Financial InformationGM dealers sold 558,092 cars and trucks in June of 2005 up 41% compared to June of 2004. Gm had the best monthly sales since September 1986. The calendar year to date sales are up 2.5% for the 2005 year. Sales were spiked by GMs “Employee discount for everyone.
” “We are confident that are employee discount program would hit a responsive cord, but we were a little surprised by just how strong the results were, including bringing over one hundred and fifty thousand new customers into the GM family in June. This definitely moves us in the right direction as we gear to introduce our 2006 models,” says Mark LaNeve, GM vice president of sales and marketing.GM of North America in June of 2005 produced 416,000 vehicles compared to 482,000 vehicles in June of 2004. GM had too much inventory and had to run an incentive program that worked. Globally GM has been an industry leader since 1931 and was founded in 1908.
GM employs 321,000 individuals world wide. GM has Manufacturing operations in 32 countries and sells vehicles in 200 countries. In 2004 GM sold nearly 9 million vehicles globally. GM was up nearly 4% and posted its second highest total in company history.Incentives are ran by a company to try and entice a customer to purchase a vehicle. It is a temporary jump start for sales.
The last couple years consumers have expect low rates but now GM throws out the employee pricing. Consumer would let the incentives break the tie on which vehicle to purchase. This day in age everyone has low rates ,cash rebates but now employee discount, good thing GM was the leader of the pack.The financial outlook for present GM is superb and the employee discount drastically sparked sales for a temporary time period.
The reason GM had to run an incentive program was the cause of abundance of Inventory and employees are too expensive to maintain. (Pension, benefits..) Gm had an increase in finished product, service parts, etc between 2003 and 2004 in other words, total inventories increased by nearly one million dollars, as sales decreased during that time period. GM has also seen a rise in healthcare and other benefits in the United States.
In 2004 GM had an obligation expense 89,384 million which GM had to pay for its current employees and past employees for the year in benefits. GMs non United States employees constitute for 18,056 million in 2004. Citizens of the United States are baffled when they hear more employment is being sent over seas. It is just flat out cheaper and saves the business much more money.GM has found a financial savior for the short-term but a consumer disaster for the long term. GM has been known for the quality of their vehicles and in return a high price may be paid for the quality.
Now GM has taken away from the customers thought of quality and may have etched a few misleading thoughts into the consumers head. The consumer thoughts are this exactly, GM has to cut corners somewhere and the manufacturing is where it happens. GM may been known from here on as a cheaper automobile maker.