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Ford chases GM with incentives

DETROIT - In a new gambit to boost slumping sales, Ford Motor Co. is one-upping General Motors Corp. and giving up to $1,000 in cash to employees and retirees who entice friends, relatives and neighbors to buy new cars and trucks.

Friday's announcement came as early numbers showed a big jump in GM's market share under its new incentive program, which lets customers use the employee discount rate through July 5. Ford's program also extends employee discounts to customers.

"At this point it looks like this may be (GM's) most effective incentive program, in terms of market share gain, since the post-9/11 0 percent financing program," said J.D. Power and Associates analyst Tom Libby.

For the first 12 days of June, GM's share of new-vehicle sales hit 30.3 percent, according to a survey by J.D. Power. That is up from the 25.4 percent share GM had this year through May. GM had a 27.6 percent market share in 2004.

The incentive program "is substantially moving the needle for them," Libby said.

The incentive programs followed a sluggish first five months for GM and Ford, as Japanese makers and DaimlerChrysler AG's Chrysler unit gained sales and market share.

Through May, GM's 2005 U.S. sales were down 5 percent to 1.9-million, and Ford's were down 4 percent to 1.3-million. Daimler Chrysler sales rose 1 percent for the year to 927,000. Nissan's sales rose 16 percent, Toyota's rose 12 percent and Honda's rose 1 percent in the period.

Ford workers learned of their company's incentive offer in an e-mail message Wednesday, company spokesman Jon Harmon said. It runs through Sept. 30.

"If every employee and retiree helps sell just one more vehicle, it would account for over 300,000 sales and an additional two points of market share," Ford Vice President Steve Lyons said in the e-mail.

Ford's market share is down 1 percentage point to 19.1 percent this year.

Harmon said this is the first time the company has offered payments to its employees for attracting customers, although it has allowed employees to pass along discounts to customers for some time.

Employees or retirees will get $50 for the first customer they draw. They get $75 for the second, $100 for the third, $150 each for the fourth through seventh and $175 for the eighth, he said.

"The response so far has been positive from employees," Harmon said.

GM said this month it plans to cut third-quarter production by about 100,000 vehicles, or 9 percent. Ford said it plans to trim third-quarter production by 17,000 vehicles, or 2 percent.

GM also has announced plans to close plants and eliminate 25,000 U.S. jobs over the next three years.

[Last modified June 18, 2005, 00:45:19]