Colgate-Palmolive, the consumer products giant, plans to cut its worldwide workforce by about 12 percent, or 4,400 jobs, and close one-third of its 78 factories as part of a four-year restructuring effort. The job cuts will come mostly from manufacturing, chief executive Reuben Mark said during a conference call with investors. The New York company faces increasing competition from rival Procter & Gamble and has been grappling with higher costs for raw materials, gas and packaging. Colgate said the plan would generate savings of $250 million to $300 million annually by the fourth year of the program. It plans to invest the savings from the closures in sales and marketing initiatives. Separately, the Associated Press reported that Colgate-Palmolive disclosed in a regulatory filing that many of its top executives and officers are given allowances of up to $11,500 a year to spend on goods and services such as pet sitters, running shoes, karate lessons and movie rentals. "Colgate has consistently tried to be fair and very modest in this distribution of any perquisites," a company spokesman said.
Teen Harassment Lawsuit Settled
The owners of a Burger King franchise in suburban St. Louis will pay $400,000 to seven former teenage employees to settle a sexual harassment lawsuit, the Equal Employment Opportunity Commission said. The women claimed that from December 2000 to April 2001, restaurant manager Nathan Kraus subjected them to repeated groping, vulgar sexual comments and demands for sex, according to the lawsuit. A consent decree requires franchise owners to pay damages and fees and not to rehire Kraus. They also must conduct sexual harassment training for management, distribute a revised sexual harassment policy and more prominently post in their restaurants a hot line number for reporting harassment.
Bethesda-based Lockheed Martin received a $112.2 million order from the U.S. Air Force to produce 288 Joint Air-to-Surface Standoff Missiles, which have infrared seekers and anti-jam satellite navigation systems. The Air Force is restocking long-range weapons depleted by fighting in Iraq and Afghanistan.
(Leslie E. Kossoff -- AP)
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Johnson & Johnson is reportedly negotiating to acquire medical device maker Guidant for more than $24 billion. Driving the merger for Johnson & Johnson is the coming loss of patent protection on some of its key drugs and the attractiveness of Guidant's pacemakers and defibrillators. There has been speculation for months that the two were discussing a merger.
DaVita, the fourth-largest dialysis provider, agreed to buy Gambro's U.S. clinics for $3.1 billion in cash. The acquisition would double the number of people using DaVita's services to 96,000 patients at more than 1,200 U.S. sites, and the company would have combined sales of about $4.4 billion. DaVita and Gambro expect to complete the deal in the first half of 2005.
Merck has appointed a committee of board members and a retired federal judge to review the pharmaceutical giant's actions before it pulled arthritis drug Vioxx from the market. The committee will respond to shareholder lawsuits over Vioxx, which Merck stopped selling Sept. 30 after a study showed it raised the risk of heart attack and stroke.
Hewlett-Packard's board of directors considered breaking up the company on three separate occasions, but each time directors unanimously concluded it would be best to keep HP together, HP chief executive Carly Fiorina told analysts in response to a question on whether breaking up the company would provide greater returns to shareholders. Fiorina said the company would incur "real costs" if it broke up and that the complicated process could drag on for years.
The productivity of U.S. workers grew in the third quarter at the slowest quarterly pace in almost two years, the Labor Department reported. Productivity, a measure of how much an employee produces for every hour of work, slowed to a 1.8 percent annual rate from a 3.9 percent pace in the second quarter. Labor costs also rose at a 1.8 percent annual rate, the second straight quarterly gain.
Consumer non-mortgage borrowing grew by $7.7 billion in October, following a revised $13.6 billion increase in September, the Federal Reserve reported. The gain left total outstanding debt at a record $2.1 trillion. Revolving credit, including credit cards, rose $1.2 billion in October, while non-revolving credit, including car and mobile home loans, advanced $6.5 billion, the Fed said.
Credit Suisse Group plans to merge its Credit Suisse First Boston securities unit with the rest of the company's banking operations within two years, ending 72 years of independence for the investment bank, which may drop "First Boston" from its name. Credit Suisse chief executive Oswald Gruebel and CSFB chief executive Brady W. Dougan told investors that as many as 300 of CSFB's 16,000 jobs will be eliminated as part of an effort to boost profit at the investment bank to at least 3 billion Swiss francs in 2007 from about 1.1 billion francs last year.
The California Public Employees' Retirement System agreed to disclose the fees it pays to venture capital and hedge fund managers as part of a legal settlement. Calpers will develop spreadsheets showing annual profits received from, and expenses paid to, 300 private equity and hedge fund partnerships.
NASD ordered Citigroup Global Markets to pay a $275,000 fine plus restitution for allegedly recommending two high-risk commodity futures funds to people who shouldn't have invested in them and failing to fully disclose the risks. The Citigroup division agreed to return as much as $203,000 to 45 customers. In one case, a customer with a $25,000 net worth had just lost her job, and the $4,000 she invested in the futures fund came from her individual retirement account, NASD said.
The Federal Deposit Insurance Corp., which insures deposits at more than 9,000 U.S. banks and thrifts, will cut the number of its employees by 12 percent, or 674 jobs, next year as companies are acquired and fewer institutions fail. The five-member FDIC board voted unanimously to adopt a $1.1 billion 2005 budget. An FDIC spokeswoman said that fewer banks and electronic communication reduces the need for bank examiners.
Three supermarket chains agreed to pay $22.4 million to settle a class-action lawsuit by janitors who said they were illegally classified as subcontractors and underpaid at hundreds of Southern California stores. The payment will be shared among at least 2,100 janitors who worked at Albertsons, Ralphs Grocery and Safeway's Vons supermarkets between 1994 and 2001.
General Motors is not responsible for injuries suffered by a 34-year-old man when his 2003 Chevrolet Tahoe rolled over, a Texas jury ruled. The accident victim, who was left quadriplegic, argued that the Tahoe is prone to rolling over and that the roof does not protect occupants during a rollover. The jury said there were no defects in the Tahoe and awarded no damages. General Motors said the roof of the Tahoe exceeds federal requirements for roof strength.
