Pontiac running on empty

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Is this the end of the road for Pontiac?

Media reports, citing anonymous sources, were circulating today that General Motors intends to scrap the 83-year-old brand as part of an accelerated reorganization plan to be unveiled next week.

As part of its effort to avoid bankruptcy, GM had already said it planned to reduce Pontiac to a niche brand, perhaps represented in showrooms by a single model — the Australian-built G8 sports sedan.

In a statement today, GM said that “contrary to media speculation, General Motors has not announced any changes to its long-term viability plan or to the future status of any of its brands.” And a week ago, newly minted GM Chief Executive Fritz Henderson branded as “speculation” reports that the automaker would consider killing or selling the Pontiac marque.

It should be noted, of course, that the latest reports surrounding Pontiac haven’t claimed that GM “announced” it would get rid of Pontiac, only that it plans to reveal its intention to do so next week. So the GM statement amounts to a bit of a non-denial denial.

Edmunds.com, for one, wasn’t buying it. “Pontiac is Dead” was the headline on a report rushed out late this morning. The demise would come even as the G8 was bringing back fond memories of the brand’s performance-car past.

“Just as the G8 reawakened our interest in 83-year-old Pontiac, the brand falls victim to bad times and old mistakes,” lamented Daniel Pund, senior editor of Edmunds’ Inside Line.

Pontiac’s U.S. sales peaked at just a shade under 900,000 in 1978 — the year after the brand peaked in the popular consciousness when Burt Reynold drove a Trans Am to stardom in the hit film “Smokey and the Bandit.” Pontiac’s U.S. sales fell to 267,000 last year, and it currently accounts for about 2% of the U.S. car market and 11% of GM’s total sales.

Pontiac, originally founded in 1909 as the Oakland Car Co. in Pontiac, Mich., is credited by many for launching the muscle-car era in the U.S. when it introduced the GTO in 1964. The brand’s identification with power and performance — not to mention low gas mileage — is a liability for GM given the environmental proclivities of the Obama administration, which is keeping the automaker on life support with billions in government loans.

“Pontiac has a proud performance and muscle car history, and that’s reflected in its current model offerings, which is perhaps why it’s on the chopping block,” said Jack Nerad, executive market analyst for online auto site Kelley Blue Book.

“I think there is still a market for performance-oriented American-brand vehicles, but that doesn’t necessarily fit in with political correctness.”

Pontiac hasn’t helped its cause over the years by diluting its muscular heritage with image-blurring vehicles such as minivans and the Aztek crossover. The latter, though beloved by some, regularly makes lists of the all-time ugliest vehicles.

One potential roadblock to discontinuing Pontiac is the cost of buying out dealers who depend on the brand. It cost GM more than $1 billion to terminate its Oldsmobile brand earlier in the decade.

There have also been reports that GM wants to be rid of its GMC division, known for pickup trucks and SUVs. But talk is that it would be cheaper for GM to do away with Pontiac than GMC.

That’s because there are so few stand alone Pontiac dealers -- most are in Buick-Pontiac-GMC setups, and are not that important to dealer profitability. GMC, on the other hand, is the biggest player in those dealerships.

Speaking of profitability, Pontiac is rumored to be a money loser for GM, while GMC is in the black.

-- Martin Zimmerman and Ken Bensinger