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Uh guys, about those company cars

Posted by: David Welch on August 6, 2008

As General Motors scrimps and scratches to save cash, some white-collar perks are coming under close scrutiny. The latest: company cars for managers. Right now, GM’s top 9,600 managers, engineers and white-collar staffers get a company car for three months at a time for a fee of $150 a month for some managers and $200 for other staff. It’s a sweet deal. The fee covers insurance (GM is self-insured) and the employees get to expense gasoline on the company card. Employees do have to evaluate the cars and report defects or problems as part of the perk.

But with gas prices around $4 a gallon and GM looking to cut costs, they may soon charge employees an added $100 a month for their car. No wonder. If the average car gets about 22 miles per gallon and GM employees drive 15,000 miles a year like everyone else does, they each slap up to $2,700 a year on their expense reports for gasoline. That adds up to $26 million a year in gasoline. Charging another $100 a month per manager would save $11.5 million a year. One GM executive said they didn’t want to raid perks too heavily for fear of losing talent. Still, a top rate of $300 a month to cover a car payment, gasoline and insurance is still a great deal. There is one downside. You could end up in a Chevy Aveo.

Reader Comments

Dearborn Observer

August 6, 2008 8:07 PM

The company car programs of the Detroit 3 are symptomatic of what makes their corporate cultures so insular and non-responsive. Who wouldn't see the world through rose-colored glasses if your car was always 1.)new; 2.)washed and fueled up for you, gratis, every day; 3.) any maintenance issues are taken care of in a company garage; 4.)you get prime reserved parking in - get this - a CARPETED garage; and 5.)this cost you virtually nothing. Legions of D3 managers have never visited a dealership showroom or purchased a vehicle in their adult lives. And we wonder how these guys have gotten out of touch with the marketplace?

mr dave

August 7, 2008 2:06 PM

I couldn't agree more!!! The big three are so out of touch with the market that it will take years to become a force again. Even now as bad as times are they still are reluctant to eliminate divisions and all the multiple layers of management. They could eliminate 20% of their management and the public would never seen any difference!!!

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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