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GM will end employee pricing at month-end


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By Jamie LaReau
Automotive News / September 08, 2005


DETROIT -- General Motors told dealers Wednesday that it will not extend its Employee Discount for Everyone program beyond September, company officials and dealers confirm.

"It's just time for it to end," says an informed source. "We'll focus on our launch products."

The source says GM will begin running advertising this weekend emphasizing the program's end date and promoting new GM products and 2006 models.

A spokesperson for GM confirmed the program, which GM started in June, will conclude this month. The program includes all 2005 vehicles except the Chevrolet Corvette amd the Hummer H1. It also includes 2006 full-sized trucks and SUVs. Th H2 is the only 2006 Hummer included. But there are other 2006 GM products on which GM offers incentives.

"We're moving forward in executing our strategy around the total value promise," says GM spokesperson Deborah Silverman.

GM has promoted its version of value pricing as its "total value promise" for its 2006 lineup. It involves setting sticker prices closer to transaction prices while adding more features to vehicles.

Dealers say they're glad the employee pricing program is ending because 2005 inventory is low and they want to promote new models.

"We can't support that level of sales with this program," says Chris Cerrina, president of Saab dealership Parkfield Motors Inc. in Bergenfield, N.J. "With the volumes right now, I don't think it'd be fair to the consumer to continue it. I'm not upset at all with the ending of the employee pricing."

The higher gasoline prices also make it difficult to continue the program, says Gordon Stewart, president of Stewart Management Group in Harper Woods, Mich., which has several GM stores.

"It's tough to maintain that profit margin if there's a dent in the SUV market as the market shifts to smaller economy cars," Stewart says.

Both Cerrina and Stewart say the employee pricing program was a success. Stewart started June with about 800 2005 vehicles and today has 45 in inventory. Cerrina says he only has four Saab 2005 vehicles left on his lot.
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