Business in brief
EU blocks GE merger, fearing dominationNEW YORK — General Electrics $41 billion purchase of Honeywell International was vetoed Tuesday by the European Union — the first time a merger of two U.S. companies has been stopped solely by European regulators.
The decision by the EUs 20-member Competition Commission in Strasbourg, France, was unanimous.
The merger would have severely reduced competition in the aerospace industry and resulted ultimately in higher prices for customers, particularly airlines, EU Competition Commissioner Mario Monti said.
GE chief executive Jack Welch left open the possibility of an appeal, characterizing the widely expected rejection as a setback. But analysts said the deal — one of the biggest industrial mergers in history — is probably dead. Subway restaurants settle suit for $10 millionSEATTLE — An 8-year-old boy who contracted hepatitis A and needed a liver transplant after eating at a Subway sandwich outlet won a $10 million settlement.
The settlement announced Monday resolves a lawsuit filed by Christian Decker and his parents, who ate at a Subway outlet in September 1999.
The boy was the most seriously affected of the 35 people known to have contracted hepatitis A in the outlet. Unlike the others, who recovered, Christian had to undergo a lifesaving liver transplant in November 1999.
He is expected to need another transplant eventually and will be on medication for the rest of his life to keep his body from rejecting the transplant, according to court documents.
Others who became ill in the outbreak settled a separate class-action lawsuit for more than $1 million last year.Engine cracks has airlines grounding jetsATLANTA — Airlines have grounded several Boeing 757 jets while they scramble to make repairs or find replacement parts because of cracks in the air-flow blades of their Pratt & Whitney engines.
At least two in-flight engine failures have been blamed on the cracks since late last year.
The cracking has happened in the stator vane, a stationary blade made of steel alloy that helps direct air flow through the engine.
The cracking can cause an engine to shut down. But the 757 has two engines and can fly on one.
We believe the cracking is caused by the variety of pressures the engine is undergoing, said Mark Sullivan, a spokesman for Pratt & Whitney.
Pratt & Whitney, based in East Hartford, Conn., is working with airlines to repair or replace the part, which it is redesigning. But the new design will not be tested and certified for use until December.IBM trims 1,500 workers from GS groupARMONK, N.Y. — After adding more than 10,000 employees this year, IBM Corp.s burgeoning Global Services group is laying off about 1,500 workers.
The cuts are being made at various U.S. locations to respond to changing client demand and do not reflect a business slowdown, IBM spokeswoman Jan Butler said Tuesday.
Global Services, IBMs consulting and outsourcing arm, is one of the companys fastest-growing units. According to Gartner Dataquest, it is the worlds largest information technology services unit.
With the hiring of more than 10,000 new workers in the first five months of 2001, it now employs some 150,000 workers. IBM counts more than 315,000 employees worldwide.
Shares of IBM were off $1.15 to $113.20 in trading Tuesday on the New York Stock Exchange.Dow Chemical says earnings to fall shortNEW YORK — Dow Chemical Co., the second-largest chemical company in the U.S., said it does not expect to meet its previous earnings expectations as demand has not been as strong as had been anticipated, affecting both volume and price.
The company now expects to earn 33 cents a share in the second quarter, down from its previous guidance of 35 cents to 45 cents a share. Analysts had expected Dow to earn 33 cents a share. It will release final earnings on July 26.
The Midland, Mich.-based Dow lost $685 million, or 76 cents per share, in the first quarter. Excluding a $1.4 billion charge related to its takeover of Union Carbide, the company would have earned 26 cents per share.
Dows earnings have been affected by the high energy prices over the last year. Chemical companies such as Dow depend on natural gas-related raw materials, such as hydrocarbons, to make its products, which range from plastics to pesticides. Natural gas prices spiked to record levels this winter because of low natural gas storage levels.
Copyright © 2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.