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GM to Phase Out Pontiac Brand, Close 13 Plants, Cut 21,000 Jobs

As part of its revised restructuring plan, General Motors Corporation (GM) says it will phase out its Pontiac brand by 2010, eliminate 42 percent of its dealers, close 13 plants, and cut approximately 21,000 hourly jobs by next year, with plans for additional jobs cuts by 2011. "We are taking tough but necessary actions that are critical to GM's long-term viability," says Fritz Henderson, GM's president and CEO. "At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team." GM did not announce where the plant closures would take place. The New York Times reports that GM will offer bondholders 225 shares of company stock, worth $414 at market close on April 24, for every $1,000 they hold; the company says it will file for bankruptcy protection if the deal with bondholders is not accepted. Bondholders must agree to swap out at least 90 percent of outstanding bonds by May 26 to avoid the bankruptcy filing.

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