General Motors Corp. (NYSE: GM) will offer customers wanting to buy its cars the same discounts as employees for another four weeks, according to Bloomberg News.The incentives, on most 2008 and some 2009 models, were to have expired today but, according to Bloomberg, "GM will continue the deals through the end of the month because the initial two-week offer boosted sales."
Of course, this is great news for consumers, particularly the few who are confident enough in their economic circumstances to be in the market for a new car. Maybe it will encourage people leaning toward a Honda (NYSE: HMC) or some other foreign automaker to give GM a second look or even a third one. Chances are, though, it won't do much to help.
As my colleague Michael Rainey noted earlier, imports accounted for 68% of all passenger car sales in the U.S., a new low for the Big Three. These are the vehicles that consumers stung by high gas prices are most interested in purchasing. Good luck in trading in your gas-guzzling SUV for a fuel-efficient hybrid. Many dealers are reportedly no longer interested in the big vehicles because their trade-in value has plummeted.
Overall, though, this is bad news for the company that for now is the world's largest automaker. GM and the other makers need to load up each car with so many incentives that their profit margins are continuing to erode. The problem with this strategy is that once you start it, it's difficult to stop.
General Motors probably will have to continue its employee pricing marketing program through at least the end of the year. Even then, it will not do the company's shareholders, who have seen their holdings decline more than 57%, much good. The automaker, though, has little other choice because its problems are so huge.











Reader Comments (Page 1 of 1)
9-02-2008 @ 7:11PM
hank said...
Who cares??!! As an ex-employee of GM who finally decided that your corporation is nothing but a joke, it would be wonderful to see you fall victim to your own egotistical mis-managed ways!! Burn in hell GM, burn in hell!
9-02-2008 @ 9:08PM
Floyd said...
Bring in cars like the Chevy Cruze quicker in to the US market. 2010 is to far away.
9-02-2008 @ 9:32PM
KB said...
Who gives a crap about GM or Ford? Since World War II workers of both corporations have continually thumbed their collective noses at the rest of the US working class population. Bragging constantly about their retirement benefits. Let'em go down the tubes. What real working class person can afford a Chevy Tahoe at a list price of $45-$50K? No one. Who needs a truck that can pull a house? Hey Chevrolet / Ford how about a truck that get 25 mpg and pull a moderate load of 4-5K pounds!!!!!
9-02-2008 @ 10:39PM
George said...
I was at a GM strore this past Saturday, in Nanuet, NY..(Caddy,GMC,Buick,Pontiac)...picked up a 2009 CTS, the place was mobbed, looked like everyone their was benefiting....
Support you country, drive American...
9-02-2008 @ 10:50PM
George said...
Went to a GM dealer in Nanuet, NY (Caddy,Buick, GMC, Pontiac) on Saturday, the place was a mad house, and got a great deal on a 2009 CTS...seems like they are benefiting.... Support your country, drive American....
9-02-2008 @ 10:53PM
Soph said...
It does not surprise me that they would go after their employees. Was there a rule against employees helping their sales? I bought a GM auto because I wanted a QUALITY, and RELIABLE vehicle. But, I found out that GM, the company, does not back it's products. Problems that should have been recalls, (such as engines with the wrong bolts) or at least be considered a manufacturer problem. That would be the case if they want to keep their customers. I loved my auto, and would like to continued to buy from them. But, since they don't back their product, I would NEVER buy another of their vehicles. That's what I tell all my friends, relatives, associates, etc. So, since they take advantage of their customers, and are losing sales that they could be getting, they should be happy that their employees are helping with their sales. GM is getting what it deserves, and should be glad that employees are trying to help them in the sales department.
9-02-2008 @ 10:53PM
Justin said...
this is directed to George. There is no such thing as buying American anymore look at where most of the parts come from in auto. Many parts are not made in the USA. While it is true they are usually assembled here in USA. Nothing is truly 100% American anymore.
9-03-2008 @ 2:13AM
Linda said...
I just read a list of the 11 most safest cars and NOT an American car or truck on the list. When America starts looking after me, then I'll support them, until then, I'll get the best deal for the money and unfortunately it's NOT American.
9-03-2008 @ 5:03AM
mike said...
as a gm retiree, i wouldn't give a D--m if gm went belly up, after they and the D--m union screwed the retiree's on their medical coverage and keeps getting smaller each day. and never get a cost of living raise for the one who live on a penion less then 1000.00 a month, try making your bill meet gm on that kind of budget. we do and have too. so go to H--l gm and take your d--m cars with you, and take the d--m union blood sucker with you. they don't give a damm about the retiree's either, just the ones who are still working and screwing thems too. so wake up america buy that non gm car they last longer too. i would if i ever had some extra money to buy one. h--l a doctor office call fee is more important then a car. since the medical deductables keep you in the hole. so fold gm and uaw i'll see you fat cats in he-- one day.
9-03-2008 @ 8:10AM
Financial Cents said...
I absolutely agree with most of the comments on this board. Overpaid union workers and incompetent management is really the cause of GM's likely collapse. Also, there is no place for greedy Unions in a globalized economy. It's just reality.
http://financial-cents.blogspot.com/2008/09/another-bailout-gm-wants-your-tax-money.html
9-03-2008 @ 2:41PM
winslow said...
How can anyone berate the unions when management is pulling in millions per year, has tremendous benefits, options, and retirement packages....plus they have time to play golf and "discuss" business.
9-06-2008 @ 8:13AM
ryan said...
Well maybe if the greedy unions didn't try to suck every dollar outof the companies, US automakers would not be in this situation. Itis pretty sad when a High School Dropout can start at $35+/hr crossthreading lugs nuts on a new car and not have to pay anything forfull health care and a College Nursing Grad will only get about$22/hr and have to pay big bucks for health insurance at the hospitalthey work at. Unions greedy demands drove jobs to Mexico and Canada. When I hear you whiners in Detroit talk about no jobs, I say tough,you did it to yourself with your greed.
9-25-2008 @ 12:57AM
winslow said...
Until GM marks down every high mpg auto in inventory by 50%, any spectacular deals are anything but! Get rid of bloated inventory then start mass producing high mpg autos.