Joel Ramsey

My local news agency is saying General Motors is offering employee discounts to non-employees through July 5th. The savings on some cars is supposedly near 8K off the sticker. I hope GM and Ford can pull out of their death spiral. Even though I'm not a huge American car fan, it would devastate our economy if one or both of these giants fell. My brother lives near Detroit and he's constantly telling me about businesses going under in his area who sub-contract for the Big Three. Toyota is even talking about raising the price of their cars to help ailing American car sales.

Jedi54

iTrader: (7)

Yikes, Toyota's prices are ALREADY high enough!

Serious times call for serious measures. If offering these kinds of discounts helps them out, then I'm all for it. I'm not a huge American Car fan but I would REALLY love to see Ford and GM recover from their current trend. They do make some amazing vehicles on ocassion. (not to mention ford OWNS Mazda!)

T.T.

Why would Toyota want to help American car sales?

Jedi54

iTrader: (7)

Numerous reasons:

- You'd be amazed at how creative your design team gets when they have competition.
- Provides your a benchmark of what works / doesn't work
- Toyota knows it cannot handle the demand all on its own
- Don't some of the car sompanies rely on each other? Isn't the new Pontiac Soltice's engine basically a tuned down version of the celica's?

Above all, they might just realize how catastrophic it would be to lose some of those automakers. It would have an effect on the japanese economy as well.

jlegendls

I bought my car under the ford discount b/c ford owns the US divison of Mazda. so I got an s-plan discount.

RX-GR8

nice. :D

Thetitanium8

No I believe the soltice is the N/A version of the cobalt 2.4 liter.
http://www.caranddriver.com/article....&page_number=1

Japan8

I think you were thinking of the Matrix/Vibe... Toyota and GM working together.

Don't forget about things like Ford of Europe, Ford of Australia, Opel, Jaguar, Volvo and so forth.... Ford and GM own all these companies as well. We wouldn't want to see them all go down the tubes or MAYBE auctioned to the highest bidder... Hyundai might buy them

mkaresh

GM lowered the total rebate on most cars by $1500 for this month. GMS = Invoice - 3% of MSRP + $75. So for cars that you could buy near invoice anyway break even for GMS pricing is about an MSRP $40,000.

My price comparison site gives GMS pricing for most GM models equipped to spec, if anyone's interested. (See sig for url.) I'm not aware of any other site that does this.

Joel Ramsey

Imagine the backlash Toyota would receive if they were perceived as the reason GM went out of business. When my brother moved to Detroit in 1990, that was right when the Japanese really took a juicy bite out of the Big Three's pie. Autoworkers lost their jobs by the thousands and were vandalizing foreign cars left and right and some people even lost their lives simply because they were driving Japanese cars. Toyota realizes that if GM goes under so could the US economy. I'm led to believe Toyota cares about America because without America, Toyota would have learn to build bicycles. :D

GotBass

When you you have a heavily demanded product you can increase profits more easily by raising prices rather than increasing production.

Think Ferrari. They make a whole lot of profit on each car. They could sell a lot more 360/F430s for $75,000 and only make a little profit on each car but overall they would make a lot less money.

draco067

If anyone's interested, theres a book by Micheline Maynard called "The End of Detroit: How the Big Three Lost Their Grip on the American Car Market" that talks about foreign vs. domestic manufacturers and how differently they operate. It's a couple years old at this point, but its still a good read.

blue streak

This "employee discount for all" is a very bad thing. GM has been consumer discount crazy ever since 911 and the rise in gas prices, and yet there is nothing in their business plan to change their product line up so they can stop the trend. They are still planning to concentrate on the truck and SUV segment. In fact, I read a quote on CNN from a GM product specialist saying that he thought there was still room for growth in trucks and SUV's. The fact is, American car companies do nothing but lose money on small cars because their profit margins are so thin. So they gravitate toward larger vehicles because they are the only ones that make them any kind of profit. The problem with GM is that they are discounting American companies right out of business. Ford and DC are forced to lower their prices every time GM does so. It's next to impossible to make money in that kind of market.

MTLbroker

That's because a lot of employees will soon become non-employees...... 25,000 to be precise. Just announced with a list of plant closings. Too bad. They really butchered this company.

snizzle

I'm hoping GM catches itself at some point here. I'd hate to see them die given all the good things that come out of Detroit from them. I actually think the discount is a good thing for them because most people could probably get the price further below the discount price with a little haggling anyway. Well, unless you buy a Saturn

AbusiveWombat

GM wouldn't need to discount their cars if they were exciting. The problem is that their cars suck. They're consistently at the bottom for every comparison test. I'm not sure who is to blame (engineers, designers, bean counters, management) but they certainly don't know what the public wants. And they're going to find that the truck and SUV markets are quickly going to dry up when Toyota releases their hybrid full-size truck. Nissan is already taking away a big portion with the Titan/Armada. Honda is going to take some away with the Ridgeline. Now you add a hybrid Toyota....it doesn't look good at all for GM. Especially when their best ideas are the GM badge and the HHR (yuck!).

Joel Ramsey

I don't want to upset any union members in this club but the UAW is playing a large part in this fiasco. They fought hard in the fifties for unprecedented wages and benefits when GM could afford it. With the average GM employee making 110K per year plus benefits, it's no wonder they are dying. Unless the UAW accepts cuts in pay and benefits, GM will die. Right now, GM is loosing $1500 per vehicle just to pay for healthcare.

As far as I know and correct me if I'm wrong but the Japanese do not allow unions in their domestic plants. I'm all for the employees getting a good wage and benefits but there is a logical limit.

Aseras

maybe they should stop selling **** and come up with some worthwhile products? Screw cheap give me quality and durability. Stop making disposable cars and plastic toy trucks and stupid niche products and develop for the masses again.

NAVILESRX8

iTrader: (1)

Their MSRP's are pretty even with the Fords/GMs/Chryslers....it's just that the Domestics give their cars away with huge discounts.....

snizzle

hmmm.... time for a GTO????

Japan8

I am not 100% sure if they have unions or not in Auto plants... probably do. However, Japanese unions don't function anything at all like US unions. They don't strike and they don't fight with management... it's not a "Us Vs Management" mentality, but rather a cooperative effort...

shelleys_man_06

The UAW is a bunch of douche bags. GM is not dying, they're just frustrated with the fact that they've lost at least $1 billion because it costs about $1500 in healthcare per vehicle produced. That's ridiculous. I'm all for sharing the wealth, but GM, Ford too, cannot afford to pay everyone they way they want to. They're pretty much paying for retirees who worked probable 70 years ago. Remember that these companies are over 100 years old, so they're paying a lot of people. However, what the UAW demands is not cost effective. They need to remember they're employees, even if they're in a union. If I were Wagoner, and an ******* (I got 1/2 that right), I'd fire everyone and replace them with children. Am I wrong? Hell no. Children here are fat and lazy. It's time to put them to work, like a forced co-op program or something like that. Fat kids make me sick, and they need exercise.

Anyway, it's pretty awful that GM has to cut so many jobs, and it's not just in the U.S. Apparently, they're cutting jobs overseas in Europe (Opel and the like). About 25,000 here and 12,000 over there. Like I said, GM cannot afford to pay everyone for their healthcare, retirement pension, etc. Foreign car companies are lucky; they only need to pay around $200-$300 per vehicle in healthcare costs. In Japan, healthcare costs are regulated closely by the government.

If worse comes to worse, other than hiring fat kids, all manual labor could be moved overseas, or across the border in Mexico. ¡Viva la General Motors!

As for these incentives, I'd hope for it to make a sales impact, which it probably will for the first couple of weeks, maybe a month or so. Since the announcement of cutting the blue-collar jobs, the Dow went up some, which is expected.

Fanman

I think unions suck too, but I would lump the GM executives in there as well. The last thing I would want to see is the low level emplyees take 20%-30% pay cuts, only to see the executives get 20%-30% raises. This has been the norm in the airline industry. It's BS. More coporate greed from the people who set policy (the executives).

djgiron

Well Ford is not in the GM slum, hell neither is DC, ford made over a billion last year and DC is finally selling good vehicles again. GM needs to fire all their designers, management and start hiring some young new talent. They have 1 good division (cadillac) and 1 good car (Vette) the rest are ***-ugly and have been for years and years. It is next to impossible to get a manual transmission, just that crappy 4sp auto they made in the 70's. And they are dropping the one good thing they had going for them, the rear drive Zeta platform. Hey GM we are all sick of ugly front drive cheap quality cars! Hell Hyundai's are better quality nowadays and that is pathetic. What they are not seeing is that people will pay more for a better quality car (see toyota). GM also is going backwards, most car companies starting out (Hyundai for instance) with cheap (quality/price) cars to make some money so they can start upgrading their products, not GM they went from one of the best to getting worse. As for Toyota raising prices, if the american consumer see that GM is going to go under, the Gov will step in and raise tarrifs on imports to try and save the company (remember GM is the second largest auto maker and an american icon) which will cut into toyota's sales. If Toy does it themselves, they will at least be in control of what happens to their prices/sales.

snizzle

Good point, no way does the government let GM die from strictly a US economy standpoint.