GM warns it may phase out brands

GM is currently investing $3bn (£1.6bn) in new Buick and Pontiac models

General Motors has said it may phase out one of its weaker car brands if sales fail to meet targets.

The US giant's vice chairman Bob Lutz did not say which brand might be discontinued, but described Buick and Pontiac as "damaged brands".

His comments come a week after falling sales prompted General Motors (GM) to announce a profit warning.

GM expects its earnings for 2005 to be down by as much as 80%, as it struggles to turn its fortunes around.

'Righting the ship'

Mr Lutz, who joined GM from Chrysler in 2001, said Buick and Pontiac have been damaged by a traditional lack of investment and ongoing falling sales. The company is currently investing $3bn (£1.6bn) in new models for the two brands.

The threat of [GM's] bankruptcy is absolutely out of the question GM vice chairman Bob Lutz

He said that if some GM brands fail to meet sales projections, "then we would have to take a look at a phase-out".

Mr Lutz added: "I hope we don't have to do that. What we've got to do is keep the brands we've got."

Removing any of GM's brands would likely mean plant closures and a reduction in the group's workforce.

GM has already discontinued one of its brands, stopping production of the Oldsmobile last year.

Mr Lutz said GM would record flat US sales for March.

Despite debts of $300bn across the GM group, he said the threat of bankruptcy was "absolutely out of the question - totally out of the question", adding that the company was "taking the necessary steps to right this ship."