GM Extends Employee Discounts Promotion
Detroit, General Motors Corp. is extending its employee-discount program until Sept. 30 because of its success. The program began on June 1 and was supposed to end Sept. 6. Instead, the company is extending its length and including certain 2006 models. Previously, only 2005 models were eligible for the promotion.
Some Wall Street analysts believe the idea may not be a very good idea because it is lowering GM profit margins, which are already low or nonexistent. GM officials, however, have said the costs of the current promotion are nearly identical to other deals offered before June 1.
The promotion seems to be working quite well for sales. For the first two months of employee discounts, GM’s U.S. sales rose 42% the first month and 20% the second. There has been some talk, however, that August sales may have decreased as much as 10% because of depleted inventories.
Other car companies have jumped on the bandwagon. Ford Motor Co. and DaimlerChrysler also have employee discounts for everyone and are expected to extend their programs through Sept. 30, following GM’s lead.
Wal-Mart Sells $2.5 Billion in 30-Year Bonds
New York City, Wal-Mart Stores Inc. sold $1.5 billion in 30-year bonds on Wednesday, according to JP Morgan. Initially, Wal-Mart planned to sell $2.0 billion. Before the sale, demand for the bonds was expected to be high since 30-year corporate bonds are relatively rare. This sale is Wal-Mart’s second offering since Aug. 8, when it issued $800 million of five-year notes, according to Bloomberg data.
Coach Profits Bigger Than Expected
Chicago, Coach Inc. reported that its quarterly profit would likely beat expectations. The company said strong sales of its handbags for the fall season drove the increase. Coach said first-quarter earnings would be at least 25? per share on sales of at least $445 million. Analysts expected a profit of 24? per share.
Three top Coach executives signed extensions to stay with the company through August 2011: chairman and chief executive Lew Frankfort, executive creative director Reed Krakoff and COO Keith Monda.