Tyco International Ltd. revealed details of its sweeping reorganization plan, among them the "consolidation" of 219 facilities and the layoffs of 7,200 employees. In a lengthy statement, the company said it will "exit" more than 50 businesses, such its undersea fiber-optic telecommunications network, which will be offered for sale. The restructuring effort is expected to save $230 million a year by 2005, the statement said. The company's most recent problems surfaced early last year in the form of an accounting scandal, the resignations and subsequent indictments of two former senior executives for fraud, a series of operating losses, and a steep drop in its share price. In July 2002, it felt the need to publicly deny rumors that it would file for bankruptcy. Tyco is based in Bermuda but maintains its headquarters in New Hampshire.
Five former Prudential Securities brokers and two ex-managers were to be charged Tuesday with securities fraud by federal and Massachusetts state regulators, the latest moves in the ongoing probe into allegedly improper mutual-fund trading. Meanwhile, the chief of the Securities and Exchange Commission's Boston office resigned under fire for a slow response to the scandal.
In a $2.2 billion deal, deeply indebted Dynegy Inc. sold Illinois Power, a key asset, to electric utility Exelon, the Financial Times reported. Analysts anticipated further selloffs by the Houston energy firm as it continues to recover from heavy losses and increased scrutiny in the wake of the Enron collapse. Exelon is based in Chicago.
General Motors will build and sell Cadillacs in China, a senior executive announced. But not revealed were such details as which of the eight Cadillac models will be involved or their prices. The announcement said manufacturing capacity in China will be increased by half to meet demand - sales of all vehicles there have climbed 30 percent so far this year - but that at least some Cadillacs will be built elsewhere and imported. GM already markets Buicks and Chevrolets in China.
Unionized workers voted to strike at 58 Kroger's supermarkets in Indiana as soon as Wednesday, rejecting what the nation's largest grocery chain called its "last, best, and final" contract offer Monday. A proposal to raise healthcare contributions is the main sticking point. The United Food and Commercial Workers Union represents 4,000 Kroger employees in the state. The company is based in Cincinnati.