Ford, GM playing with fire

UPDATE #2 DaimlerChrysler AG's Chrysler Group said Thursday it will give two years of free gas to customers who buy a 2005 or 2006 vehicle before Jan. 3, following announcements of new discounts by rivals General Motors Corp. and Ford Motor Co.

Chrysler will also kick in two years of free scheduled maintenance and increase the warranty on mechanical parts to five years or 60,000 miles. Chrysler now offers a three-year, 36,000-mile warranty. The offer, called the “Miles of Freedom'' plan, begins Monday.

“The combination of free gasoline, free scheduled maintenance and a full warranty puts our customers' mind at ease and allows them to fully experience the joy of driving one of our vehicles,'' said Joe Eberhardt, Chrysler's executive vice president of global sales, marketing and service.

The company said the free gas will come in the form of a $2,400 debit card that can be used for anything. Alan Helfman, manager of River Oaks Chrysler Jeep in Houston, said the free maintenance is worth $200 to $300 and the extended warranty is worth $600 to $700.

11/17/05 A reader responds, Dear, I think you should make it quite clear that Ford Europe does make cars that people want – the Focus, Mondeo and Fiesta have all been long-term top sellers in the UK. What's more they are all decent cars (I speak as Mondeo owner and former Focus driver) which are genuinely well-built (in a way that American cars can only dream of). Seems the next generation of Fords here will be even more appealing too. I doubt they will drop out of the top 10 in sales and look set to cement Ford Europe's reputation for producing reliable, dynamic vehicles. The drawback – to get them this good has cost an absolute fortune, meaning profit margins are again slim or non-existent. Seems you can't win whichever way you do it! Neil Tipton, UK

11/16/05 While their Japanese rivals sit back and rake in the profits, GM and Ford continue to basically give away cars for near-zero profit. And you wonder why they are in trouble financially. Rather than build cars consumers actually want they sell cars at no-profit just to stay in business. The Chevy Corvette is one example that proves GM could build a car that people want and make a profit on it. Too bad the rest of their car lineup wasn't in such demand. The quality of the interiors of most American cars is downright insulting, yet that is the place people sit in to drive. And they wonder why no one is buying.

Ford Motor Co. on Wednesday rolled out a new incentive program that cuts thousands of dollars off most of its new cars and trucks. The new incentives follow cross-town rival General Motors Corp.'s (GM.N: Quote, Profile, Research) "Red Tag" sale, which allows anyone in the United States to buy vehicles at the same price employees of GM's auto parts suppliers pay. GM, which announced the deal on Monday, has led Detroit's profit-draining price war for four years.

Ford's program, called the "Keep It Simple" plan, will be available through January 3. It comes after Ford and GM suffered a 23-percent decline in U.S. October sales and lost market share to Japanese rivals.

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