General Motors Corporation and Subsidiaries - Page 10




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          monthly payment to GMAC due on the retail customer's RISC for a              
          stated period.                                                               
               C.  Oversight of Incentive Programs                                     
               During the 1980's, GM's "Price Review Group" made the                   
          decision to provide dealer incentives, incentives to dealership              
          salespeople, and retail sales incentives.                                    
               D.  Retail Rate Support Programs                                        
               1.  History and Overview                                                
               Around 1980, the domestic car market in the United States               
          was extremely depressed.  The United States was coming off the               
          second oil shock.  In 1980, GM incurred only the second year of              
          losses in its history.  It was a traumatic time for GM, and there            
          was a lot of effort and work going on at GM to try to stimulate              
          sales of motor vehicles.                                                     
               At this time, GM was offering direct rebates to customers;              
          however, the programs were not effective at increasing sales of              
          GM vehicles to the desired levels.  GM executives believed that              
          sales were depressed due to the very high interest rates that                
          were present in the U.S. economy at the time.  During 1980, the              
          prime rate of interest hit a high of approximately 21 percent.               
               GM was considering using sales allowances to try to find                
          something that was more attractive to customers than rebate                  
          programs, which had lost their luster in the then existing high              
          interest rate environment.  In 1980, GM executives made proposals            





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