GM sets itself up to lose huge sums of money

[Editor's Note: Here we go again, GM giving away cars again at cost or near cost, which will lead to huge losses. Instead of cutting back production, they prefer to flood the market with cars to keep their total sale total up as they fight to hold off Toyota from taking over the world's No. 1 ranking in sales volume. And they actually pay their executives huge sums of money to come up with ways to lose money on the backs of their investors.]

General Motors Corp. is expected to roll out a ramped-up incentive program today that will include bonus cash and a revival of free financing.

Zero-percent financing for as long as 60 months or $500 cash will be available on most 2006 and 2007 models as GM hopes to boost sales following a nearly 17 percent decline in demand last month.

The cash will be offered in the Midwest and Northeast, while zero-percent loans will be available everywhere else in the United States.

"It's a new thing that kind of caught us off guard," said dealer John Rogan of John Rogan Buick-Livonia. "It's a great deal. And, as dealers, we believe it will drive our market share up."

GM has made a concerted effort to pare back costly incentive spending, a strategy the automaker has said it will stick to even at the risk of losing sales. GM attributed its January sales decline in part to a planned reduction in rental fleet sales, but consumer demand also slumped.

After taking such a steep sales hit in January, some questioned whether GM pulled back too far on incentives.

"We're not going to go down the path we went down before, throwing incentive dollar after incentive dollar," GM senior analyst Paul Ballew said after announcing January sales figures early this month. "But we'll do what it takes to be competitive."

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