GM Employee Discount - Is it really a good deal?

Automakers and dealers are anxious to sell 2008 models and make way for the 2009s. With car and truck sales down and the end of summer fast approaching, we have seen a wide range of sensational incentives advertised, from traditional rebates to buy-one-get-one offers. Among the hyperbole-laden ads, General Motors’ Employee Pricing for Everyone has attracted much attention, resurrecting a previously successful strategy.

The idea is simple: give the public the same price on cars offered to employees. Rather than a complicated matrix of incentives, this boils down an enticing offer into a tidy sound bite. But is it a good deal?

How it works
The Employee Discount for Everyone is available at participating Buick, Chevrolet, Cadillac, GMC, Hummer, Pontiac, Saab, and Saturn dealers on virtually all remaining 2008 GM vehicles in stock. In addition, a few 2009 models are eligible, including the Chevrolet Cobalt and HHR; Pontiac Vibe and G5; and Cadillac CTS. (Of these 2009 models, only the HHR meets our standards to be Consumer Reports recommended. We do recommend several 2008 GM models.)

The program started on August 20 and runs through the Labor Day weekend to September 2, 2008.

Shoppers can look on the various GM-brand Web sites to check the Employee Price or at GM.com. Both retail (MSRP) and Employee Price are listed for comparison, along with additional national and regional customer-cash rebates. At dealerships, special stickers present this same information.

What is the value of the deal?
For our report on "Driving a great, end-of-summer new car deal," Consumer Reports Auto Price Service tracked 2,014 national incentives across all vehicle variations this month. Since large trucks and SUVs are stuck in a sales downturn (no surprise considering the gasoline prices these days), we found that the size of the incentives often varies in direct proportion to the size of the vehicle. For example, Hummer has the highest average combined customer and dealer incentives per model at $5,400. (For a complete breakdown, read "New car incentives by brand.")

To assess the Employee Pricing program, we ran the numbers on several vehicles, comparing informed negotiation against advertised employee pricing. In these examples, we found the Employee Pricing to be a good deal.

For the analysis, we pitted the advertised GM offers on sedans, SUVs, and pickup trucks, against the Consumer Reports Bottom Line Price (which factors invoice price, rebates, hidden dealer incentives, and dealer holdback) then added a slim 2-percent dealer profit. For these example models, we found the Employee Pricing to be, on average, $345 better than traditional negotiation.

The example below illustrates how the GM Employee Discount for Everyone pricing compares to aggressive negotiation. The GMC Acadia is a Consumer Reports-recommended vehicle.

GMC Acadia AWD SLE-1

Traditional negotiation		GM Employee Discount
MSRP*	$32,885	MSRP*	$32,885
Invoice	$30,060	GM Employee Price	$29,981
Bottom Line Price	$28,330	Customer Rebates	$1,500
Estimated Sale Price	$28,897	Sale Price	$28,481
Savings against MSRP	$3,253	Savings against MSRP	$4,404
Savings against MSRP	10%	Savings against MSRP	13%

* Includes destination charges

Bottom line
As this analysis revealed, there are indeed good end-of-summer deals to be had on new cars. With any car purchase, it pays to check the numbers to see if they add up to a good deal and to reveal what potential there may be for further negotiation.

Driving a hard bargain is only one part of the equation. Remember, a great deal on a bad car is no deal at all. Focus first on creating a list of good, safe, reliable cars with average or better projected owner costs (a quick process using our New Car Selector). Then look to reading road tests, taking test drives, and reviewing the numbers.

We maintain a list of Best New Car Deals on CR-recommended models that can highlight standout national offers. To truly arm yourself for negotiation, a complete pricing and incentive breakdown is available in our new- and used-car price reports.

—Jeff Bartlett

Safe! - Acadia, Enclave, Outlook, Traverse top safety picks

The Insurance Institute for Highway Safety has awarded the Buick Enclave, Chevrolet Traverse, GMC Acadia, and Saturn Outlook its Top Safety Pick designation for exemplary performance in frontal offset, side, and rear crash tests. To be eligible for this distinction, a vehicle also has to have standard stability control.

These corporate siblings are highly rated by Consumer Reports. We liked their combination of ride, handling, smooth powertrain, and space efficiency. With these new crash-test results, the Acadia and Outlook now earn our top-level recommendation, which means they performed well in CR's tests and have average or better reliability. The Enclave is not recommended because we do not have adequate reliability data yet. The Traverse goes on sale in the fall.

The Acadia and its siblings received top scores in the Institute’s frontal-offset  and side crash tests, and also received top marks for whiplash protection based on the design of their head restraints. The Institute provides a detailed breakdown, rating injury measures for head/neck, torso, leg/pelvis, overall head protection, and structure/safety cage. In all instances for front and side, these SUVs earn the Institute’s highest rating of good.

The National Highway Traffic Safety Administration (NHTSA) also awarded the vehicles five stars in both their front- and side-crash tests. The NHTSA evaluations are less severe than those performed by the Insurance Institute, but they are considered a valuable measure of safety belt and air bag performance.

The vehicles scored four stars in rollover resistance in NHTSA’s test of rollover propensity, a good rating for an SUV.

Learn more about how the Institute and NHTSA perform their evaluations in “Crash Test 101.” And see the tests in action by choosing from the more than 250 crash test videos produced with IIHS.

—Eric Evarts

Grand openings—Hatchback road test and videos

For our test group in the June 2008 issue, we drove small hatchbacks. These vehicles provide good fuel economy, practicality, and versatility. And one has all-wheel drive.

The full road tests from the magazine have been posted at ConsumerReports.org, along with videos from our staff auto experts. These videos highlight our tests of each vehicle, plus they demonstrate the strengths and weaknesses of each model.

"Grand Openings" features the Mini Cooper Clubman, Saturn Astra, Scion xD, Subaru Impreza Outback Sport, Toyota Matrix, and Volkswagen Rabbit. Ratings for all small cars we have tested can be found with our dynamic New Car Selector tool.

Check out the video of the Mini Cooper Clubman, plus see the rest of our hatchback videos.

Midsized sedan crash tests - front, side looking good

In the latest crash tests from the Insurance Institute for Highway Safety (IIHS), all seven midsized sedans provide good frontal crash protection and six provide good side-impact protection. However, results for the rear tests were mixed, with only the Kia Optima earning a good rating. With its latest report, the Institute notes that there has been a marked improvement in side-crash performance for midsized sedans, but it appears more can be done to protect passengers from possible whiplash injuries from rear-end collisions.

As we wrote in "Many cars don't protect against whiplash injuries": "A rear-end crash occurs every 17 seconds in the U.S. But a surprising number of vehicles offer inadequate protection from the whiplash injuries that can result, according to crash-test data and our own analysis."

This is again proven true with the latest test results from the IIHS, in which five of the seven vehicles tested earned marginal or poor ratings for rear-crash protection. Because rear crashes are rarely fatal, and the IIHS rear tests relatively new, Consumer Reports does not currently use them as a prerequisite for recommending a vehicle.

The good news with this test group is that vehicles are indeed improving, with better designs and increased safety equipment enabling them to more effectively protect occupants in the high-risk front and side collisions. As always, do check safety ratings before making a vehicle purchase. 

Midsized sedans
The April crash-test group from IIHS is listed below in rank order, with the specific air bag configuration tested and applicable model years listed. See how these vehicles perform in the crash test videos.

Dodge Avenger / Chrysler Sebring
Front - Good; Side - Good; Rear - Acceptable
With front and rear head-curtain air bags and front torso air bags.
Front, side, and rear: 2008 Avenger, 2007-2008 Sebring

Infiniti G35
Front - Good; Side - Good; Rear - Marginal
With front and rear head-curtain air bags and front torso air bags.
Front, side, and rear: 2007-2008 models

Nissan Altima
Front - Good; Side - Good; Rear - Marginal
With front and rear head-curtain air bags and front torso air bags.
Front, side, and rear: 2007-2008 models

Chevrolet Malibu
Front - Good; Side - Good; Rear - Marginal
With front and rear head-curtain air bags and front torso air bags.
Front and rear: 2008 models. Side: 2008 models built after February 2008.

Saturn Aura
Front - Good; Side - Good; Rear - Marginal
With front and rear head-curtain air bags and front torso air bags.
Front, side, and rear: 2007-2008 models

Mitsubishi Galant
Front - Good; Side - Good; Rear - Poor
With front and rear head-curtain air bags and front torso air bags.
Front and rear: 2004-2008 models. Side: 2007-2008 models.

Kia Optima
Front - Good; Side - Acceptable; Rear - Good
With front and rear head-curtain air bags and front torso air bags.
Front and rear: 2006-2008 models. Built after September 2005.
Side: 2006-2008 models. Built after June 2006.

See how these sedans and more than 200 other models perform in the crash test videos.

—Jeff Bartlett

Lifting the hood on the Saturn Astra

Forbidden fruit - that's how some enthusiasts regard many models sold overseas that never make it to these shores. Alluring cars like Ford's second-generation Focus, Mondeo, and S-Max; the Honda Accord Tourer (wagon); and various high-performance Alfa Romeos, Opels, Peugeots, and Renaults are out of reach to the American car buyer.

The Saturn Astra represents something of a victory for the huddled masses yearning for these cars. The Astra is European through-and-through. Developed in Europe and built in Belgium, our Astra is almost identical (including suspension tuning) to the Opel/Vauxhall Astra that is one of Europe's top-selling cars. (The next Aura is also rumored to be a lightly altered Opel Vectra.)  Another victory worth celebrating: it replaces the highly undesirable Ion as Saturn's entry-level car.

But the story of the Astra highlights some of the problems of transforming a design intended for one marketplace into a global one. Since the Astra wasn't originally intended to be sold here, the decision to sell it in America reportedly came pretty late in its product life-cycle. GM made the modifications necessary to sell the Astra here in only 13 months, an impressive feat. But to do that quickly without investing a lot of money in the existing platform required some compromises:

—GM engineers picked the Astra's only existing gas engine - a 1.8-liter version of their Ecotec four-cylinder -- with an available automatic transmission. (Remember: Europeans aren't too keen on automatics.) That leaves Americans with 138 horsepower, and a choice of five-speed manual or four-speed (rather than five or six-speed) automatic. Most other competitors here have a lot more power. There are very tempting high-performance Astras in Europe, but we won't see them this time.

—Rather than using GM's very simple-to-use "Black Tie" corporate radio (the one that made even Saab dashboards simple), the Astra retains its complicated European radio. It's a mess to use. Furthermore, the only available connection in the back was used for OnStar. Big deal, you say? Well, that means that there is no auxiliary input or satellite radio, features almost every other GM car has. Worse, those are features that the Astra's target demographic will likely demand. (We've been told that the engineers are reconsidering.)

—The Astra picks up the three- and five-door hatchback body styles that the freshened-for-2008 Ford Focus dropped. Most of us at CR love hatchbacks because they add practicality without bulk. But most car buyers in this market don't share this view, considering hatchbacks to be downmarket. The Astra has a wide range of body styles in Europe, including a sedan, wagon, the Zafira microvan, and a nifty hardtop convertible - but we will not see such diversity in this generation.

—With the shrinking dollar and unfavorable exchange rates, the Astra is a rather expensive car to build overseas and import here. While Europe is more accustomed to paying a premium for well-equipped small cars, Americans see most small cars as entry-level transportation. So, in order to move any Astras here, they have to be priced to sell.

This creates a delicate balance. Consider that our Astra XE with a sunroof, automatic, heated seats, and stability control, just topped $20k—with no alloy wheels. (And you can't haggle at Saturn dealers— although incentives are sometimes available.) That money buys a Volkswagen Rabbit (the American version of the Golf, the Astra's main sales rival in Europe) with 170-hp.

On the flip side, while the Astra seems quite fully-priced here, buying a (mostly) equivalent Vauxhall Astra in England would run you 17,165 pounds (before lots of taxes). Basically double that to get the price in dollars. (It is about $32k in Germany.) Some of us have joked that you could run a lucrative business buying Saturn Astras and shipping them back to Europe for sale.

This pricing disparity has lead Bob Lutz, GM's vice chairman and head of product development, to quip that "We are considering applying for non-profit status." Later remarks from Lutz in Automotive News spun it a different way. They note that importing the Astra saved GM $900 million in developing a new platform. Of course, a new platform would have a much longer shelf life than the two or three years the Astra will be sold here—and GM is in the midst of developing a new global small-car platform, anyway.

Our first impressions are that the Astra has an impressive ride/handling balance, firm supportive seats, and some rather annoying controls. So, is the Astra a case of "be happy you got what you asked for," or will it leave buyers wondering what might have been? We'll see when we test it against the Rabbit, Subaru Impreza Outback Sport, and Toyota Matrix in a future issue.

—Tom Mutchler

Discuss Saturn in the Cars forum.

American Top Picks 2008

It’s time again for the annual American Top Picks list. While we don’t consider country of origin as a factor in our Ratings for our primary Top Picks list, the piles of mail (snail and e-mail) we get leave us no doubt that many people factor “buying American” into their decision. So, for those folks, this list looks at what domestic-branded cars are the best choices out there.

It would be a relatively simple matter to compile this list if Top Picks were merely the highest-scoring car in each group. But to be a Top Pick, a car has to have performed well in our testing, be relatively trouble-free to own, and safe, too. Here are the other criteria to determining a Top Pick:

We need to have reliability data for the car, and that data must show at least average or better reliability.

Stability control must be readily available.

If crash tested, the results have to be decent.

These criteria wind up knocking some very good cars—particularly some recent GM products—out of contention from our American Top Picks list. To illustrate, here’s the list of the top-rated domestic-branded car in each class next to the one that meets all of the criteria:

Category

Top-scoring American car

American Top Pick

Small sedan	None recommended	None
Family sedan	Chevrolet Malibu LTZ V6	Ford Taurus
Upscale sedan	Cadillac CTS	Buick Lucerne CXS
Luxury sedan	Cadillac STS	Cadillac STS
Small SUV	Saturn Vue XR	None
Midsized SUV	Saturn Outlook XR GMC Acadia SLT2 Ford Taurus X	Saturn Outlook XR GMC Acadia SLT2 Ford Taurus X
Minivan	Chrysler Town and Country	None
Pickup truck	Chevrolet Avalanche	Chevrolet Silverado
Fun to drive	Chevrolet Corvette Z06	None
Green car	None tested	None

Let’s look at each class in detail, except luxury sedan, which doesn’t need further explanation:

Small sedan: Not many choices here. Although the Ford Focus has scored quite well in the past (it was a Top Pick as late as 2005), we haven’t tested the freshened 2008 model. The underwhelming Chevrolet Cobalt scores too low to be recommended.

Family sedan: The new Malibu is a very impressive car, but we don’t have reliability data on this redesign. (Data on other vehicles on its Epsilon platform ranges from below-average to above-average reliability.) The fun-to-drive Ford Fusion/Mercury Milan lacks ESC, so it’s out of the running—hence the Taurus.

Upscale sedan: The CTS is a very impressive car, but we don’t have reliability data yet for this version. The Lincoln MKZ lacks ESC. That takes us to the Buick Lucerne CXS V8.

Small SUV: The Saturn Vue XR isn’t a stand-out, but it does score the highest of any tested small domestic-branded SUV. However, we don’t have reliability data on the new Vue. Beyond that, no small domestic SUV—Chevrolet Equinox/Pontiac Torrent, Jeep Compass/Patriot, Ford Escape/Mercury Mariner—scores high enough to be recommended.

Midsized SUV: There isn’t a lack of good recommended vehicles in this category; it’s a matter of picking, literally, which one fits. The Outlook/Acadia straddle the midsized and large category. The Taurus X is also accommodating inside.

Minivan: There’s only really one game in the domestic town: the Chrysler Town and Country/Dodge Caravan. (The outdated Chevrolet Uplander goes away next year.) While the Chrysler minivans used to score near the top of their class, this redesign is mediocre. We don’t have reliability data for the redesign.

Pickup truck: The Avalanche outscores all pickups in our Ratings, including the Toyota Tundra. But it hasn’t been reliable. Unlike the Tundra, first year reliability of the Silverado has been average, so it made our Top Picks list.

Fun to drive: The Corvette Z06 is an awesome car, but Corvette reliability is well-below average. The CTS could also qualify here, but again, no reliability data. Going down the list, the Mustang GT lacks ESC; we don’t have reliability data on the Dodge Viper; and the Pontiac Solstice/Saturn Sky have subpar reliability. The Dodge Charger R/T V8 is reliable and fast, but its overly light steering feel keeps it from being truly fun to drive.

Green car: Not many domestics qualify here. We haven’t tested the latest Ford Escape Hybrid, but since it lacks ESC, it wouldn’t qualify for the list anyhow. We also haven’t tested latecomers to the hybrid market like the Saturn Aura Greenline, the redesigned Saturn Vue Greenline, or the Chevrolet Malibu hybrid. GM’s “light-hybrid” system does improve mileage, but it’s not on par with full-hybrid systems found on the Toyota Prius and Honda Civic Hybrid. Next year brings full-hybrid versions of the Vue and Ford Fusion/Mercury Milan.

To sum up:

Some recent GM models are extremely impressive, and they would make fine choices—if reliability works out.

Ford needs to get ESC on their mainstream family cars. (We’re told 2009 should bring increased ESC availability.)

Chrysler and Ford really aren’t competitive in the upscale and luxury sedan segments—especially against a resurgent Cadillac.

The domestics are lagging behind in the small sedan and minivan segments, fields where they used to be more competitive.

While the domestics are starting to roll out more hybrid sedans and SUVs, they still lack a high-mileage small “green” car.

See our true list of overall Top Picks for 2008. See the Top Picks videos.

—Tom Mutchler

Random observations in Detroit

Reflecting on the news and happenings thus far, here are a few random observations:

• Why doesn't the Saturn Vue dual-mode hybrid use the 2.8-liter version of GM's DOHC V6 (never mind a four-cylinder)?  The SUV, instead, gets the 3.6-liter V6; the normal Vue XR with this engine got only 17 mpg overall in our tests. While this hybrid does have better EPA ratings than the non-hybrid, the combination of the 2.8-liter and the hybrid drive would likely have returned decent acceleration numbers and better fuel economy than the 3.6. We're wondering if the Vue's design brief got approved before the grand idea of "performance hybrids"—like the cancelled Honda Accord hybrid—went bust. A turbocharged, direct injection, 4-cylinder, 2.0-liter/hybrid combo would also have been interesting, using the hybrid power to boost low-end torque to move the heavy Vue off the line while improving mileage.
• Props to Subaru and Honda for keeping a boxy profile for their Forester and Pilot, respectively. Eschewing the trend for a sloping roof line and a Nissan Murano-like truncated rear-quarter window improves both cargo area and visibility - two reasons why people buy SUVs in the first place.
• We wish we could blame the writers strike on some of the hard-to-get-through speeches we've been hearing.
• Ford brought out a bunch of Mustangs in the middle of their press conference, with one drifting to a stop on the stage in Cobo Arena. Thing is, although the Mustang line has many proliferations, there really wasn't any thing to report. They drove in a bunch of Mustangs, they were parked for two minutes, and then they blasted out. Why? My guess: Mustangs are fun, and most journalists love them - hence, the press conference had a sort of a "halftime show" with a bunch of Mustangs. Fair enough.

—Tom Mutchler

See our complete coverage of the 2008 Detroit auto show. And discuss the event in our auto show forum.

Small SUVs and SUV alternatives tests and videos

For our test group in the December 2007 issue we drove vehicles in the very popular small SUV category. These vehicles perform adequately, but can’t compete with the top performers in this segment: the Honda CR-V, Hyundai Santa Fe, Subaru Forester, and Toyota RAV4.

The full road tests from the magazine have been posted at ConsumerReports.org, along with videos from our auto staff experts. These videos highlight our tests of each vehicle, plus our experts demonstrate the strengths and weaknesses of each model.

"Small SUVs" features the Ford Escape, Jeep Patriot, Kia Sportage, and Saturn Vue. We also took a look at two SUV alternatives: the Kia Rondo and Suzuki SX4. Watch the videos.

—Liza Barth

2007 SEMA - Pontiac Solstice SD-290 Racer

Pontiac turned the Solstice into a stripped-down, nostalgic one-seat race car with this concept, eradicating what limited functionality this model has in production form. The SD-90 has a roll bar, a motorcycle-style windscreen, chrome fire extinguisher, a removable cockpit cover, and a removable steering wheel. The concept vehicle is powered by a 2.0-liter turbocharged four-cylinder engine and rides on Hoosier R6 racing tires. This Solstice was a showstopper at SEMA, clearly drawing a crowd. I'd welcome some of the old-school charm, especially the vintage-looking flat hood and the unique front fascia, in a future model variant. Of course, we'd also welcome more storage space, improved fit and finish, reduced noise, easier-to-use controls, and improved driving position.

—Cliff Weathers

View our Solstice video. Discuss the Solstice SD-290 concept car in our Auto Show and Pontiac forums.

UAW Strikes GM

More than 70,000 United Auto Workers (UAW) nationwide walked off their posts at General Motors at 11 a.m. this morning, after negotiations between the two organizations failed to reach a labor agreement. Contract talks had officially begun July 23rd.

At issue, GM is looking to make significant cost reductions to remain competitive, even solvent. Some proposed cuts require concessions from the UAW, which seeks to protect job security and benefits for its workers.

The UAW this morning declared its strike intentions, including the following statement:

"We're shocked and disappointed that General Motors has failed to recognize and appreciate what our membership has contributed during the past four years," said UAW President Ron Gettelfinger. "Since 2003 our members have made extraordinary efforts every time the company came to us with a problem: the corporate restructuring, the attrition plan, the Delphi bankruptcy, the 2005 health care agreement. In every case, our members went the extra mile to find reasonable solutions."

Likewise, General Motors issued the following press release:

We are disappointed in the UAW's decision to call a national strike.

The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company. We are fully committed to working with the UAW to develop solutions together to address the competitive challenges facing General Motors.

We will continue focusing our efforts on reaching an agreement as soon as possible.

The labor dispute comes at a time when GM is showing positive signs while facing increasingly tough competition. Many of the latest products we have sampled have been competitive (excluding the Pontiac Solstice and Saturn Sky), and in some cases, stand with the best in the class. The Saturn Outlook for example, provides an excellent alternative to a large, truck-based SUV for buyers who don't need the extra towing capacity or off-road ability of a truck. (General Motors/John F. Martin photo shows employees with Outlook at the Lansing Delta Township manufacturing facility.) The Chevrolet Avalanche is our top-rated pickup truck, and the related Chevrolet Silverado also scored well. Further, some future models, such as the redesigned Cadillac CTS and Chevrolet Malibu show promise.

Should this strike linger, it could cause GM to stumble, losing what momentum it has gained during the recent reorganizations and cost-cutting measures. What it means for consumers is hard to predict. Short term, there may be fewer incentives due to dwindling dealer inventory. Products such as the Outlook, GMC Acadia and Buick Enclave are already in short supply. Long term, both car shoppers and investors may see their confidence erode, which would reflect back on GM's finances. Time will tell.

UAW contracts with Chrysler Group and Ford Motor Company also expired on September 14th. Therefore, the results of the current negotiations with GM may have impact for all three automakers and their customers.

--Jeff Bartlett