Chrysler workers can no longer share employee discount

DETROIT -- Chrysler has stopped allowing employees to share their employee discount price on the purchase or lease of a new vehicle with friends and extended family, the Detroit Free Press has learned. The discount typically is about 5% below the factory invoice price.

"Chrysler LLC continually monitors employee pricing in assessing its competitive position within the marketplace, and the company adjusts accordingly," spokeswoman Beverly Thacker said in explaining why the program was cut.

She stressed that the employee discount program continues for employees and retirees, who are allowed six discounts for themselves and immediate family members each year.

The move will come as a culture shock in the Detroit area. Using friends' discounts on new U.S. vehicles is ingrained in the local car-buying landscape, where thousands of people are tied to the auto industry. Most TV and newspaper ads in the area routinely list the discounted prices.

Chrysler's Employee Choice Program allowed employees and retirees to give the same discount, plus a $200 fee, to a friend, extended family member or acquaintance. They were allowed to give one discount a year, though last year, they could do it twice. The company said the discount was used 60,000 times in 2007.

The program began in October 2004 and was terminated in January. Thacker said the discount ranged from 4% to 6%, but most received a 5% discount.

After canceling the program, Chrysler mailed former Employee Choice customers a $1,000 certificate toward the purchase of a new Chrysler-brand vehicle, Thacker said.

Chrysler declined to quantify the expected savings from the change.

Chrysler employees still can help friends get a deal on a new Chrysler vehicle. Under its Friends Program, friends, neighbors and extended family members are given a preferred price — up to 1% below factory invoice plus a $75 administration fee — toward the purchase or lease of select models.

Jessica Caldwell, an industry analyst with Edmunds, said the move to cut the friends discount is another example of Chrysler's efforts to save money. While the 60,000 times it was used last year "doesn't seem like a big number," Caldwell said, "it seems like they are counting every penny these days."