Turns Out GM's Employee Discount Isn't For "Everyone" As The Ads Say

Implications: The automaker, last week in a last ditch attempt to salvage sales for the month of August, announced an "Employee Discount" for everyone, not just bona-fide employees.

Analysis: General Motors last week extended their "Employee Discount" program to everyone in a bid to boost sales and clear out inventory. Now we hear that the automaker is suing employees, retirees and widows for giving discounts to non-employees.

When I first read of the lawsuit in the Forbes article, I didn't believe it. Unfortunately its true. In a masterpiece of bad timing, GM has decided to crack down on a practice that has been going on for as long as I have been a dealer.

GM employees routinely extend the discount program to friends, distant family members, etc.

The timing of the lawsuits, three of which were filed on or after August 20, the day GM extended the employee discount to everyone, is coincidental according to the company. The crackdown comes at a time the company is suffering through its worst sales year in decades.

While not endorsing something that is at best unethical, one has to ask why GM waited until now to put the brakes on the practice.

The employee-pricing program, which could be extended beyond its announced end-date of September 2, is a perk offered to employees as part of their benefits package.. GM is accusing the employees of giving the discount to people they knew weren't eligible and for their own "financial gain."  PS....GM, its been going on forever.

GM routinely audits dealerships for violations, if one is found, an employee could lose their discount for five years for each violation. I can't recall a dealership ever being penalized.

Ford Motor Co. also monitors the use of employee discounts, but if anything, has encouraged employees to give away discounts to improve sales.

A year ago, Ford allowed its active and retired workers to extend the discounts to as many as 13 friends and family members, five more than p[previously allowed.