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GM sets no-interest loans
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September 20, 2001: 9:01 a.m. ET
Program to counter sales slump covers 2001 models including Saab, Saturn
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NEW YORK (CNNfn) - General Motors is offering interest-free financing on all its U.S. car and truck models in an effort to boost sales in a slowing economy, further hampered by last week's attacks in New York and Washington, according to a published report Thursday.
GM's (GM: Research, Estimates) "Keep America Rolling" incentive includes interest-free financing on new vehicle loans of 36 months and 60 months on 2001 models, according to the Wall Street Journal. The program also covers GM's Saab and Saturn units, which are not usually included in incentives.
The company said the new plan will not substantially cut into its profit because it will replace existing finance incentive programs, the Journal reported.
"With a program like this, sometimes the savings could be up to $6,000 to $7,000," Lou Smith, general manager of a GM Houston dealership told the paper.
Auto sales at 5,000 dealers fell 23 percent this past Monday from the average of the previous four Mondays, and Tuesday's sales fell 38 percent, excluding results from Sept. 11, the paper reported, citing a survey by J.D. Power & Associates.
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"We know this is a difficult time to talk about an incentive program, but GM has a responsibility to help stimulate the economy by encouraging Americans to purchase vehicles, to support our dealers and suppliers, and to keep our plants operating, and our employees working" GM North American President Ron Zarrella was quoted by the Journal.
GM's move contrasts to Ford Motor Co.'s (F: Research, Estimates) decision to close five U.S. factories and cut its third-quarter production by 12 percent. Ford said the closings will result in a profit shortfall, while GM reaffirmed its earnings expectations earlier this week.
Other automakers have been critical of Ford's reductions. "I think it is our responsibility to try to do whatever we can to contribute to stability," Dieter Zetsche, the head of DaimlerChysler's (DCX: Research, Estimates) Chrysler Group told the paper "Not to over react...not to try to pre-empt shortfalls on the demand side with production cuts."
Prior to last week's attacks, Chrysler cut prices on many of its newer models and said its has no plans to change that program.
Shares of General Motors closed at $43.38 Wednesday. 
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General Motors
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