Although high incentive costs helped drive the to a $512 million loss in the third quarter, the automaker is expanding its employee purchase plan to include discounts for friends and neighbors of its workers.
Beginning today, employees can give to anyone they choose a certificate that entitles the bearer to purchase any product for 2 percent under invoice. The Dodge Viper, Plymouth Prowler and Chrysler PT Cruiser are excluded. The promotion is called the Friends program.
The 2 percent below invoice will be reimbursed to dealers. That means the dealer's profit will be the holdback, which is currently 3 percent of the manufacturer's suggested retail price.
Holdback is a percentage of the dealer discount that automakers retain but eventually pay to dealers.
The dealer pays more for the vehicle when he buys it from the factory, but he later gets that money back as a lump sum covering all his purchases during a specific period.
The Friends program is open to salaried and hourly workers and retirees in the United States. Eventually, supplier and dealership employees also are expected to get the certificates.
Initially, each employee will get two certificates that can be used through Jan. 31, 2001. That could grow to four certificates annually.
The Friends program is similar to the Friends and Neighbors Plan, or X Plan, offered by Ford Motor Co. Ford employees can refer up to three friends per year for discounted deals, more if they get permission from a supervisor. The Ford deal is 4 percent over the dealer's net price, which is the invoice price minus dealer holdback and floorplan charges.
The Ford program does not include hourly workers represented by the UAW. General Motors does not offer a purchase program for non-employees.