a brand and the demise of Saturn will be accelerated.

That leaves four brands in the US; Chevrolet, Buick, GMC, and Cadillac. Chevrolet is a full line brand while the Buick, Cadillac, GMC brands together represent a full line of vehicles.

GM also announced that they intend to shrink the number of dealerships from over 6,000 now to around 3,600 in a couple of years. That is a costly proposition.

Discussion of exactly who will own GM ensued. Turns out about 50% will be owned by the government, and 39% by the union (technically the union's VEBA - Voluntary Employee Beneficiary Association). The bondholders are not happy - holders of $1,000 bonds are being asked to accept 225 shares of GM stock for their $1,000 loan. That's not much left at ~ $2.00 per share. Plus they'll not have much of an equity stake (around 10% of the total equity), which means little say in the direction of the company. And yet there is currently $27 Billion worth of outstanding bonds.

Also discussed were the future of Opel and Vauxhall (the venerated English brand that shares Opel platforms). Chevrolet is not a good replacement for Vauxhall or Opel since those brands occupy a higher rung on the status ladder than Chevy.

The Holden company was also talked about. Holden is GM's Australian arm that produces the Pontiac G8 and the last iteration of the GTO. The G8 has received great press and the GTO was one of the best cars GM produced. It had a great chassis, a Corvette motor, and the best interior to date for a GM car. A 2006 GTO can be had at a great price and if you want a rumbly V8 there are very few cars as good as the Holden developed Pontiac GTO.