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Sunday, 29 March 2009 |
GM CEO Fritz Henderson announced last night that Pontiac will be shut down indefinitely. Executives say that the move is just the first in many drastic measures needed to help the company survive the recession.
Pontiac is scheduled to be shut down next year after inventories are eventually cleared. This news comes as a surprise to many analysts who know that Pontiac was GM’s third best selling make. Other GM subsidiaries like Saturn, Saab, and Hummer are also on the razors edge as they too may be downsized or closed completely. The reason why Pontiac was chosen for the axe was due to profitability concerns. Pontiac was not making GM a substantial enough profit.
21,000 jobs are expected to be cut in the coming months when the company closes its doors. Pontiac was introduced by GM in 1927 with the Pontiac Chief and has been a symbol of power ever since.
Okay let’s talk frankly about this. The reason why the automakers are in trouble is not because their cars aren’t selling, Pontiac is proof of that, it’s because of bad inefficient managerial structuring. If GM were to hand over Pontiac to a small car company who can manage the profits better, they would thrive. But let’s face it GM would rather shut them down than admit their inefficiency and sell them off. Perhaps they are afraid that Pontiac would be profitable for someone else and become a strong competition. Instead they’ll get cut and with no intent of bringing them back in the future. Sad.
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