GM offers 'employee discount' to consumers

No. 1 U.S. automaker offers price break through Sept. 2 on most 2008 cars and trucks.

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By David Goldman, staff writer

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NEW YORK ( -- General Motors Corp. announced Tuesday it is extending the benefits of its employee discount to customers on nearly all of its 2008 vehicles and some 2009 models beginning Wednesday and ending Sept. 2.

As GM (GM, Fortune 500) begins to unveil its 2009 models, the sale serves as a way to clear inventory of this year's vehicles from dealers' lots. The nation's largest automaker by annual sales said the sale is also in celebration of the company's 100th anniversary.

"Every time we have a model year-end sale, we want to move out the old vehicles and move in the new ones," said GM spokesman John McDonald. "But the impetus behind this employee discount is our centennial coming up in September."

Employee discounts vary by model, but average about 10% below the manufacturer's suggested retail price, according to John Tews, an analyst with J.D. Power and Associates. GM's discount excludes all medium duty trucks, and includes only a few 2009 models, including the Chevrolet Cobalt and the Pontiac G5.

This is the second time GM has offered the employee discount to its customers. In 2005, the company offered the same deal, which gave the automaker a whopping 41% spike in monthly sales.

"This should be another win-win for GM and its customers," said Tews. "It will be tough to duplicate the spike from 2005 now, but if they get even half of what they got three years ago, that will be pretty good for the company."

GM's success in 2005 led fellow American automakers Ford (F, Fortune 500) and Chrysler to offer the same employee discount to their customers about a month later. Competitors could again follow GM's lead this year, especially as auto sales in the United States have slumped amid a difficult economic climate.

"This is a very tough, very competitive market," said Tews. "If GM has any success at all - and I think they will - you may see something similar from Ford and Chrysler."

Employee pricing may not save customers much more than other incentive programs, but it does lead to de facto "no haggle" pricing, which has been very popular with buyers in the past. Currently, only GM component Saturn offers "no haggle" pricing on an ongoing basis. To top of page

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