As expected, General Motors announced plans to lay off 12,000 employees over the next two years - all of them in Europe. The world's largest automaker said the job cuts, which are projected to help save $617 million annually, are necessary because its Saab, Opel, and Vauxhall divisions are losing money and their expectations for growth are sluggish. Ninety percent of the layoffs will come in Germany, with "heavy emphasis on managing and engineering," a GM spokesman said.
Coventry Health Care Inc., which provides benefits plans to large employers and managed-care services for 2.5 million individual enrollees, said it is buying First Health Group Corp. for $1.8 billion in cash and stock. If OK'd by stockholders and regulators, the deal would create a national company capable of providing insurance and administrative services to a broad array of clients. Coventry is based in Bethesda, Md.; First Health in Downers Grove, Ill.
In a deal valued at $1.8 billion, the world's largest developer of toll roads and a partner won a contract to build a 25-mile turnpike linking two suburbs of Melbourne, Australia. Macquarie Infrastructure Group and Leighton Holdings Ltd., both of Sydney, are expected to finish the road in time for a December 2008 opening. It's projected to carry an average of 270,000 vehicles a day in its first year, with tolls pegged to the consumer price index. Macquarie has built 25 such highways in eight countries.
Kroger Co., the nation's biggest supermarket chain, faces a potential strike by 8,500 unionized cashiers, clerks, and baggers as early as Friday night - as their labor contract expires. The affected employees work at stores in Kentucky, Indiana, and Ohio. (Kroger's headquarters are in Cincinnati.) The company and the United Food & Commercial Workers Union are wrangling over healthcare costs, wages, and pensions. Kroger, still feeling the effects of a 4-1/2-month labor dispute in southern California that ended in February, says its employees must contribute more to their own healthcare benefits program if the company is to survive competition from Wal-Mart and other nonunion stores that sell groceries at a discount.