General Electric and Honeywell International terminated their $41 billion merger agreement three months after European regulators rejected the deal. GE agreed to reimburse Honeywell for merger-related expenses and to extend two financing arrangements. GE also agreed to buy for undisclosed terms two Honeywell subsidiaries: Tensor, a maker of sensors for the oil and natural gas industries, and Honeywell Advanced Composites.
Bankruptcy protection was to be sought by Sabena, the Belgian airline, as the Monitor went to press. But the Brussels government said it could provide the carrier with enough emergency credit to continue operations for about a month if such a move fell within European Union rules. Sabena failed to receive a promised payment of about $120 million Tuesday from Swissair Group, its minority owner. Meanwhile, shares in that bankrupt company plunged 96 percent in value as trading resumed after a two-day suspension. Its planes also remained grounded, leaving 39,000 ticket-holders without reimbursement and forced to look for alternative transportation.
Struggling Nortel Networks introduced its new chief executive officer but said it must cut another 20,000 jobs to break even in future quarters. The company said it expects to report a $3.6 billion third-quarter loss. The payroll reductions will bring to 50,000 the number of layoffs announced in recent months, lowering the Canadian telecommunications giant's workforce to less than half its size when the year began.
Xerox announced it will transfer half of its manufacturing operations to Singapore-based Flextronics as part of its effort to return to profitability and improve productivity. The five-year deal represents more than $1 billion in annual costs and also will involve the sale of certain Xerox assets for $220 million. Flextronics will make Xerox office equipment and components. Xerox will continue to make high-end printers while designing other products.
Nordstrom, the upscale department store chain, will cut 1,600 jobs, the Seattle Times reported. The company, whose headquarters are in Seattle, said the cuts will affect both its sales and support staff. Nordstrom operates 126 stores in 25 states.