GM to cut 21,000 jobs, eliminate Pontiac

General Motors Corp. could be majority-owned by the federal government under a massive restructuring plan laid out yesterday.

The plan calls for GM to cut 21,000 U.S. factory jobs and eliminate the storied Pontiac brand by next year. And the automaker will phase out or sell Saturn by this year -- earlier than expected.

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

GM CEO Fritz Henderson said there will 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 and transmission, and parts-stamping factories, he said.

GM's powertrain plant in Fredericksburg, which makes a component used in transmissions, had not been notified of any changes. It employs about 100 people.

The company said it will phase out its Pontiac brand 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.

GM had earlier said it would stop building Saturn by the end of 2011.

Haywood "Huddy" Hyman Jr., owner of Saturn of Richmond, said dealers were told in a conference call yesterday that GM has several potential buyers for Saturn. The company, he said, will announce the buyer by June 1, the day GM must provide the federal government with its restructuring plan.

Hyman said yesterday that he hopes the situation will soon stabilize so he can get back to the business of selling cars.

"Everybody is waiting," he said.

If GM doesn't come up with a buyer, Hyman said, he will focus on selling used cars.

He recently opened a used-car store on West Broad Street, where he had operated a second Saturn store until he closed it in November because of slow sales.

For Hyman, Saturn being sold will end a nearly 50-year partnership between his family and GM. His father opened a Pontiac dealership in 1955.

The decision to shut down Pontiac means the death of a brand known for its muscle cars, including the Trans Am, made famous in movies, and the GTO, the subject of a nostalgic song by Ronny and the Daytonas.

Doug Pridgen, president of Haley Pontiac GMC on Midlothian Turnpike, said yesterday that he is disappointed to see Pontiac go.

Haley, he said, always did well selling Pontiacs and had a strong customer base. He would not give exact sales figures.

But he said he understands the moves if they mean that GM remains in business.

"We have a vested interest that all this works out," he said.

As for losing Pontiac, he said the dealership will be able to continue selling GMC vehicles.

Henderson said in a news conference that the company was spread too thin to make Pontiac work. "We didn't think we had the resources to get this done from a product perspective," or marketing, he said.

He said the decision was very tough for many at GM because of the 83-year-old brand's heritage.

George Hoffer, a professor of economics specializing in the automobile industry at Virginia Commonwealth University, said the moves were dangerous and most likely made to appease the federal government.

"You wonder, the way the government is cutting GM, if it's going to lose the patient on the table," he said.

Hoffer is concerned because two of the three top-selling brands of cars and trucks for GM last year were Pontiac and Saturn, respectively. Pontiac sold 267,348 cars and trucks, while Saturn sold 188,004. Chevrolet sold 1.7 million vehicles.

"How are you giving up your second and third best-selling divisions? In the short run, where are you going to pick up the volume?" he said. "Personally, I think they've given up too quickly."

GM is living on $15.4 billion in government loans and said yesterday in a filing with the U.S. Securities and Exchange Commission that it envisions receiving an additional $11.6 billion. But if GM's restructuring plan can't satisfy the government by June 1, the struggling company could go into bankruptcy protection.

GM said it will ask the government to take more than 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1. The swap would cancel about $10 billion in government debt.

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 that will take over retiree health-care expenses starting next year.

If both are successful, the government and the UAW health-care trust would own 89 percent of GM stock, with the government holding more than a 50 percent stake, Henderson said.

Staff writer Louis Lllovio and The Associated Press contributed to this report.