GM (GM) likes its "employee pricing" incentives so much that it is going to extend them through the end of September and make them available on more models.
Good new. Bad news. Clearly GM is selling more cars that it might have if it was charging "retail" for all of the same models. The move clears out inventory, much of it last year’s models, and may help dealers who are having trouble moving cars. It is an especially good way to to SUVs and pick-ups which are of interest to fewer and fewer buyers.
The problem with the program is that it plays to one of the most idiotic axioms of business which is "lose money on every unit and make up for it on volume." It is almost impossible for GM’s North American operation, which has to be losing money on every vehicle its sells, to get a financial benefit from the program.
It does allow GM to push cars off the lot so it can ship more products that no one wants to buy.
Douglas A. McIntyre
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