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This is somewhat misleading and certainly not due to patriotism. Car companies have massive discount plans for workers, friends and family, supply chain worker
by grandalf 15y ago
This is somewhat misleading and certainly not due to patriotism.
Car companies have massive discount plans for workers, friends and family, supply chain workers, previous customers, etc.
Detroit has lots of automotive industry workers, and thus for many people around Detroit, it's silly not to buy the car that you can get at a huge discount. This isn't necessarily an American vs non-American choice, since workers are typically eligible for a steep discount with only one car company.
Around the time that Japanese automakers began producing quality products, automotive execs in Detroit looked out their office windows and saw an increasing number of competitors' cars in the parking lot and it scared them. What kind of statement is it when a worker buys the competitor's product. So they offered steep discounts, which are pretty much guaranteed to result in workers buying their employers' product.
In more recent years, this has also been used to boost sales numbers in times of crisis. US automakers have had miles of unused tarmac near Detroit Metro airport filled with cars that they couldn't sell. At some point they just offer a steep employee discount and now a bunch of dud product that is losing money can be turned into a few months of strong sales. By using employee discounts for this, the firm is not seen to be succumbing to massive widespread discounting, and so the technique stays off the radar fairly effectively.
When you consider the cities that have automotive plants, supplier manufacturing plants, etc. and all the discounting going on in these areas, the chart starts to make a lot more sense.
Now for a small rant: Ironically, preventing workers from experiencing competitive products seems to have created tremendous myopia in Detroit and may be responsible for the decline of the US auto industry. Detroit is still using cheapo vinyl and plastic on midrange and even low end luxury cars, far inferior to the materials used on low trim-level Honda and Hyundai models.
One can imagine that if more workers had needed to think carefully about what they wanted to drive, the handwriting would have been on the wall and something could have been done about it before it was too late.
Note to business owners. If you have to discount your product by over 20% to get your own employees to buy it, take a closer look at what they prefer about your competitor's product.
- coin 15y agoI disagree. I worked for Chrysler near Detroit during the mid-90s. The Chrysler employee discount wasn't much better than if you did a good job bargaining at the car dealer. In the Detroit area, there was tremendous pressure to buy American. I observed this both from friends and coworkers. There was definitely at attitude that you should support the local economy, especially if you're employed by one of the Big Three. If company X is employed you, then you need to buy company X's product. It's almost as if you owed it to your employer, that your paycheck somehow has strings attached, that the proceeds should never be used to purchase a foreign car. Chrysler took it a step further and forced non-Chrysler cars to park in the "competitive vehicle parking area" of the employee parking lot - which happens to be the farthest few rows.
- mc32 15y agoI don't think it's too outlandish to expect people who work on building a product to buy the brand of product they help manufacture. Imagine Google engineers NOT using GMail --or, rather, avoiding GMail. Exceptions for studying the competition and all. Imagine the pressure form colleagues. "Yeah, I work at Google, of course, but I prefer to use Hotmail. I don't even have a GMail account". It's their version of dog-fooding it. Albeit, one with greater bottom line involved.
- coin 15y agoI've met many Microsoft employees who use iPhones. Can you blame them? I believe that as an employee, I am free to purchase any product or service without any obligation to my employer.
- grandalf 15y agoIf you actually comparison shop and get final quotes you'll find that the employee discount is actually a much better price, particularly on leases. The mid 90s was also toward the early edge of the use of the technique to generate sales. To give you an example, a vehicle that the typical person would lease for around $400 per month would be available to an employee for about $275 per month. Chrysler executives get a new free lease every year, even after they retire.
- the_unknown 15y agoIn a similar manner - if you aren't driving a "north american" car you're not even allowed to park in any of the close lots at the local GM plant. you basically park further away then everybody else as your punishment. When mixed with the large price discount for buying from GM it is basically a fool's game to buy anything other than a GM here. If you're an employee/partner/supplier/ or know an employee/partner/supplier. For the rest of us who don't get discounts.... the world is our overpriced oyster.