Indeed, GM's problem right now is that they're not selling cars at a profit, but they had a short term problem of TONS of overstock. When you're overstocked, you can't make money on the new cars because dealers don't order any new vehicles when they have plenty of old ones.

What the employee discount programs did for GM was prove that there is life after rebates. GM is guilty of playing the rebate game more than anyone else, and it makes them look bad as a company when they do it - as if their cars weren't enough to make them look bad! With the employee discount program they went basically to flat, no-haggle pricing and cut out pretty much all rebates. If you wanted a car, you could just look up the "employee" price and go to a dealer and pay that price, no haggling, no endless searching to see if you're getting every rebate you're supposed to.

GM has spent quite a lot of press time pointing out that this was extremely effective at quickly reducing their 2005 inventory levels as well as building brand excitement and getting more GM's in the hands of customers. What they're not so publicly announcing is that they may build on the success of this program and expand the flat pricing program to more brands than just Saturn. I think that would be a great way to set themselves apart from a lot of other makers by pushing no-haggle pricing into the mainstream.