GM Extends Employee Discounts Promotion

Detroit, General Motors Corp. is extending its employee-discount program until Sept. 30 because of its success. The program began on June 1 and was supposed to end Sept. 6. Instead, the company is extending its length and including certain 2006 models. Previously, only 2005 models were eligible for the promotion.

Some Wall Street analysts believe the idea may not be a very good idea because it is lowering GM profit margins, which are already low or nonexistent. GM officials, however, have said the costs of the current promotion are nearly identical to other deals offered before June 1.

The promotion seems to be working quite well for sales. For the first two months of employee discounts, GM’s U.S. sales rose 42% the first month and 20% the second. There has been some talk, however, that August sales may have decreased as much as 10% because of depleted inventories.

Other car companies have jumped on the bandwagon. Ford Motor Co. and DaimlerChrysler also have employee discounts for everyone and are expected to extend their programs through Sept. 30, following GM’s lead.

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