Mar 31, 2009 5:20 pm US/Eastern
American Carmakers Unveil Deals To Lure Buyers
CHICAGO (CBS) ―
GM automakers rolled out a new plan Tuesday in an effort to entice Americans to buy American cars. CBS station WBBM-TV reports on how the company is trying to appeal to drivers -- even the ones who are worried about losing their jobs.
The fear of GM bankruptcy has kept plenty of customers away. People are afraid of two things, auto industry experts say. They fear not being able to make payments because of unemployment, and they fear not being able to buy parts for a new car in the case that the automakers go bankrupt.
GM has taken steps to address both issues.
A paycheck protection plan provides nine payments of up to $500 a month for Americans who lose their jobs. A value protection plan covers the difference between what people owe on their car and the vehicle's true value.
"People lack confidence in the economy," said Desmond Roberts, a salesman at a Chevy dealership. "The guarantee that the government is behind General Motors so in case you buy a car, you're not going to be left out in a lurch."
John Stojak's been considering buying a new Chevy Malibu for months. But when Uncle Sam stepped up to back up all GM warranties, he decided to make the move.
"To me, that's more important if you're going to spend this kind of money on a vehicle," Stojak said. "If something goes wrong with it, you want to be able to take it to the place you're buying it from and have it serviced."
None of this means the bankruptcy threat is gone. In fact, with more consumer protection in place, it may be more likely, auto industry experts say.
"The federal government and taxpayers are being asked to rescue them, there's a point beyond which we just can't go," said Ill. Sen. Dick Durbin.
Overall, car sales in the U.S. are down 50 percent compared to last year. The fact is, no rescue plan for General Motors can succeed unless the company sells more cars -- a lot more.
That means convincing Nissan drivers like George Petrovich to switch to American cars.
"I always buy foreign," Petrovich said. "I'm getting more for my money, more reliability."
But there's hope in Jaguar driver Michael Pyrchalla.
"Believe it or not, both my wife and I think Cadillac's quality is a lot better," Pyrchalla said. "And I would never own a Jaguar again."
GM's payment protection plan is scheduled to end April 30th, but it could be extended if it's successful, WBBM-TV reported. And Ford also joined the parade Tuesday, unveiling its own plan that covers car payments for the jobless -- up to $700 a month for as long as a year.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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