GM Dumps Pontiacs -- Car-Buying Opportunity of a Lifetime
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But it could also be a big mistake by GM's interim CEO Ed Whitacre, the former telecom executive who recently pushed out Fritz Henderson, a GM veteran who took the company through Chapter 11. GM will obviously lose money on each vehicle by selling Saturns and Pontiacs at fire-sale prices. That could inflate the firm's red ink in the fourth quarter.
Perhaps the worst effect of the aggressive discounting is that some consumers will expect similar deals from GM brands that the company is keeping, like Chevy and Cadillac. GM may find that customers see it as a company prepared to offer sweet deals across all of its brands. That will make it hard for the car company to keep its market share, unless it is willing to create incentives across its remaining model lines well into 2010.