There's no telling how many companies are cracking down on abuse of employee discount policies, but one company that recently announced doing so is GM. The logic is simple: Passing the employee discount to a non-employee costs the company money. GM says that the employee purchase program can save a buyer from $1,000 to $9,000.

Imagine an employee buying a car for her uncle using the employee discount. There was clearly a significant savings (the reason why the employee and family member did this in the first place) and GM loses a sale of a car to a legitimate customer which might have been profitable. Multiply this situation by hundreds or thousands, and it's easy to see that GM has lost a lot of money.

Certainly GM is not the only company that struggles with this issue. I'd venture to guess that it has a firm policy about the discount, but hasn't strictly enforced it in the past, when the economics of the car business were better.

General Motors has announced an official shift from the production of large, gas-guzzling vehicles to smaller more fuel-efficient sedans. If you didn't see this coming then you're surely living under a rock. High gas prices have forced a change in car-buyers. They simply aren't buying SUVs and larger trucks like they used to, and car companies have finally realized that the key to their financial future is changing their business accordingly.

GM's "official" announcement of the switch to focusing on more fuel-efficient vehicles is discussed in this video. The company made tons of money on larger vehicles, but has suffered in the last year. Let's hope that this wise shift in their business model will help shore up the company's financial future.




Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.