General Motors is to phase out one of its oldest brand names - Pontiac.
GM will also cut a further 21,000 jobs in the United States this year, as it aims to meet a deadline of 1 June to revamp its business.
The automaker has to complete its restructuring by then to gain government loans needed to avoid bankruptcy protection.
After shedding Pontiac by the end of 2010, GM will focus on its Chevrolet, Cadillac, Buick and GMC brands.
The company also said it hoped to halve its debts by persuading bondholders to swap $US27 billion of bonds for shares. GM also wants the government to swap half its current loans for a 50% stake.
The decision could have major implications for jobs in Australia, because Holdens made there are rebranded as Pontiac and sold in the United States.
The government has so far given GM $US15.4 billion in loans.
Shares in General Motors rose 24%, or 40 cents, to $2.09 after the announcement on Monday.
Chief executive Fritz Henderson said the decision to eliminate Pontiac had been tough because of the 83-year-old brand's heritage.
The BBC reports the brand was known for models including the Firebird and the Trans Am. Its GTO model was the inspiration behind songs by the Beach Boys and Ronny and the Daytonas.
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.
GM has already cut 10,000 US jobs this year, announced in February. Following the completion of the latest reductions, its American workforce will be reduced to 40,000.
Impact on Australian plant
The ABC reports a Holden car plant at Elizabeth in South Australia now faces an uncertain future.
The plant makes the Pontiac G8, but production will now be phased out by the end of the year.
The Pontiac G8 was meant to be Holden's financial saviour.
The company had hoped to export 30,000 of the cars to the US each year, helping boost export revenue by $A1 billion dollars.
Only half of the 25,000 G8s delivered to the United States have been sold to date.