News

[Bimmer325]

GM Extends Employee-Discount Plan a Month, People Say

Aug. 2 (Bloomberg) -- General Motors Corp., the world's largest automaker, will extend a program that gives employee discounts on cars and trucks to all customers, people familiar with the company's plans said. The move is a reversal of GM's intention to let the plan expire.

The offers will be in effect on 2005 models through the Sept. 5 Labor Day holiday, the people said. GM's offers, which began in June and were extended through July, expired yesterday. GM yesterday said it was cutting prices on its 2006 models as part of a long-term strategy to increase sales and lessen reliance on incentive programs.

The reversal comes after competitors Ford Motor Co. and DaimlerChrysler AG's Chrysler unit extended their own employee- pricing promotions. Those automakers began their programs in July. Ford yesterday announced its extension, which lasts until Sept. 6. Chrysler decided to extend without an expiration date, people familiar with the company's plans said yesterday.

"I'm not sure what the benefit is,'' Argus Research analyst Kevin Tynan said in an interview. "I think the dealers were happy to see the inventory sold down but they were happy to have it over with. Is it necessary?''

GM spokeswoman Deborah Silverman declined to comment on the automaker's plans. The company, based in Detroit, recorded a 47 percent increase in U.S. sales in June because of its promotion, in which customers receive the same discounted prices that employees get.

Changing Minds

The automaker changed its mind after Chrysler and Ford decided to extend, the people said. The official announcement is scheduled for later today when GM announces July sales results, the people said.

Ford Group Vice President Steve Lyons said in an interview yesterday that Ford will report a sales rise of about 35 percent for July because of its employee-pricing plan. Ford, of Dearborn, Michigan, yesterday said it also was cutting prices on 2006 models.

GM dealers were informed this morning of the decision in an e-mail, said Troy Ontko, president of Manchester, Michigan-based Autodollars.com, a Web site that tracks rebates for dealers and consumers. The rebates are for all 2005 models except the Chevrolet Corvette sports car, Hummer H1 sport-utility model and Pontiac GTO coupe, he said.

GM shares rose 4 cents to $36.86 yesterday in New York Stock Exchange composite trading. The stock is down 8 percent this year.

[Bimmer325]

Dealers say GM extends employee price discounts
Tue Aug 2, 2005 10:09 AM ET

DETROIT, Aug 2 (Reuters) - General Motors Corp. (GM.N: Quote, Profile, Research) is extending its popular discount program, under which it is offering anybody in the United States a new car or truck at the same price low price a GM employee would pay, dealer sources said on Tuesday.

They said the "Employee Discount for Everyone" program, which GM introduced on June 1, would continue through Sept. 6. GM declined immediate comment, however.

Ford Motor Co. (F.N: Quote, Profile, Research) and the Chrysler arm of DaimlerChrysler (DCX.N: Quote, Profile, Research) (DCXGn.DE: Quote, Profile, Research) -- which followed GM's lead by offering employee pricing last month -- have also extended the programs as they sell down unsold inventories of 2005 model-year vehicles.

Source Reuters.com

[azulSKY]

Dealers are going to struggle this time however, their lots have virtually no '05s left, at least around here.

[blackviper8891]

Definitely. My local dealer's car lot was almost completely empty. The truck lot still had some and the used lot was overflowing. The only thing they'll be able to sell are used vehicles.