[Buckaroo]

Now Ford is joining the bandwagon.

[budster101]

This is your thread? Talk about lazy.

Ford, Too, Is Offering Employees' Price to All
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By JEREMY W. PETERS
Published: July 6, 2005
DETROIT, July 5 - It is a good time to buy an American car - or so Detroit's Big Three automakers want consumers to think.

On Tuesday, General Motors announced that it would extend to Aug. 1 its highly successful sales promotion, which offers vehicles for the same price that G.M. employees pay. Several hours later, Ford Motor said it, too, would begin selling most of its vehicles at the reduced employee rate. And Chrysler, the American division of DaimlerChrysler, is expected to announce details of an employee discount program of its own on Wednesday, when its sale begins.


Frank Polich/Bloomberg News
A G.M. dealer in LaGrange, Ill., promoted employee discounts.

Reed Saxon/Associated Press
A Cadillac dealer in Los Angeles offered an employee discount that could lower the price of an Escalade S.U.V. by several thousand dollars. The promotion caused G.M. sales to soar by 41 percent in June.
The announcements by all three add up to an aggressive summer pricing war among the domestic automakers. Last month, General Motors rattled the industry when it began the sale, which can drop the average sticker price on a vehicle by several thousand dollars.

Ford and Chrysler, initially reluctant to take the same approach as G.M., changed course after G.M. reported last Friday that its sales had increased by 41 percent in June over the month a year earlier.

Wall Streets analysts pointed out that G.M.'s program did what it set out to do - increase sales and reduce bloated inventories. But they cautioned that it is not a long-term fix.

In early June, after G.M. announced its price cuts, Ford responded by encouraging its employees to give their discounts to family members and friends, while Chrysler began an advertising campaign that compared the price of selected G.M. vehicles after the employee discount with Chrysler vehicles that were less expensive after rebates.

On Tuesday, Ford said it would begin the "Ford Family Plan," a sales promotion that allows every customer to purchase most of its vehicles at the price employees pay. When the employee discount is combined with other current Ford rebates, prices on many vehicles will be reduced by thousands of dollars. Last month, for a Ford Explorer with a sticker price of about $34,000, a customer would have paid about $30,000, with rebates. With the employee discount, that price would drop to about $26,000.

"We wanted to make sure our products stayed on consumers' shopping lists," said a Ford spokesman, David Reuter. "On average, it's very comparable to what G.M. has out there."

The program lasts until Aug. 1 and applies to all Ford, Lincoln and Mercury models except the Ford Mustang, Escape Hybrid or GT.

With both of G.M.'s domestic competitors now offering similar incentive programs this month, whether G.M. will continue to have the same record level of success it had last month is uncertain.

The employee price promotion has been a sales triumph for G.M., where auto sales and market share had slipped for much of the year. In June, G.M. sold more vehicles in any single month than it had since September 1986. That pushed its share of the American auto market, which has hovered around 25 percent this year, to nearly one-third, according to Autodata. In addition, the gains G.M. made in June drove up its sales for the first half of the year by 2 percent.

The long-term effects of such deeply discounted offers led some Wall Street analysts to ask if the Big Three are employing the right sales strategy. A Merrill Lynch analyst, John Casesa, said low pricing now could harm brands in the long run. "Longer term, the true return on G.M.'s investment will have to take into account its impact on future pricing power, margins and residual values," he wrote in a note to investors on Tuesday. "We are concerned that this everyday low price strategy has only set the domestic industry's starting price point a notch lower."

Mr. Reuter said Ford looked at its June sales, which were down 2.8 percent when adjusted for the number of selling days compared with 2004, and determined that it had to do something to stay competitive. "I think customers spoke pretty loudly in the month of June that they like a good deal," he said.

[cjrivera]

Doesn't apply to the GT?

Damn.