GM, Ford are latest offering help to those hit by job loss
— -- General Motors and Ford Motor joined Hyundai Tuesday in offering forgiveness plans to counter potential buyers' worry about making new car payments if they lose their jobs.
GM GM and Ford F both are offering plans in which they would cover loan payments for several months. "My biggest hope is that customers never have to use it," said GM Vice President Mark LaNeve.
Each of the automakers contracts with a third party to insure the protection.
Hyundai's plan, which also allows the car to be returned, appears to have helped sell cars. Sales were up 4.9% in the first two months of the year for the seventh-largest automaker. The top six, GM and Ford included, saw big drops.
The plans:
•GM. If you lease or own a new vehicle at least 90 days and lose your job, GM Total Confidence will make payments up to $500 for up to nine months.
GM also will cover consumers for up to $5,000 if their vehicle is worth less in two years than they owe and they want to trade it in on a new GM vehicle.
•Ford. Buyers of Fords, Lincolns or Mercurys have to have made payments for at least a month, then the Ford Advantage Plan will make payments of up to $700 a month for up to 12 months in case of a job loss. Ford workers are eligible.
•Hyundai. The South Korean automaker gives payment relief for up to 90 days besides allowing no-penalty return of vehicles for those who are suddenly jobless.
The plans are a sign of the times. Non-farm unemployment rose to 8.1% in February, up from 7.6% in January, the government reported.
The best plan for most buyers appears to be GM's, says Jesse Toprak, sales analyst for car research site Edmunds.com. "They not only cover the job-loss issue but the negative-equity (resale value) issue."
He likes Hyundai's return policy, however. With GM or Ford, "It is still your problem."
Beyond car manufacturers, some of the nation's savviest marketers have figured out that the best way to get folks who fear job loss to spend money is to promise them a rebate, refund or special deal if they are laid off shortly after the purchase.
"Altruism marketing is a powerful way to say, 'We care,' " says Michael Silverstein, senior vice president at Boston Consulting Group. "I expect to see a lot more of it over the next 90 days."
Tuesday, Walgreens wag will unveil an offer that promises customers of the drug chain's in-store health care clinics free family services for the rest of 2009 if they lose their jobs. It's limited to stuff such as colds, earaches and allergies, not major health issues. "We're doing it because it's the right thing to do," says Hal Rosenbluth, president of Walgreens Health and Wellness division.
Walgreens is just the latest retailer to offer special deals to the jobless. The national unemployment rate hit 8.1% in February.
Who's doing it now:
•Health care. The Walgreens plan is offered at its 342 Take Care Clinics located inside a limited number of Walgreens stores. The service is available to the unemployed and their dependents who are uninsured and had used the service prior to their job loss. (Details: takecarerecoveryplan.com.)
Besides helping the jobless and their families, the move also will build "greater awareness" of the rapidly expanding health clinic chain, Rosenbluth says.
•Airlines. JetBlue jblu is waving flight-cancellation fees — up to $100 per ticket — for customers who lose their jobs. The deal was expanded this month to vacation packages booked via JetBlue.
•Retailers. Jos. A. Bank Clothiers, josb the men's clothing chain, recently took job-loss aid to the next step. Customers who buy its $199 suits and lose their jobs will have their money refunded and can keep the suits. "Like all retailers, we find motivating customers to purchase is challenging," CEO Neal Black says. "We expect to make some long-term customers out of this promotion."
•Business services. FedEx Office fdx this month had 24,000 people take it up on its one-day offer to print 25 free résumés for folks who had lost their jobs. About 890,000 were printed, says CEO Brian Philips, who received hundreds of thank-you notes and e-mails. One Ohio pastor used a church bus to take congregants to the store for the free résumés.