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Business Today

Discounts continue to drive car sales up

By wire services
Published July 22, 2005

Discount programs that let consumers pay the employee price for new vehicles are paying off for the Big Three U.S. automakers this month, according to sales estimates released Thursday.

Through the first 15 days of July, according to the Power Information Network, an affiliate of auto industry analyst J.D. Power and Associates, General Motors Corp.'s sales were up 42 percent over last July, Ford Motor Co.'s sales were up 27 percent and DaimlerChrysler AG's sales were up 11 percent.

United Airlines on Thursday concluded a contentious effort to wring out more labor costs in a bid to leave bankruptcy when its machinists union announced ratification of a new contract. The agreement with the International Association of Machinists and Aerospace Workers cuts pay by up to 5.5 percent and trims some benefits, which should save United about $175-million annually.

After more than a quarter-century as a public company, Toys "R" Us Inc. is now a private corporation. The $6.6-billion acquisition of the nation's second-largest toyseller was completed Thursday by two private equity firms, Kohlberg Kravis Roberts & Co. and Bain Capital Inc., and a real estate developer, Vornado Realty Trust.

A fired Wal-Mart Stores Inc. vice president accused the company on Thursday of sullying his reputation with public criticism and reiterated claims that he was terminated after he drew attention to misspending by an upper-level executive. Jared Bowen sued Wal-Mart on Thursday for defamation, claiming the company has characterized him as "a liar, a thief, and a fraud." The world's largest retailer fired Bowen about the same time former vice chairman Tom Coughlin was accused by the company of misspending up to $500,000. Wal-Mart has said Bowen was a part of the scheme.

Fired HealthSouth Corp. chief Richard Scrushy asked a judge Thursday to end the government's lawsuit accusing him of leading a $2.7-billion fraud, arguing the case should be dismissed since a jury acquitted him of separate, criminal charges. In a 24-page brief, Scrushy claimed the lawsuit, filed in 2003 by the Securities and Exchange Commission, should be thrown out since the Department of Justice criminal investigation failed to result in his conviction.

A jury awarded $700-million in punitive damages to the state of California on Thursday in its lawsuit against a French company that took part in a scheme to illegally acquire failed insurer Executive Life. But the damage award may not stand because it appears to run afoul of federal law. Lawyers for the French firm, Artemis SA, said the award violates federal law because it came without a compensatory award.

We still have a sweet tooth, but at least we're trying.

A recent study says U.S. sales of low-sugar and low-fat candies quadrupled between 2000 and 2004.

Last year, consumers bought an estimated $495-million in diet candy, compared with $118-million four years earlier, said the report by Packaged Facts, a division of Rockville, Md.-based MarketResearch.com.

While the growth slowed over the past year as the low-carbohydrate diet craze cooled off, experts said they expect diet candy to remain a key piece of the $26-billion industry.

"People, adults and kids, are getting heavier, and there are well-publicized efforts to crack down on junk food advertising and availability, particularly in schools," said Don Montuori, an editor of the study. "In this climate, as a marketer you can make a stronger case for a sweet that is "low' in something better than a sweet that is full-bore caloric and fattening."

Hold up, Congress is telling the Internal Revenue Service.

Lawmakers want the IRS to halt plans to close 68 taxpayer help centers, concerned that the tax collectors could be making a penny-wise, pound-foolish decision.

In separate spending bills for the tax agency next year, House and Senate lawmakers told the IRS to delay its plans to close the centers until independent auditors study the effect on taxpayers.

In May, IRS commissioner Mark Everson announced the planned closure of 68 help centers this fall in anticipation of cuts to the agency's budget for customer service. Among the centers slated to close is one at 9450 Koger Blvd. in St. Petersburg.

The nation's largest direct marketing group set up a registry Thursday to remove dead people from its telemarketing, e-mail and direct mail lists - for $1.

The Direct Marketing Association, which has more than 5,200 members in the United States and 44 other countries, said its Deceased Do-Not-Contact list was designed to help families dealing with the loss of a loved one.

"It's horribly upsetting to someone who's alive if you get a call and it's for your husband who has passed away," said Mitch Katz of the Federal Trade Commission.

The DMA said the $1 fee was for credit card verification, and was designed to prevent fraud.

"We're concerned people will abuse the list, putting the names of friends on it, that kind of thing," said Pat Kachura, a DMA executive.

Information from the Associated Press was used in this report.

[Last modified July 22, 2005, 00:32:15]