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Ford to Extend Discounts Through Sept. 30


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Link: http://news.yahoo.com/s/ap/20050901/ap_on_...loyee_discounts

Thu Sep 1,12:29 PM ET

DETROIT - Ford Motor Co. is extending its popular employee-pricing discount plan through Sept. 30, a spokesman said Thursday.

The discount, which allows customers to buy 2005 vehicles and some 2006 vehicles at the same price offered to employees, was scheduled to end Sept. 6. Ford is following General Motors Corp., which announced last week that it would extend its employee-pricing discount through Sept. 30.

Ford spokesman Jim Cain said the details haven't been announced, but the automaker might pull back the employee-pricing discount from some 2006 model-year vehicles. Ford applied the discount to the 2006 Ford Escape, Ford Expedition, Ford Econoline and Lincoln Navigator last month. GM included some 2006 full-size trucks and sport-utility vehicles in its program last week.

Cain said the program has been helpful in reducing 2005 inventory, but Ford wants to rely less on incentives in the 2006 model year.

"We need to move beyond this. We've been pretty consistent in saying this shouldn't become an everyday program," Cain said.

GM was the first of Detroit's Big Three automakers to offer employee prices for all consumers in June. Its sales shot up 41 percent that month and more than 19 percent in July. Ford and DaimlerChrysler AG's Chrysler Group followed with employee-pricing plans in July.

Chrysler executives said Wednesday they haven't yet decided whether to include 2006 model-year vehicles in their program. Chrysler's employee discount is in place indefinitely on 2005 vehicles.

In a recent note to investors, Merrill Lynch analyst John Casesa said GM's sales likely will be down in August because the employee discounts have cut dealers' inventories. But he said Ford still had enough inventory in stock to see sales increase in August. Ford's sales jumped 36 percent in July thanks to the employee-pricing discount.

Automakers were scheduled to report August sales figures later Thursday.

The employee-pricing programs have helped the automakers achieve near-record sales. The industry reported a seasonally adjusted annual sales rate of 20.8 million units for July, the highest since 21.8 million in October 2001, according to research firm Autodata Corp.

But analysts say sales will likely drop this fall because the discounts pulled ahead demand for vehicles.

Ford shares were down 26 cents, or 2.6 percent, to $9.71 in midday trading on the New York Stock Exchange. GM shares fell $1.55, or 4.5 percent, to $32.64, and DaimlerChrysler shares were down 55 cents, or 1.1 percent, to $51.13.

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