Pontiac fans glum with brand poised to head into sunset

NASHUA – The owner of one of the state’s oldest Pontiac dealers will continue business as usual, but said he will be sad to see the former muscle-car maker be put out to pasture after General Motors Corp. announced Monday it would junk the brand.

Phasing out Pontiac by next year would be part of a restructuring plan the company announced Monday that includes swapping about $27 billion in bond debt to the government for GM stock. It would include cutting 21,000 U.S. factory jobs.”It’s a sad day,” said Jack Tulley, whose dealership on the Daniel Webster Highway in Nashua also sells BMW, GMC, Mazda, Buick and Volkswagen models. “Pontiac has been part of the GM family for 83 or 84 years.”

The employees who work at plants that assemble the cars and the plants that make parts for the cars will be the ones who feel the real impact of the shuttering of Pontiac, Tulley said. He doesn’t anticipate needing to cut his own sales or service staffs, he said.

Pontiac was founded nearly a century ago as GM’s entry into the muscle-car market. Famed engineer and auto executive John DeLorean is credited with creating Pontiac superstars like the GTO and Firebird. DeLorean later went on to develop the DeLorean, which was featured in the “Back to the Future” trilogy of movies, for his own car company.

Nashua resident John Goguen has owned many Pontiacs over the last quarter century, including 1969 and 1970 GTOs he’s restored himself and 2006 and 1997 Grand Prixs he and his wife drive.

“It broke my heart,” he said on hearing the news that Pontiac could close. “I’m not real happy about it. We’re a Pontiac family.”

Goguen said he has many memories attached to the several Pontiacs he’s owned. The 1970 GTO, in particular, he bought 22 years ago. Now he worries about the wisdom of keeping his newer Pontiacs, including concerns that the cars’ value will plummet.

“I’m worried about getting parts, and I’m worried about servicing it,” he said. “That’s probably my biggest concern.”

On that count, Tulley said Pontiac owners can rest easy. While he plans to sell the dealership’s remaining stock of Pontiac models in the next 12-18 months, he said the dealership will continue to offer regular and warranty service on the brand and will have enough Pontiac parts to do so for years to come.

He said there are no plans for now to market the cars more aggressively or offer extended rebates or other deals.

“It’s not a fire sale by any stretch of the imagination,” he said. “We’ll clear the walls. There’s no question about that.”

GM is already living on $15.4 billion in government loans and, in a Monday filing with the U.S. Securities and Exchange Commission, said it envisions getting another $11.6 billion. But if the proposed restructuring plan doesn’t work, the company would likely file for bankruptcy by June 1, according to company CEO Fritz Henderson.

The debt exchange deal would ask the government to cancel about half the company’s loans, about $27 billion worth, and give the government more than 50 percent of the company’s stock.

In addition, GM is offering stock to the United Auto Workers for at least 50 percent of the $20 billion the company must pay into a union-run trust so the union can take over retiree health expenses starting next year.

Those deals would be in addition to stock sales to bondholders that would give those holders about 10 percent of the company, leaving investors with less than 1 percent of the company’s stock, according to the company.

In total, the plan would reduce GM’s $62.4 billion in debt by about $44 billion.

GM said it would speed up six additional factory closings that were announced in February, although it did not identify the locations. Additional salaried jobs cuts also are coming, beyond the 3,400 in the U.S. completed last week.

Henderson said there would be three more factory closures in 2010 beyond the six that were previously planned. He expects to identify them publicly in May. They will include assembly, engine, transmission and parts-stamping factories, he said.

Including previously announced plant closures, the restructuring will leave GM with 34 factories at the end of next year, 13 fewer than the 47 it had at the end of 2008.

Besides the U.S. job cuts, General Motors Canada said it plans to slash its hourly work force from 10,300 currently to 4,400 by 2014.

The company also said it plans to reduce its dealership ranks by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605. When asked how GM would accomplish that, Henderson would say only that the company would make offers to the dealers in the coming weeks.

The company said it would phase out Pontiac no later than next year, and the futures of Hummer, Saturn and Saab will be resolved by the end of this year by either selling them or phasing them out, too.