TriShield

Feds Told GM To Drop Pontiac Or No Bailout, Ex-GM Exec Lutz Says



When General Motors shut down Pontiac, it left a lot of enthusiasts wondering why. It was just getting primed with a lineup of powerful, rear-wheel drive models, and seemed like it had a bright future ahead of it. It turns out that GM killed it on government orders, according to former GM Vice Chairman Bob Lutz.

Friend of Jalopnik and west coast editor for Autoweek Blake Rong had an interview with Lutz today, and from what Rong is putting out on his Twitter feed, it's full of plenty of bombshells.

If true, it's a big revelation of the scope of power that the government held over GM during the worst days of the recession. Power and threats like that are often spoken of, though rarely in such explicit terms. Even still, there's not much of an explanation yet as to the specific objections the Feds had about Pontiac. The division seemed to be heading in the right direction after years of wayward stumbling. The Pontiac G8 was receiving rave reviews, and a new GTO was in the pipeline from the land Down Under.

Lutz went on to tell Rong that Pontiac was intended to have an all rear-wheel-drive lineup, and that the new Pontiac G6 was supposed to share a platform with the fairly excellent Cadillac ATS.

It's amazing what could have been, and we may never know the exact internal discussions the government had when it decided to shutdown the storied brand. Something tells me Lutz knows more of the story.

UPDATE: It turns out Bob Lutz was speaking at an event at the Petersen Museum in Los Angeles, and expanded on his comments more in a Q&A. Lutz is asked about Pontiac around the 2:14:10 mark here

Pasted below is a transcript of his words.

The Feds basically wanted to get GM down to Cadillac and Chevrolet. They said, "you don't need all these brands. You need one prestige brand, and one mass-market brand." And we said "well we can't get rid of Buick because Buick is important in China, and if Buick becomes an orphan in the United States then the Chinese are no longer gonna be interested in it." And the Feds said "Fair enough, but everything else goes." We said well we'd also like to keep GMC. They said "well, GMC is basically just like Chevrolet," and we said "that may be true, there may be a lot of shared components, but GMC has an entirely different image, a different customer base, and people are willing to pay different prices for a GMC, and here's the profitability," and the Feds said "whoops, okay, keep GMC."

So now we had Buick, GMC, Cadillac, and Chevrolet, and then, I wanted, badly wanted, to keep Pontiac, because Pontiac was on its way back, and it had been mismanaged for a number of years, you know, with 'rebuild excitement,' and the excitement was only in the plastic body cladding, mechanically there was nothing about Pontiac in the 90s that would make your heart beat faster. And with the Solstice and Solstice coupe, and with the Pontiac G8, which was a great car. We were embarked on a strategy of making Pontiac different from the rest of GM in that Pontiac wouldn't get any front wheel drive cars, they would all be rear-wheel drive, and the next G6, was going to use the architecture of the Cadillac ATS, it was going to be a 3-Series sized rear-wheel Pontiac, with basically the Cadillac ATS 'de-premiumized,' obviously, a lot of the cost taken out, but still fundamentally that architecture.

That was going to be the next G6, and I think we could've moved Pontiac away from every other American volume brand and really started positioning it as attractive US alternative to some of the, and obviously at lower prices than the European rear-wheel drive cars, but the Feds said "yeah, let's just, how much money have you made on Pontiac in the last 10 years?" and the answer was "nothing." So, it goes. And, when the guy who is handing you the check for 53 billion dollars says I don't want Pontiac, drop Pontiac or you don't get the money, it doesn't take you very long to make up your mind.

But I think it is a shame, Pontiac was on its way back, and it was killed before it, before the plant could really sprout blossoms, you know, it was well on its way. So, I agree with you, I think Pontiac was a great, wonderful history, mismanaged for a number of years in the 80s and 90s and it was clearly on its way back, and we were starting to see a very good customer base in Solstices and especially in the G8, which was favorably compared in a lot of road tests to the BMW 5-Series, people would say dynamically the car is as good and it's more powerful and way cheaper, but that was too bad. but you can't go through Chapter 11 without some really harmful effects.


http://jalopnik.com/the-feds-killed-...ays-1452735716

Cole Train

iTrader: (30)

Makes me sad and sick. GM should still bring them back with a new GTO model or a G8 replacement down the road do something big, release a Pontiac brand and do it with a limited vehicle selection

BanditTA

iTrader: (3)

The video from 2:14:00 on was stuff we've never heard before.....sucks for Pontiac.

TriShield

Anyone remember the RWD Holden Torana concept from years ago? It was going to be produced as Pontiac's next mainstream car and RWD, Holden was to get a version of it as well. Instead it became the Cadillac ATS.

Colesitzy

Thanks Obama.

Felix C

When Lutz says the Feds said this...who are these Fed people? Private companies contracted to examine the books and analyze what was not profitable? Civil Servants? Who?

fruitsalad

iTrader: (5)

Axe Pontiac so we can keep making FWD econoboxes. That's government design at its finest.

Irunelevens

Pontiac was (at the time) extremely unprofitable and redundant. When you are bankrupt, you get rid of unprofitable programs. Regardless of what was coming down the line, the only thing that would make more sense than getting rid of Pontiac would be axing GMC; talk about a pointless brand.

fruitsalad

iTrader: (5)

It had been doing poorly, yes. But like Lutz said, it had so much potential and it was just getting ready to make a recovery. It's like selling the stock at a loss right before the profit report and missing out on big gains. I guess that's how it goes in bankruptcy though. Hope that's a lesson learned from all the Aztecs and Saturns.

I agree with getting rid of GMC. It's hard to believe they can justify that entire brand with the tiny profit margin they can milk out of people who are "willing to pay a different price."

jimmy169

Forget him and his old money grubbing mentality. He isn't that different from the Ford Pinto generation of bosses, and was a big shot when the American auto industry was being driven to the ground with crummy quality and pathetic reliability while they cried that other countries pay their workers less. Now GM and the other domestic manufacturers have shown that their quality can be and currently is on par if not better than imports, causing imports to up their game.

Bottom line, when he was around, the quality of their cars were garbage. Now, they've fully turned around and are winning back the trust of the American public. They could have and still can make any intended Pontiac with a GM badge. At this rate, what is stopping them from bringing back Pontiac when they feel the time is right? Chevy's, Buick's, and Cadillac's have never been better. The pathetic build quality, interior, and unreliable shitboxes that he and his yes men happily signed off on still linger in the minds of car buyers and the domestic auto industry has to continue fighting that perception for years to come.

jmurray87

iTrader: (1)

Even when Pontiac brought back some performance to the brand after the Firebird was killed in 2002 it wasn't enough to save the brand or make up for the rest of the junk cars they were producing.

bah321

I really think that after a couple of years, it could be a viable option to bring Pontiac back...or something similar to it.

I know it sounds like a pipe dream, but the Pontiac brand will never really go away. People will always collect & drive Firebirds, GTOs & G8s and I would argue that these names have more value than the name Pontiac.

Some ideas
-Reintroduce Pontiac, but not use the name Pontiac
-Use the brands GTO, G8 & Firebird. Forget everything else
-Continue to use Holden's platforms
-Low volume, higher quality

I know this seems far fetched, but if think if it's done right, it could really work

Z Fury

iTrader: (1)

If you read the article or listen to the interview, Lutz explains why GMC survived as well as Buick. The Feds wanted to cut it down to Chevy and Cadillac only.
- GM opened the books and showed how profitable Buick was oversees, Feds agreed, Buick saved.
- GM opened the books on GMC, explained how the buyers are different even though it is a redundant product and that it was highly profitable, Feds agreed, GMC saved. Keep in mind that GMC = trucks and large SUVs, both of which have extremely high profit margins.

Saab, Saturn, Hummer, and Pontiac were not making money (Pontiac was said to be breaking even at best), so GM had no defense to keep them. I'd love for Pontiac to still be around in a niche form, but it is what it is I guess.

Bottom line, cutting these brands should have happened a long time ago and shows how long GM was mismanaged.

Wnts2Go10O

iTrader: (12)

the bailout was to keep gm from going bankrupt. WHOOPS! Romney was right re: structured bankruptcy

TriShield

Remember, the same Auto Task Force formed by the Obama administration wanted to just liquidate Chrysler and felt it was beyond saving. The President himself nixed that idea. Now look at vibrant and profitable Chrysler is.

As an enthusiast Pontiac's loss was the biggest tragedy. Lutz's long term plan for the brand was to pair it to Holden like Buick is paired with Opel now. Not replace or redesign all the FWD cars and sell instead Holden cars or US derived RWD cars.

If the brand was still here it would have the Commodore sedan, Ute and Sportwagon as the G8 family. The Solstice and it's derivatives. The Holden Torana concept would have seen production at Pontiac wearing the G6 name. The G8 coupe Holden was working on would have seen the light of day as a new GTO. They might have even had a Firebird counterpart to the Camaro by now. Not a shabby showroom and one whose lower volume but higher desirability and transaction prices probably would have born fruit.

Wnts2Go10O

iTrader: (12)

holden isnt doing spectacularly

TriShield

The Alpha-based Torana was planned to be produced and rebadged here as the next G6. When the bankrutpcy hit and with Pontiac gone the car was tweaked and made into the more expensive Cadillac ATS.

We lost Pontiac, Holden lost the Torana which was supposed to be their new mainstream, smaller, RWD car. Now they are stuck reselling our Malibu and various GM Korea vehicles, basically back at square one.

justin455

I would drive the **** out of a RWD second gen G6 with a 280-300hp 3.6 V6. They could probably have that thing to ~3,300lbs.

BAD2000TA

iTrader: (6)

Bob's comments aren't new, as I read this previously. What bothers me is that the person and team involved knew nothing about cars or the auto industry. They made decision solely based on the financial strength only and nothing about the history and heritage and marketing potential that existed with the brand. Look at how the heritage has propelled Dodge and Chrysler sell R/T Chargers and Challengers; Daytona packages; the Yellow Jacket.

Pontiac was a severely mismanaged brand, but nothing that couldn't be turned around. But it doesn't happen overnight. Bob Lutz was instrumental in turning Chrysler around in the late eighties and nineties. The Viper was approved during his watch. Bob joined GM in September 2001. By the time he joined the company, the Firebird was already in the morgue and the other products that damaged the brand had been designed and approved years before. Bob really tried to bring some enthusiasm back to Pontiac. He was responsible for bring the Holden Monaro to the States as the GTO. From what I read previously, Maximum Bob had lots of internal fights with the bean counters and established lifers and couldn't get his vision of the brand through.

Overall, I was and I'm still extremely disappointed that Pontiac is not around. I'm furious that the government dictated that Pontiac had to die or they didn't get the money. There was and still is a lot of potential in selling Pontiac. There are many, many people that I know in the hobby that are Pontiac fans that would never buy a Chevy. I myself have owned several Trans Ams due to the styling, performance, etc. and have never considered buying a Camaro. I've owned a Pontiac Grand Prix, but will never buy a Monte Carlo.

As GM moves forward and out from under government ownership, I hope that Pontiac might come back, even if under a smaller niche branding sold thru Buick/GMC dealers. But, probably never happen......