Business & Finance
Saying, "It's unfortunate that we've reached this point," a senior Pentagon official confirmed the cancellation of a $9.1 billion project with Lexington, Mass.-based defense contractor Raytheon. The reasons: cost overruns and poor performance. The federal government already had spent $2 billion on the Navy Area Theater Ballistic Missile Defense system, which is designed to protect assets at sea as well as ports, bases, and staging areas from medium-range attack. The cancellation puts as many as 430 Raytheon jobs at risk, reports said.
In a stock-swap valued at $4.7 billion, Sun Life Financial said it will acquire Canadian rival Clarica Life Insurance Co. The deal will make Sun Canada's largest carrier and will propel it into the top five publicly traded life insurers in North America. The merger is expected to result in 1,500 job cuts. Sun Life is based in Toronto; Clarica in Waterloo, Ontario.
Micron Technology, the world's second-largest maker of memory chips, will buy the US semiconductor operations of Toshiba Corp., the companies announced. The Japanese electronics giant's Dominion subsidiary, which produces chips for personal computers, is in Manassas, Va. Terms were not disclosed, but Toshiba said it will take a $315 million charge as a result of the sale and now expects to be able to speed up plans to cut 3,000 jobs from its payroll. It was not immediately clear how the deal would affect Micron's ongoing discussions over an alliance with Hynix Semiconductor of South Korea, although Hynix negotiators were en route to the US and a spokesman advised against "jumping to any conclusions." Micron is based in Boise, Idaho.
Another 1,760 workers soon will join the ranks of the unemployed in Britain, where electronics giant NEC announced the closure of a semiconductor plant and Airbus SAS said it will lower its payroll through a combination of layoffs and reduced working hours. NEC will idle 1,260 people when its Livingstone, Scotland, chip plant shuts its doors in April. The decision by Airbus affects 500 jobs, but a company spokesman said another 2,000 could be eliminated unless employees agree to such cost-cutting measures as the elimination of overtime.
