Oct 27, 2013, 1:58pm ET

Bob Lutz reveals government ordered Pontiac's killing as part of bailout deal

Bob Lutz has quite a bit to say about Pontiac.

Bob Lutz, the outspoken former GM Vice Chairman, revealed in an interview Saturday that the Pontiac brand was killed off at the behest of the federal government. The surprising declaration took place during an "Inside the Motoman Studio” session at the Petersen Automotive Museum in Los Angeles.

According to Lutz, during the government bailout of General Motors following the Global Financial Crisis of 2008 and GM's subsequent declaration of Chapter 11 bankruptcy, the feds wanted the automaker to cut everything but two brands. Cadillac would act as the premium brand while Chevrolet would serve as the sole mass-market brand.

However, Buick was granted a reprieve when GM made a case for the brand's importance in China, where it remains GM's strongest nameplate. If Buick was killed off in the US, Chinese customers would lose interest, explained Lutz. GMC was saved by proving that there was a distinct set of buyers who would not cross-shop Chevrolet and that its trim and options provided a substantial profit margin.

Lutz further explains that he personally fought for Pontiac and that it was on its way to becoming a true performance brand with an all rear-wheel-drive lineup. In particular, the next Pontiac G6 was to share a platform with the highly acclaimed Cadillac ATS, but with the premium content stripped out and dimensions similar to a BMW 3-Series.

Unfortunately, GM was forced to admit that Pontiac had not made any money in the 10 years prior to its 2009 demise. The government then gave the automotive giant an ultimatum to either kill Pontiac or forgo the $53 billion bailout. Lutz does acknowledge the fact that for many years Pontiac's brand image was tarnished by badge engineering and excessive use of plastic body cladding.

The full interview and Q&A session can be seen in the video below. The revelations about Pontiac appear at 2:14:00.