Pontiac Is Going Out of Business

After 84 years, former performance division of General Motors is going out of business. On April 27, 2009, due to financial crisis and restructuring efforts, GM announced that by the end of 2010 the Pontiac brand will be discontinued and that focus will be turned on four core brands in North America: Chevrolet, Cadillac, Buick and GMC

Pontiac's sales figures were a little shabby even before GM went bankrupt. The peak of it's popularity was probably 1968 when the company had sold nearly one million cars. Models like the GTO, Trans Am and Catalina 2+2 were jammed with horsepower and sported colors like "Tiger Gold". The Firebird Trans Am was driven by Burt Reynolds and Sally Field in 1970s blockbuster "Smokey and the Bandit".

By the end of the 1980s, though, Pontiac was trying to fit in with other car manufacturers, trimming the bad boy look. Unfortunately, doing so resulted in Pontiac losing its edge.

Bill Hoglund, a retired GM executive who led Pontiac in the 1980s, blames the company's demise on newly appointed CEO of Pontiac in 1984, Roger Smith, who reorganized the brand, cutting costs by combining Pontiac's manufacturing, engineering and design operations with those of other GM brands.

"There was no passion for the product," says Hoglund. "The product had to fit what was going on in the corporate system."

Reorganization was necessary to keep up with the Japanese competition that had lower production costs. Pontiac ended up building cars that looked and drove like other GM cars, losing grasp of the muscle car segment.

By 2008, the last year before GM announced Pontiac's shutdown, sales were 267,000 units, less than a third of the level reached in 1968. The cause was a lack of consistent strategy or leadership, due to executives rotation every few years, on their way up the corporate ladder, each with a different vision. This year, Pontiac's sales are less than 1 percent of the 2.2 million cars and trucks GM is expected to sell. GM built the last Pontiac in May.

On October 31st, 2010, GM's agreements with Pontiac dealers expire. Dealers will continue to service cars and honor their warranties, but starting today any new Pontiacs remained unsold will be considered used cars by GM.