General Motors Corp. (NYSE: GM) is in such dire straights that it said Tuesday it is bringing back "employee pricing" to almost its entire 2008 auto lineup. We're not talking a few Chevy models here, but all GM models save a few truck ones. Like Doug mentioned this morning, the automaker is in a deep funk and it's doubtful that any incentive like the previous employee pricing ruse will help.So, what's an alternative? If it costs the automaker more to have bloated, non-moving inventory sitting on dealer lots, how about forgoing the employee pricing schtick and giving away slow-selling models at cost? Not invoice, but cost? Sounds audacious, but these are audacious times in the auto industry. GM is even giving away employee pricing on a handful of 2009 models. That's great, but 2008 models need more extreme measures. Customers, after all, don't exactly have the best perception of U.S.-made cars this year.
In general, employee pricing is 10% less than the invoice price of a vehicle. GM will need to cut deeper than that to reach out and get its glut out of dealer hands and into the hands of customers. Nothing speaks to the average American consumer like a cheap price -- nothing. The employee pricing incentive was very popular in 2005 when it was offered to all consumers, and it even caused the competition to roll out similar pricing. This time, GM needs to get innovative and unveil a new, better concept if it's serious about moving inventory -- even SUV inventory.
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Reader Comments (Page 1 of 1)
8-20-2008 @ 2:16PM
Gumby said...
Brian
Do you own Big Oil stocks?
8-20-2008 @ 2:17PM
Brian said...
-- Sigh--
No -- I own zero Big Oil stocks.
Thanks.
8-20-2008 @ 3:25PM
Gumby said...
Brian
Do you really want to see GM go bankrupt or what? Or are you just getting personal?
8-20-2008 @ 3:26PM
Gumby said...
One of the big reasons GM is in deep trouble is that the savings from recent UAW concessions on health issues will not kick in until 2010 at soonest. Why dont you explain this to readers?
8-20-2008 @ 3:30PM
Gumby said...
Brian
Dont you realize that jumping on GM's grave serves no purpose but to line brokers' pockets as they will be free of their liabilities toward their retail investors who are betting on GM's turnaround. If the brokers get a whiff of a possible GM turnaround, they would buy up GM stock. It is as simple as that.
8-20-2008 @ 4:02PM
Gumby said...
There must be many GM shareholders who bought GM shares at much higher prices like in the 50's. Their brokers are crossing fingers that GM will go bankrupt so they can wipe off liabilities owed to GM shareholders holding GM stock in street name.... Now, You tell me who you are working for ? brokers or retail investors
This is very important question you gotta answer..
8-20-2008 @ 4:07PM
Jack said...
I think I am correct that employee pricing is below the dealer invoice price. That is, during the last employee pricing deal GM had to reimburse the dealer for the difference in what the dealer sold the vehicle for (pursuant to employee pricing) and what the dealer actually paid for the vehicle (invoice cost). Therefore, your idea for GM to sell "at cost" rather than at "employee pricing" is uninformed adivce.
Thanks, Jack
8-20-2008 @ 8:03PM
winslow said...
GM needs to make a bold move: offer 50% off all low mileage cars in inventory for the next 60 days. Once these dinosaurs are slashed from inventory, GM can concentrate on cars of the future that get better mileage.
8-20-2008 @ 5:13PM
Joe Betz said...
A recent comment by Jack indicated that if GM sold its cars at cost rather than at employee discount it would raise the cost to the buyer. I think Jack may be confusing dealer cost with GM's cost, in which case I would think the consumer's price would be less than employee price, not more.
8-20-2008 @ 5:52PM
want to buy american said...
This time around this is just a scam, GM has raised their MSRP by about 10% starting yesterday. Thus the employee price is the same old MSRP!
Good luck!
8-20-2008 @ 11:49PM
russell said...
THIS IS WHAT IS WRONG with this country. If the author of this article had researched before he wrote this piece. Free speach is great but lets verify the intelligence of the author before believing. I work at a Chevrolet dealership in California. You can buy a 2008 Chevrolet Silverado that has a sticker price of 30,000 for 26500 and then also receive 5000 dollars in rebate. Thats the best selling number one in quility surveys and gets 20mpgIf you know your math Thats 21500 for a 30,000 vehicle > so please America dont read some of these authors that havent a clue about what thet are talking about Thank you and God Bless.
8-21-2008 @ 5:13PM
Russell said...
Hey Want to buy American Are you an idiot Gm hasnt raised prices I run a Dewalership Your an idiot Your probably for National heathcare too Go drive your Volvo with your pocket protector and hangout at Starbucks Your an Idiot
8-21-2008 @ 11:51AM
mc said...
Very simply put, if the public adhered to the slogan "Be American..Buy American" and supported our industries and workers instead of buying into the fallacy that foreign products are superior, and didn't read the bashers...That's right (referring to you Brian and your other buddy Doug), GM, would be back at almost $100 which it was at a mere 8 years ago. By the way..you must be real short on GM...huh?
8-21-2008 @ 10:39PM
mc said...
Hi Russell:
Sounds like you have anger issues. Before you call someone an idiot...learn how to spell. FYI..I don't drive a Volvo..never been to Starbucks..and I am retired...owned my own business...never wore a pencil protector. As we used to say "If your not part of the solution...Your part of the problem"...If you have a problem with the words...look them up.
8-22-2008 @ 1:41PM
Fred said...
I bought a 2008 CTS in late July. On a lark, I called my dealer to see if he could retroactively do anything for me. He indicated that the 0% financing I received actually is a better deal than the employee pricing, which I would have to finance at the going rate of about 4.5% - 5%.
Is this true that 0.0% financing is a better deal than the employee discount (assuming 10% down)? Is this employee discount in addition to 0% financing, or instead of it? Is he correct, or is there anything I can do to retroactively get a better deal?
8-22-2008 @ 6:46PM
Scott said...
In reference to "Want to buy American" 's comment ...... being with a GM dealership myself, I know that what "WTBA" said is completely false. This Incentive Program from GM is a great deal for the "non-GM" employee. It roughly equates to 5% less than invoice BEFORE the consumers choice of other factory incentives and has not been offered for a couple years now.
"WTBA" is a good example of the doom and gloom negative people that we have in society today. Frankly, he is either an "idiot" (as Russel stated)that spouts off info he can't back up or he is a malicious spreader of derogatory gossip that seems to plague this country today.
To help Fred out....way to much time has gone by for a dealer to "rewrite" a deal for you. As a consolation...depending on what you paid for the CTS, and considering that there are very little rebates to go with the GMS deal, the zero % was probably a better deal. Besides, no matter what you paid for the CTS, you are getting one of the best GM vehicles, in terms of value, quality and performance on the road today.
EVERYBODY watch the "SAVING GM" NBC Documentary special (Russell- see the IDL recording of it, show it to your salespeople). GREAT.
LONG LIVE GM!!
8-22-2008 @ 7:37PM
GM Employee said...
GM Employee Pricing goes wild I guess. I went to http://www.employeepricinggm.com/ and they had me a killer price in minutes. That pricing is better than our regular GM Employee Pricing. I know, I checked and I think GM Employee Pricing makes the big dif and plan on buying a new Suburban with the $5,000.00 cash back. The dealers told me they may extend the GM Employee Pricing out thru the end of September. That would be even better
8-27-2008 @ 9:50AM
Joe S. said...
GM has been stuck in a 60's business mentality since the 70's (yes, they were late to it even then). When in trouble - advertize and keep advertizing till sales accidentally climb.
8-28-2008 @ 4:55PM
Terry said...
GM has so many problems caused by rampant acquisitions of companies that didn't enhance their bottom line. They didn't keep in touch with what consumers wanted. And they didn't forcast the market trend to smaller more fuel efficient cars. And if they did forcast it, they chose to ignore the trend and continue building trucks and SUV's because of their high profit margin per vehicle. I hope the government does not bail them out and they have to find their own way out of the mess they have created. And why does Rick Waggoner still have his job as CEO?
8-29-2008 @ 9:27PM
Richard said...
I just bought a loaded 2008 CTS with a sticker price of about $48,000, for about $39,000, after the employee discount and a $2,000 rebate. Plus I got 0.9% financing for 36 months. I shopped around and looked at many imports, and this was the best deal around. The car is highly rated, pretty snazzy, and loaded with the best technology I've seen in any car.