Business & Finance
General Motors reported a $1.1 billion loss in the first quarter, its largest in 13 years. The giant automaker's financial struggles are widely attributed to two factors: healthcare costs for 1.1 million employees, retirees, and dependents, and lackluster North American sales in the face of intense competition from Asian rivals. GM's healthcare costs this year could rise 15 percent to almost $6 billion, and the United Auto Workers Union has said it has no intention of renegotiating a four-year labor agreement that runs through 2007. Without offering specifics, however, union spokesmen pledged to do what they can under the agreement to help reduce the healthcare costs.
US Airways and America West Airlines are in advanced talks about a merger that, if realized, could set off a wave of industry consolidation, analysts said. No financial details were available. The carriers complement each other geographically, with routes for US Airways concentrated in the East, and America West serving mostly states west of the Mississippi River. US Airways chairman David Bronner said combining the two would allow them to better compete with discount rivals. With US Airways under bankruptcy protection, any merger would be subject to court approval as well as by creditors, regulators, and each company's board. US Airways is the nation's seventh-largest carrier; America West is the eighth-largest.
In a cash and stock deal valued at $13.6 billion, the world's largest convenience store chain, Seven-Eleven Japan Co., will merge with its parent company, Ito-Yokado, Bloomberg.com reported. The transaction, which also includes the restaurant chain Denny's Japan, will enable Ito-Yokado to reorganize as a holding company, Bloomberg.com said. In February, Seven-Eleven Japan assumed majority control over the chain's US operations, which use the numeral 7 in the name.
Royal Dutch/Shell agreed to sell part of its electric utility business to a consortium of investors for $1.75 billion. The buyers were identified as AIG, the US insurance giant, and the Ontario Teachers' Pension Plan. InterGen, the power-generation group, is based in Burlington, Mass., but the plants included in the sale are in Britain, the Netherlands, Mexico, China, the Philippines, and Australia. Shell and its InterGen co-owner, Bechtel Corp. of San Francisco, will keep plants in the US, Turkey, and Colombia.