General Motors (GM) is to cut 21,000 US jobs this year and phase out its Pontiac brand, as it aims to meet a 1 June deadline to revamp its business.

Brand is going to be history.  Get Yourself a Rice Burner.

GM has to complete its restructuring by then to gain the government loans it needs to avoid bankruptcy protection.

After shedding Pontiac by the end of 2010, GM will focus on its Chevrolet, Cadillac, Buick and GMC brands.

The firm also said it hoped to halve its debts by persuading bondholders to swap $27bn (£19bn) of bonds for shares.

The loss of 21,000 hourly jobs includes an additional 7,000 to 8,000 employees from a plan submitted to the government on 17 February.

The cuts mean that its American workforce will be reduced from 61,000 to 40,000.

GM also wants the government to swap half its current loans for a 50% stake.

The government has so far given GM $15.4bn in loans.

Shares in General Motors rose 21%, or 35 cents, to $2.04.

Nostalgia

GM's chief executive Fritz Henderson said the decision to eliminate Pontiac had been tough because of the 83-year-old brand's heritage.

The brand was known for models including the Firebird and the Trans Am.

And its GTO model was the inspiration behind songs by the Beach Boys and Ronny and the Daytonas.

But Mr Henderson said GM had just not been able to make Pontiac work.

"We didn't think we had the resources to get this done from a product perspective," he said.

Falling sales

GM said it also wanted its main union, the United Auto Workers, to accept shares in the firm in exchange for cancelling 50% of the $20bn the firm must pay into a union-run healthcare trust.

The Pontiac brand has been in existence since 1926

GM also said it would reduce the number of its US dealerships by 42% from 6,246 in 2008 to 3,605 by the end of 2010.

"This reduction in US dealers will allow for a more competitive dealer network and higher sales effectiveness in all markets," GM said in a statement.

After all the proposed changes, existing GM shareholders would own only 1% of the firm.

'New path'

Like US rivals Ford and Chrysler, GM has seen sales fall sharply in its core home market in recent years, a decline that has intensified as the recession has continued.

The White House's car industry taskforce said it welcomed GM's latest announcements, but added that the government had yet to make a decision regarding the carmaker's proposal that it exchange half the current loans for a 50% stake in the firm.

"The interim plan that GM laid out in this filing reflects the work GM has done since 30 March to chart a new path to financial viability," it said in a statement.

"We will continue to work with GM's management as it refines and finalises this plan and with all of GM's stakeholders to help GM restructure consistent with the president's commitment to a strong, vibrant American auto industry."

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