New York/Toronto, April 28 (Inditop) Troubled General Motors announced Monday to cut 21,000 US factory jobs by next year, phase out the famous Pontiac brand and offer the US government stock in lieu of half of government debt.
GM also said it planned to close six more US units to have only 34 plants by 2010, reduce dealership by 42 percent from 6,246 to 3,605 and axe more salaried job.
The auto giant, which has so for borrowed $15.4 billion to stay out of bankruptcy since December, said it could still be forced to file for bankruptcy protection unless its bondholders swapped their claims for stock.
Announcing to phase out the 83-year-old Pontiac brand, the company said its Hummer, Saturn and Saab brands could also be sold or phased out by the end of 2010.
GM also said it would need additional government borrowings to the tune of $11.6 billion to stay afloat as it fine-tunes its restructuring plan.
The auto company said its “US hourly employment levels are projected to be reduced from about 61,000 in 2008 to 40,000 in 2010, a 34 percent reduction, and level off at about 38,000 starting in 2011.”
GM (Canada), which currently employs 10,300 hourly wage workers, also announced Monday to cut them by 57 percent to 4,400 by 2014.
The Canadian subsidiary also said it will shut down about 310 dealerships by the end of 2010.
Monday’s announcements by GM are part of its restructuring plans to be eligible for long-term loans from the US and Canadian governments.
Both the governments, which rejected the automaker’s previous restructuring plan as insufficient, have given it till the end of May to get the new plan okayed to become eligible for billions of government loans.
GM Canada, which accounts for a little less than 20 percent of the parent company’s overall production, has car and truck plants in Oshawa near Toronto, a transmission plant at Windsor near Detroit, and an engine plant at St. Catharines just near the US border.
It also has a joint venture with Suzuki at Ingersoll, not far from the US border.
While Oshawa’s truck plant ceases operations May 14, the transmission plant will also shut down next year.