Employee-Pricing Boosts Sales
Sales at U.S. automakers increased due to programs that let customers buy vehicles at the employee price. General Motors said its July sales were up 19 percent compared with July 2004. Ford Motor's sales rose 35.5 percent, and the company said its F-series trucks set a record for the highest monthly sales of any vehicle since the 1920s.
GM's employee-pricing program was so successful in June that Ford and DaimlerChrysler's Chrysler Group matched the program in July. The employee-pricing plans were scheduled to end Monday, but Ford and GM are extending employee-pricing on 2005 vehicles until Sept. 6, and Chrysler is extending the deal indefinitely. Ford also is discounting some 2006 models.
Bomb Contract Competition
A recent Pentagon inspector general report agreed with an earlier overseer's recommendation that the Air Force hold a new competition for a $1.7 billion Boeing contract to build a small-diameter bomb. The probe followed a Lockheed Martin protest that Boeing won the contract because Darleen A. Druyun, a former Air Force procurement official, admitted showing Boeing favoritism for years. The July 15 IG report reinforced the findings on the Government Accountability Office in the case.
The Air Force has already said it would hold a competition for the second phase of the program, which requires the bomb to hit moving targets in addition to stationary ones.
Avis, Budget Lower Age Limit
Cendant said that its Avis and Budget car rental divisions will lower their age requirements to 21 from 25 years old starting today. The action is aimed at the estimated 14 million U.S. drivers between 21 and 25, the companies said. Drivers under 25 will be charged an extra $25 a day because research shows they have more accidents, a Cendant spokeswoman said.
MERGERS & ACQUISITIONS
Whirlpool Faces Maytag Deadline
Whirlpool must submit a firm offer to buy Maytag no later than noon Tuesday, according to an agreement between the two companies. The confidentiality agreement specifies that neither company can try to acquire control of the other without permission during the three years after Maytag opened its books to Whirlpool. Whirlpool's offer, which remains tentative, stands at $18 per share, or $1.43 billion.
Smithfield to Cut Antibiotics Use
Smithfield Foods, the world's largest hog producer, agreed to stop feeding certain antibiotics to pigs sold to Compass Group's North American unit.
The agreement is part an accord among Smithfield; Compass Group, the world's largest caterer; and advocacy group Environmental Defense. Environmental Defense has claimed that using low levels of antibiotics for growth purposes creates bacteria that can resist certain diseases.
United Bankruptcy Plan Delayed
United Airlines' more than 21/2-years of bankruptcy protection could extend into next year now that its parent company has delayed filing a reorganization plan at the request of its creditors' committee, which sought more time to review documents. UAL said that it now plans to file the plan and a disclosure statement, which together provide a blueprint for the Chicago-based carrier's exit from protection, in about one month.
Personal Income, Spending Rise
Americans earned and spent more in June, as the job market improved and automakers enticed consumers with discounts. Personal incomes rose 0.5 percent, more than twice the gain in May, and spending increased 0.8 percent after no change the previous month, the Commerce Department said. Separately, the department said factory orders increased 1 percent in the June, the fourth straight monthly increase.
Valero Halts MTBE Production
Valero Energy announced that it will stop producing methyl tertiary butyl ether because the energy bill approved by Congress leaves the oil refiner open to product liability lawsuits related to groundwater contamination. The move will cut gasoline output at the San Antonio company's refineries by about 60,000 barrels a day, a spokeswoman said.
Lawsuits Affect Marsh's Results
Marsh & McLennan, the world's largest insurance broker, said second-quarter profit fell 57 percent after the company stopped demanding fees from insurers to settle a lawsuit from New York state Attorney General Eliot L. Spitzer.
Profit fell to $166 million, and revenue rose 2 percent, to $3.1 billion. Insurance brokerage revenue fell 18 percent, to $1.03 billion, hurt by the loss of fees Spitzer called kickbacks and declining insurance prices that crimped client commissions.
Compiled from staff and news service reports.