A lot of people were confused when General Motors decided to axe Pontiac. The brand was finally starting to look up after being mismanaged for a number of years. GM had big plans for the brand, such as a next-generation G6 based on the athletic Alpha platform in the works, and even a replacement for the Pontiac GTO. So what happened?
Well, according to what Bob Lutz is confessing, Pontiac was killed under government orders. In the midst of the company’s bankruptcy, the feds wanted GM to trim the fat and get down to two core brands, Cadillac, for high end vehicles and mass market Chevrolet. Lutz argued that they needed to keep Buick due its to relevance in China, and if it were to not exist in America anymore, the Chinese would no longer want them. GM also wanted to keep GMC, as it had an entirely different image with customers who were willing to pay different prices for a GMC in comparison to a Chevrolet, not to mention the brand was profitable. So the feds said okay, keep GMC and Buick, but if you don’t get rid of Pontiac, we won’t bail you out.
So away Pontiac went. During a Q&A at the Petersen Automotive Museum in Los Angeles, Lutz said Pontiac was on its way to having an all rear-wheel drive lineup before being killed off, and the next G6 was going to be based off the Cadillac ATS.
“The next G6, was going to use the architecture of the Cadillac ATS, it was going to be a 3-series sized rear-wheel drive Pontiac, with basically the Cadillac ATS ‘de-premiumized,’ obviously, a lot of the cost taken out, but still fundamentally that architecture.”
He continues:
“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 U.S. alternative to some of the, and obviously at much lower prices than the European rear-wheel drive cars, but the Feds said ‘ how much money have you made on Pontiac in the last 10 years?’ Well, 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,” he continued. “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.”
Again, Pontiac made no money. Though it’s a shame that it took up until it was too late for the brand to have what would have been a stalwart lineup.
But the question is; was it really Uncle Sam? Or did GM — with Bob Lutz — inadvertently kill Pontiac by forcing it into irrelevance with re-badges of other GM vehicles? Furthermore, what would that ATS based G6 have looked like?
Buckle up, and watch the full 2-hour interview below. Along with the Pontiac bombshell, we hear a lot about Lutz’s fascinating background, all the way back from when he was a toddler in Switzerland. For some reason, the interview begins around the 23-minute mark:
Comments
Great. Let’s bring this issue back again…
–Feds said ‘ how much money have you made on Pontiac in the last 10 years?’ Well, the answer was ‘nothing.’ —
There’s the answer. Not the government, but basic economics.
What business case would justify continuing to produce cars that made nothing? Why should GM have continued with Pontiac if it wasn’t making money? I loved Pontiac. Still do. My ’01 Grand Prix just turned 229,000 miles yesterday. But, the business plan Lutz talks about really doesn’t match the current direction of GM. Chevrolet has the RWD performance locked down with Camaro, SS, and Corvette. A de-contented ATS likely wouldn’t be profitable either – especially with the G6 moniker. Anything that could be done with Pontiac could be (and has been) handled profitably with Chevy. His business model for low volume RWD cars couldn’t function with sticker prices less than 25k-30k. Look at the prices of the Camaros, SS’s and Corvettes. Sorry, but I don’t see how it would work.
Pontiac was dead long before 2009.. then it simply became official.
now, cue moanalua….
The reason Pontiac wasn’t making money is because of the government too. The government, running under liberal “hate America” ideology, that said the United States was the greatest evil in the world, destroying the planet, evil corporations, with GM being poster company for all the evils they believed the United States is, was doing ALL it could to PROP UP it’s competitors, namely Japanese auto makers, and at the same time, make the market hostile to American brands. How did they do that you ask? By onerous CAFE standards. Those standards simply told the American automakers to make their cars like the Japanese cars, effectively ELIMINATING any reason for GM to be in the market. THAT is ALL those standards did. That along with rationing of oil through extremely restrictive drilling prohibitions on the outside and government/liberal supported unions on the inside, THAT is why GM was in the shape it was in, ALL because of overbearing, unconstitutional GOVERNMENT and anti-American liberal ideology.
I don’t want to hijack and send readers elsewhere, but Jalopnik has done some damn good articles (both facts and editor opinion pieces) over the past couple days regarding Pontiac and Lutz’s claims. Very good and insightful reads.
“His business model for low volume RWD cars couldn’t function with sticker prices less than 25k-30k”
^This is crux of the matter. Lutz ambitions were too unrealistic for the time in which we live in. The consumer’s interest has shifted, and those that would have wanted such a car 10 years ago are a smaller group of people today.
I knew about the “RWD G6” stuff ages ago. It was to be a variant of a proposed Holden Torana, something not too unlike the Torana concept from 2004.
But I knew it was a longshot, that RWD alone wasn’t going to make Pontiac relevant to buyers. That Lutz was too much of an unrealistic, pie-in-the-sky car guy to think that affordable performance in the era of $1.30/L gas was unworkable. He proved his ignorance to me when he said wanted Pontiac to become an “American BMW”; him thinking that performance and luxury were value propositions that Pontiac could capitalize on.
Source: http://www.businessweek.com/stories/2003-03-16/an-american-bmw-dont-hold-your-breath
That’s why I don’t buy Lutz’s story.
I wouldn’t want to see an decontented ATS today just as I would never want to see it as a hypothetical G6 today. The ATS is a bright spot in Cadillac’s range and there is no need to dull it with cheaper, more accessible versions; versions that can only boast about being RWD and nothing else.
Oh, and don’t forget the 10 years of unprofitably. It’s hard to blame the US feds for that one when you were working there, Lutz. Why didn’t you do anything to make appealing cars that created volume rather than expensive R&D niche products?
“Why didn’t you do anything to make appealing cars that created volume rather than expensive R&D niche products?”
Did you miss the 2008 Malibu/Aura? Chevrolet /GMC Silverado/Sierra/ Tahoe/Yukon/ Traverse/Acadia/Outlook?
Enjoyed that, learned a little more about Bob Lutz & his knowledge of the world market which IMO he knows his stuff. Proper petrol head (aka gear head in US) he obviously enjoys talking cars, hat tipped to the man.
First of all, I find it hard to believe that Chrysler has been bailed multiple times with seemingly no game plan, but GM had to kill a storied brand to make an extra couple of bucks. In my eyes, brands were a small part of the problem. If GM built cars as great as they do today on 8 brands, it would hardly make a difference.
Second, I’m going to be the first to mention the elephant in the room. When 100% independent, is there a chance GM gives Pontiac another go? If they strip down the alpha platform vehicles, they already have 3 RWD cars (G6, G8, Trans Am). The brand already existed and hasn’t been gone for long. In fact, I’m sure a good 30% of people are unaware Pontiac even left.
Also, if they don’t do this, I hope they continue the RWD Regal project. It was probably too fill the void of the failed G6 project, which I was painfully unaware of.
” In my eyes, brands were a small part of the problem. If GM built cars as great as they do today on 8 brands, it would hardly make a difference.”
It makes a hell of a difference when you’re trying to fund the engineering for so many brands that only end up cannibalizing each other instead of the competition.
Well I am a Pontiac fan from the day I was driven home from the Hospital when I was born.
I also am a big Bob Lutz fan and support much of what he has said and done. Now with that qualified I really think they did the only thing they really could do at this point.
The real issue is Bob got there 10 years too late and had no money to really fix Pontiac. In the end they had two real Performance models in the G8 and the Solstice. The G8 is coming back as a SS and the Solstice really was not selling in numbers to where it would have made it to a second gen. GM really had no money for a second Gen anyways.
Pontiac was a damaged brand and had not been profitable for a long time. Even if GM had kept them how would they have faired since the Chapter 11 seeing GM has just finally only got the first stage of the revamp at Chevy done with a lot more work to go. Also Buicks revamp is just starting to begin.
Where would Pontiac fit in between the price of Buick and Chevy? There is just too much over lap in the similar price segments.
In a global aspect where would Pontiac fit? Every division is now going global with only a few market driven segment models for each global market. Chevy is with Holden now a Holden needed the smaller more efficient cars and could share the RWD with Chevy. The Buicks are now part of Opel and with millions of Chinese wanting them Buick was not going to go away.
The truth is the G8 is back on US soil as a Chevy and the so called Alpha G6 would easily fit in as a Buick GN and better fit the price segment.
In the global automotive market we are now to a point where most automakers are only able to handle 1-3 brands. The market can not support 5 brands inside a $40k price range.
Looking I hind sight many predicted GM would lose market share and profits. Well since the loss of Pontiac GM has picked up market share and increase profits.
Now finally I still am a Pontiac owner and attend many Pontiac shows including the largest Pontiac show in the world the Pontiac Tripower Nationals. At these shows many there are not very upset with the loss of Pontiac as many feel Pontiac faded from being what they were years ago. With the loss of the Pontiac 400 in 1979 they lost their soul that set them apart from Chevy. In 1988 with the loss of the Fiero they lost their real innovation and in in the last year of the Firebird they lost their real spirit. Since then they were mostly rebadged plastic cladded Chevys with red Dash lights.
The best two cars they had were Holdens and the Solstice is not the kind of car that can support a division on its own or for a long time. No two seater outside the Corvette and Miata have lasted very long not even the RX7.
In my heart like Bob I wish they had saved Pontiac but as time goes on and seeing how things are I really can not rationalize where GM would be farther along or better off with a division in need of major repair.
If you do not believe me then try to build a realistic business case where you can pay for billions in development, create a global market for a Pontiac and sell it at a price that would not piss everyone off like the SS price did while offering all real and true performance cars. Now on top of that still make a profit and still have to find the billions to rebuild Buick, Opel and proper Cadillac LTS. Then you also have to finance the second wave of improved cars at Chevy with the second gen Cruze, Sonic and much needed Malibu replacement. Oh and a properly funded Camaro 6th gen.
Not easy if you have to play by the parameters GM has to face and not the ones that work on the web.
You screw up 1-2 models bad and you can set the company back 5 years.
I love Bob and agree with him often but he has made mistakes and even has fessed up to them. This is one where my heart is with him but my brain says it is not a practical idea.
While Pontiac is gone I still have mine and no one can take it away. To be honest it is good there are no more G3, G4, G6 and Torrents damaging my cars image.
As for the re bodied Camarobirds they sell in very small numbers and I can spend much less and get a clean example of a real Trans Am with a real Pontiac engine that will only increase in value with time.
If GM could afford to have revamped Pontiac Right and had it done in 5 years I would have been all for it but It would have taken 10 years to have done it right and the continued damage would have not helped.
If Bob had only come ten years sooner. He was the only one who understood the brand in years at GM. But by the time he got here there was no money for him to fix them in time.
I spoke to Fred SImmion of Pontiac Motorsports and he told me the 04 GTO did not get the hood and the split tail pipes because they just did not have the money. F Bodfather Scott Settlmire the F body manager told me how little money they had to do all they did do just to get the GTO here. The cost of the crash test alone took much of the funding.
I am sure GM wanted Pontiac like I want a C7 but neither of us could afford it.
Read his three books as they are some of the best insight you can find on the auto industry.
I prize my three books and have learned a lot.
I also recommend Deloreans book On a Clear Day You Can See GM. It tells much of what lead us to where things ended.
If GM was forced to kill Pontiac, then that means there was a plan for it and there still is. GM is going to bring back Pontiac, however only when management sorts out the more important things with the company. I honestly think lutz’s idea of a brand focused on affordable RWD cars can work.
Everything that was intended for Pontiac is being folded into Chevy and to some extent Buick (GN and GNX on Alpha)
Great information…it seems a lot of us are nostalgic for the era of exciting GM brands that were distinctive and of a certain quality.
I was very young when our family bought a 1968 Pontiac Bonneville, with a distinctive beak and personality all its own. I loved what Pontiac represented in the sixties and through the early eighties. I bought a 1983 Pontiac STS in 1984, which was a great car – European style and feel in an American package. Unfortunately, I totaled it after 3 months and bought a 1985 Buick Regal Somerset. That was my last GM car – I traded it in late 1986 for a German vehicle.
Pontiac was not the same car with the introduction of the 1985 Grand Am. I loved the look of the car, but the plastic interior was nothing like the quality interior of those 1960s dashboards. Buick was a more desirable target with its combination of sportiness and near-luxury, but GM decided to save costs and went the cookie cutter route with hopelessly bland interiors across the board.
GM is doing a lot of things right these days, so let’s hope we continue to see future models that people want to buy. Reality -aka business models – must be linked to the marketplace. Pontiac will never be resurrected, but hopefully Buick can successfully take up the mantra to infuse cars that are sportier and nicer than Chevrolet and be an attractive alternative to the masses still buying Japanese and German counterparts.
I came home after my birth in a 1960 Ventura and have driven, owned, rode in and raced most of the great Pontiacs over the years. I have been lucky to be friends with many top Pontiac collectors so rides and drives in SD cars, Tri Power GTO’s and many other of these Pontiacs were not rare.
We went to school in a 63 GP with a 67 Ram Air IV and even had a Tempest with a Slant 4 and a Jag with a 428 at our disposal.
I miss Pontiac but I was getting tired of seeing them decline and the cost to fix them and find a place in the market would have been difficult.
Today the performance market is not large. Yes they get most of the media but the segment is small. GM has made it clear with cars like the Stingray, Z/28, CTS V Sport and Regal GS that they are still serious about performance. The cars we have now will out run and perform anything GM has ever made and this trend will only improve.
The coming 6th Gen Camaro will take the Alpha and apply V8 performance to a top chassis and have 500 pounds less mass to deal with. The Vette already in base form performs right with the Z06. The SS will beat the G8 in upgrades and be replaced by a lighter new platform in the not all that distant future.
It is a shame Pontiac did not survive but times and markets have changed and Pontiac just ran out of time. I would have loved to see a Pontiac in the new GM but they already have their hands full with getting what they have redone for the future. I would rather see them take the money they would have invested in a Trans Am and apply it to a Camaro and make it just that much better vs. two diluted models.
Either way we have yet to see the best performance cars GM has ever made. With the coming regulations this just may be the golden era of performance. I suggest many who are still smarting over Pontiac let it go and enjoy the cars we have today. Sometimes you just have to stop and look around or you may just miss something.
Bob was well on his way to reviving Pontiac, as the excitement brand, when his legs were cut off from beneath him.
My wife and I have been Pontiac enthusiasts for decades. We were appaled when Pontiac was axed. So, she bought one of the last new G6 hardtop convertables, and I picked up an Emerald green Solstice, with 7000 miles on it. We garage them in the winter, and can’t wait to get them out of storage in the spring. We will keep them until their fenders fall off.
Lutz is a car guys, car guy, and like a previous post pointed out … he arrived 10 years too late. The only thing I disagreed with Bob on, was his distaste of diesels. But as for bringing exciting cars to GM… he was, and still is… the best.
I suggest Bob Lutz knows what he is talking about because he was front and center dealing with Rattner and his unskilled crew. Their example was Toyota and Lexus. They failed to realize the Toyota group also includes Daihatsu, Hino and Scion. Look also at the Volkswagen group and all its brands.
Olds and Buick were an overlap as was Saturn and Chevy, but Pontiac had a sporting past that set it apart.
With the possible exception of Cadillac, all GM’s North American brands were tainted in one form or another back in 2008. They all needed product which they have since gotten. Pontiac had a great heritage and at least had the best reputation as the sporting brand in the GM portfolio. Every manufacturer covets their sporting credentials, but Rattner and his crew killed GM’s offering.
The fact that GM has dropped to second place in the Canadian market can be directly attributed to the loss of Pontiac. There was even speculation that it become a sub brand of Buick, so as to counter the age discrimination associated with Buick. Finally having more than one brand based off a similar platform provides an alternative in case some consumers may not like the styling of the “other” GM brand, Toyota, Nissan and Honda have different products for different outlets in Japan, but Rattner was not smart enough to know this. You can call this good insurance in case one model tanks as the Civic recently did.
I think GM, once completely on their own will bring back Pontiac as a “Niche Brand.” I don’t get it why people are saying that it won’t come back! They are either in denial or just don’t want it back! I still see a place for Pontiac in the GM lineup! I get what Lutz is trying to say: He wants Pontiac to have luxury amenities in a performance car! So, kind of like my 2001 Grand Prix GTP Special Edition! A fast, beautiful car with a Heads Up Display, Bose stereo, Polished Rims, Premium Heated Bucket Seats, Moonroof, Spoiler, etc.
I think a they should bring back their historic names like Grand Prix, Grand Am and Bonneville!
Grand Prix (Coupe/Sedan) Coupe would be a replacement for the Trans Am. Luxury + Muscle
Grand Am (Sedan/Convertible) Luxury + Sport
Bonneville (Sedan/Coupe) Coupe would be a replacement for the GTO. Muscle + Sport
I think that Pontiac should go back to having their own special engines (especially if it’s just a niche brand.) The main engines should be a 2.5L Turbo I4 (H/O VVT and iVLC) with 315HP and 325TQ, a 3.6L Supercharged V6 (H/O VVT, SIDI and AFM) with 440HP and 425TQ, and a 6.0L Supercharged V8 (H/O VVT and AFM) with 595HP and 570TQ.
Easy to see why they will not comeback.
Performance is a niche market and a small segment of the auto market. It is easy and cheaper to use a brand and model that is already being produced as a performance version.
Second once GM is done with the transformation there will be no room for Pontiac as Buick and Chevy will take in the ground Pontiac used to have. Note Pontiac was already being crushed as their ground being lost to Chevy as Pontiac was having trouble moving up price wise. Many of the Pontiac buyers refused to pay for the $40K Bonneville’s and $36K GP’s.
Your 2001 GTP is still here as the Regal GS.
Finally there was not a lot of love for Pontiac at the end. Lets face it even half or more of the Pontiac fans were not grief stricken as many felt Pontiac has already died years earlier.
Other than a few die hard fans on the web there is not many who have really felt a loss with Pontiac as it was at the end. I heard more out cry of the loss of Olds but even it died away fast.
To do Pontiac right in a low volume with its own bodies and engines would be very expensive and few would pay the price.
The days of 5-6 divisions has passes and today companies need to do it with 1-3 divisions and do so globally.
Times have changes and the way of doing business has changes. GM just took too long to make these changes or to even have saved Pontiac.
Well as Paul Harvey would say and here’s the rest of the Story.
Jay Alix a financial wizard has spoken out in the Nov 18 issue of Forbes.
He is the guy who brought the plan to Rick Wagoner about prepackaging GM as a New Company and Old Company. The good assets would be in the New GM and the bad Assets went to the Old GM and liquidated.
These plans were done and structured before they went to the government and the courts.
In this story before the government became involved here is what he had to say, Jay Alix “Over the next weeks I worked closely with Bienenstock, assistant general counsel Mike Millikin, Al Koch of AlixPartners and GM senior vice president John Smith on the NewCo plan. We huddled dozens of times with Wagoner and Henderson to work out which brands GM would ultimately have to give up (Hummer, Saturn, Saab and Pontiac) and which ones it would keep (Chevrolet, Cadillac, GMC and Buick). Informed debate and deep analysis of structural costs led to decisions about projects, factories, brands and countries”.
Odds are Bob was never in on this and may have mistaken the Government for the loss of Pontiac when the government accepted the prepackaged deal GM has already worked out.
I would recommend reading the story as it is a very good read and ties a lot of lose ends up.
http://www.forbes.com/sites/danbigman/2013/10/30/how-general-motors-was-really-saved-the-untold-true-story-of-the-most-important-bankruptcy-in-u-s-history/
This is an interesting article, but very self centered. How come Al Koch’s name is only coming out now? While I might let him take credit for the idea, how come he was not part of the implementation team. An idea is great but execution is everything. Both Koch and Lutz have great egos, but in this case I believe Lutz’s version. Also to imply that Lutz was not in on brand retention discussions is naïve.
There is a lot of thing we all do not know and many within GM that they did not know.
This was a problem that took in a lot of Ego’s and put them front and center. These are really the last people to talk as the Gov, Unions and many others have all taken credit but we had yet to hear from the GM insiders at the top.
The plan described here is how they did do the chapter 11 as it is documented well about the Old GM and New GM.
Many assumed the Government provided this but they are not smart enough.
As for Bob I would not be naïve about him not being consulted. The folks in this room were his bosses and they had some hard choices to make. They knew if he was consulted he would fight for each and every one of them. accept maybe Hummer and even then he would not give up easy.
Bob is a product guy and he is a fighter which is a good thing but at this point in GM’s history they were looking to save the company not a division. Some hard choices had to be made and they had to have a clean profitable package presented to get the money and to do this in a expedient time frame.
Even Bob in his books said he is not a finance guy and that they are needed to help balance the product people. If you leave a company to one or the other they will fail. I think it is in his Bean Counters book.
In the end they did what they had to do and we have to keep in mind Bob was in product development and not finance so I am sure there was much he did not participate in. He may have given his opinions and feedback but the final choices were made by his boss and his bosses boss.