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GM Extends Employee Discount Program

August 2, 2005
General Motors is extending its popular employee discount pricing program into August. It had intended to end the program this week but a company spokesman said that because of competitive pressure from Ford and Chrysler, GM was extending the discounts into August.

• GM Offers Employee Prices to Spur Slow Sales • Car Prices: How Low Can They Go? • GM, Ford Look to Congress for Help • What Do the New Car Sales Add Up To? • Ford, Chrysler Jump on Car Sale Bandwagon • After a Horrible October, GM Cars and Trucks Go On Sale Again • Ford Extends Employee Discounts Through Sept. 30 • GM Employee Discount Sputters into September • GM Extends Employee Discount Program into August • Look Out! Not All Cars Are On Sale • Ford, Chrysler Join GM in Offering Employee Discounts • GM Gives Employee Discount to Anyone --- • Consumer Comments

Ford and Chrysler said yesterday they were extending their programs.

All three companies have experienced surging sales over the last month. When July sales figures are announced, it's expected they'll top 20 million vehicles, which would make July one of the hottest sales months ever.

GM reported heavy losses in the second quarter, due partly to the discount program. But at the same time, the discounts have cleared out GM's bulging inventory of unsold vehicles, freeing up capital and providing breathing room.

Ford has also experienced huge losses recently, in part because of the high cost of the employee discount program as well as zero-interest financing and huge rebates. Chrysler, on the other hand, is profitable, thanks to such popular models as its Chrysler 300.

GM and Ford must now come up with a strategy to shift from discounts to "value pricing," industry analysts say. GM calls its program the "Total Value Promise" -- an everyday low-price strategy. But making the transition won't be easy.

The employee discounts don't cover all models. For example, the GM employee-discount deal does not apply to the Chevrolet Corvette, Pontiac GTO and medium-duty trucks. The Corvette and the medium-duty trucks were also excluded from the June program.

Ford's exceptions include the hot-selling Ford Mustang, the Escape Hybrid SUV and the Ford GT sports car. The Lincoln Mark LT pickup also is exempt because it is only available as a 2006 model.

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