GM ending employee discount promotion.

[Quiggs]

GM ending 'employee discount' prices
No. 1 automaker will shift to lower costs rather than incentives next week -- report.
July 27, 2005: 8:16 AM EDT

NEW YORK (CNN/Money) - General Motors Corp. is set to end its popular and successful "employee discounts for everyone" promotion next week, and move to more emphasis on permanently lower sticker prices instead of big rebates, according to a published report Wednesday.

GM's strong sales in June and so far in July have left it with depleted inventories of the 2005 models that the offer applied to, according to company officials earlier this month, so the move is not a total surprise. But generally, summer sales promotions to clear previous model year vehicles remains through August and sometimes into September as dealers try to make room for the new models.

GM spokesman Jeff Kuhlman told the paper the employee discount offer will end Aug. 1.

It is not clear how Ford Motor Co. and Chrysler Group will respond. Both of them started their own employee pricing program in July, a month behind GM, and they have larger inventories of 2005 models. But the two have also generally followed GM's lead on incentives.

GM has been signaling plans to move to lower sticker prices rather than setting sticker prices high and using cash-back and other incentives to lure customers into dealer showrooms.

One dealer familiar with the automaker's 2006-model program told the Journal said GM plans to lower prices on as many as 46 vehicles. For example, the dealer told the paper the 2006 Cadillac DTS be priced as much as $6,000 below the sticker price of the 2005 Cadillac DeVille model it replaces, even though the newer model has undergone a major redesign.

Kuhlman confirmed that GM will cut prices on many of its upcoming 2006 model-year vehicles. He said GM wasn't ready to announce which vehicles would be affected or what the new prices would be.

U.S. customers have generally come to expect cash back, below-market interest rates or other incentives when they buy Big Three vehicles. The challenge for GM from its new pricing program is to wean customers away from incentives. If it needs to offer incentives on top of lower pricing, it will mean more profitability woes for GM.

The prevalence of incentive offers in the past have limited the cost of the employee pricing program. GM officials estimate that customers were paying $300 to $400 less per vehicle with the employee pricing offer than they would have paid with earlier incentive programs, even though the vehicles are generally selling for thousands less than list price.

But that cost is still expensive, since GM is likely to have sold more than 1 million vehicles in the United States in June and July, a period during which the No. 1 automaker is losing money on its core auto operations.

The Journal reports that part of GM's new lower-sticker strategy is attempting to extend no-haggle pricing -- a key element of its employee-discount promotion -- into its everyday selling strategy. GM has used this approach on its Saturn brand, but that nameplate makes up only about 5 percent of GM's overall sales.

GM lost another $1.something billion dollars in Q2, making total year-to-date losses $3.2B. GM sucks at life.

[CHEESE-TACULAR]

Originally Posted by Quiggs

GM lost another $1.something billion dollars in Q2, making total year-to-date losses $3.2B. GM sucks at life.

how true. and just when ford stopped offering a free computer, monitor anf speaker system with every focus too-and started offering their employee discount...he he he

[spi-ti-tout]

Originally Posted by Quiggs

GM lost another $1.something billion dollars in Q2, making total year-to-date losses $3.2B. GM sucks at life.

And that too, being beaten at it by the Japanese

[Esperante]

Too bad GM will likely die.
What I hope will happen is all the brands brought together under GM (Saab, Hummer, Chevy, etc.) will all split apart and be bought up by other companies, private owners, etc. With all the brands together under the GM name GM is creating competition for itself by giving every single brand every single type of model you can choose from. If they all parted there would actually be real pricing and design competition.

[CHEESE-TACULAR]

Originally Posted by spi-ti-tout

And that too, being beaten at it by the Japanese

forgive me but are you saying thats a bad thing

[Esperante]

Originally Posted by spi-ti-tout

And that too, being beaten at it by the Japanese

Besides the fact that Chevy sold the most cars in the US.

[spi-ti-tout]

Originally Posted by CHEESE-TACULAR

forgive me but are you saying thats a bad thing

Not really. I'm just saying that being beaten by natural competition (American brands - Ford, DaimlerChlysler) is ok, since they are all American. Nethertheless it is still 0wn@ge, for something quite so big.

But to be beaten by brands from JAPAN like Toyota and Honda is ridiculously insane. You're being beaten by companies far "inferior" to you, and that too which have just popped up from nowhere, and to that I might also add the literal side - the other side of the world? Now, that's double 0wn@ge.

As far as your question goes, it will be nice to see a new car revolution where the people who actually know how to make cars overtake someone who fits their cars with chicken-power instead of bhp. It was getting boring to see GM being this evil mastermind of America's car industry and looking forward to seeing the real car wars now (as Esperante rightly said) .

Originally Posted by Esperante

Besides the fact that Chevy sold the most cars in the US.

And that's triple-0wn@ge, mind you.

[Matra et Alpine]

Originally Posted by Esperante

Besides the fact that Chevy sold the most cars in the US.

McDonalds quarter pounders outsell prime Scottish aberdeen angus steaks too.

so ????

[Matra et Alpine]

Originally Posted by spi-ti-tout

Not really. I'm just saying that being beaten by natural competition (American brands - Ford, DaimlerChlysler) is ok, since they are all American. Nethertheless it is still 0wn@ge, for something quite so big.

Sometimes the myopia is awful !!
Chrysler was bought out and is owned by German company.
Ford's car designs are taken from the drawing boards of Eureop 2 years later.
GM does the same
Where is this "natural competition" - we live in a multi-national world - yor competition is the producer of the best PRODUCT not hte nearest factory, that ended decades ago.

But to be beaten by brands from JAPAN like Toyota and Honda is ridiculously insane. You're being beaten by companies far "inferior" to you, and that too which have just popped up from nowhere, and to that I might also add the literal side - the other side of the world? Now, that's double 0wn@ge.

talk abotu ownage..............
Honda -- inferior - what a load of BS !!!
You need to look into Honda engineering and reliabilty and build quality before typeing any more PLEASE.
I think we showed a while back that the Toyota "inferior" models on recalls were coming from the US factory. IS that "natural competition" ???
Being nationalistic just blinds you from the truth and if blinded thn it doubly hurst when the crunch comes.
Everything you said was gettign spouted by the British motorbike industry in the 60s. An industry which owned the WORLD of motorbikes. Gone because they didnt' think multinationally and customer-centric and relly believed "british is best"

As far as your question goes, it will be nice to see a new car revolution where the people who actually know how to make cars overtake someone who fits their cars with chicken-power instead of bhp. It was getting boring to see GM being this evil mastermind of America's car industry and looking forward to seeing the real car wars now (as Esperante rightly said)

Now you're just looking silly.
What are you on about ????

And that's triple-0wn@ge, mind you.

[Matt]

Originally Posted by Esperante

Too bad GM will likely die.

I think GM still has quite a ways to go before dying.

[Matra et Alpine]

Originally Posted by Matt

I think GM still has quite a ways to go before dying.

True.
But the market's not a believer in them
http://moneycentral.msn.com/investor...Symbol=US%3aGM
They'll do all right for quite a while as 90% of the stock is in instituinbal ownership - oh I wonder why the recent news on the fuel efficiency legislation stateside is going the way it is !!!!

debt/equity ratio of 11ish aint great and the gross margin looks good IF they can control other costs and get the profit away from the red.

All thei outlooks are looking worse too with sales below 5 year averages

But hell it's STILL a lot of cash flow that isnt' going to find a home anywhere else for a long long time, so they'll still be able to sell things - but making profits ?????

[Niko_Fx]

Originally Posted by Matra et Alpine

McDonalds quarter pounders outsell prime Scottish aberdeen angus steaks too.

so ????

Oh man... If I didn't love my signature so much I would definitely put this.

[CSL]

Originally Posted by Esperante

Too bad GM will likely die.
What I hope will happen is all the brands brought together under GM (Saab, Hummer, Chevy, etc.) will all split apart and be bought up by other companies, private owners, etc. With all the brands together under the GM name GM is creating competition for itself by giving every single brand every single type of model you can choose from. If they all parted there would actually be real pricing and design competition.

GM isint going to die anytime soon. Every corporation has bad years and the auto industry is no exception.

[scubasteve87]

I do believe Ford had major issues within the last few years and many predicted their death as well but they survived, GM needs a management makeover and they'll be alright. There are still a ton of Americans who, like it or not, will only buy American, even if the product is sometimes far inferior

[GT F1]

GM will probably be bought by DCX or Ford (more likely Ford imo). Or maybe it will recover, who knows?