Delphi to Ask to Scrap Contracts
Delphi, the biggest U.S. auto-parts maker, set a Dec. 16 hearing to ask a bankruptcy judge to scrap labor contracts, as the company presses U.S. workers for wage and benefit concessions, a union official said.
The company before the hearing will negotiate with the United Auto Workers, the International Union of Electrical Workers-Communication Workers of America, and the United Steelworkers to try to reach voluntary agreements, said Henry Reichard, chairman of the IUE's Automotive Conference Board. His union represents about 8,000 Delphi workers.
GM Debt Rating Falls Further
General Motors' debt rating, already non-investment grade, was plunged further into junk status by Standard & Poor's because supplier Delphi's bankruptcy may increase parts costs and disrupt production. The rating drops to BB- from BB. S&P did not cut ratings on GM's finance and mortgage units.
Delphi, the automaker's largest parts supplier, filed for bankruptcy protection Oct. 8 after failing to get help from its former parent GM or concessions from unions. GM stock has lost more than a third of its value in 2005.
Ford Executives Resign
Two top Ford Motor executives, Philip R. Martens and Matt DeMars, have informed company officials that they plan to leave the automaker. Martens has worked at Ford for 18 years and headed product development since 2003. He was once described by chief executive William Clay Ford Jr. as a candidate to succeed him. Matt DeMars, vice president for vehicle operations, has supervised manufacturing plants.
Martens and DeMars are leaving as Ford, the world's third-largest automaker, moves to revamp its money-losing North American operations.
Dana to Restate Earnings
Auto-parts maker Dana will restate earnings for the last six quarters to fix improper accounting and will withdraw its 2005 profit forecast. Dana said the restatements for all of 2004 and the first two quarters of 2005 stem primarily from improper accounting involving customer pricing and its commercial vehicle business.
The announcement comes just weeks after Dana said it was cutting its profit outlook for this year in half. The company's stock has lost half of its value since mid-September.
Refco CEO Placed on Leave
Refco, one of the world's biggest commodities brokerages, said its chief executive, Phillip R. Bennett, took an indefinite leave of absence after it discovered he had secretly transferred $430 million of the company's assets to a firm he controlled.
The company also said that its financial statements since 2002 "should no longer be relied upon" and that it would delay filing its quarterly earnings release originally slated for next week. Shares of Refco, which became a publicly traded company in August, fell $12.96, or 45 percent, to close at $15.60 on the New York Stock Exchange. Refco said Bennett has repaid the money -- debts owed the company -- in cash, plus interest.
Employers, Workers to Pay More
U.S. companies will pay an average 9.9 percent more for workers' health insurance next year, almost doubling the average cost per employee of five years ago, according to a survey by Hewitt Associates. The expected 2006 increase is greater than this year's gain of 9.2 percent, said Hewitt, a benefits consulting firm. Employers' average medical expense for each worker will be $8,046 next year, Hewitt's survey found.
The survey is based on an analysis of more than 2,000 health plans covering more than 18 million people. Workers' contributions for health costs have almost doubled since 2002, Hewitt's survey found. Workers' total costs, including premiums and out-of-pocket expenses such as co-payments, will average $3,136, up 11.6 percent from $2,810 this year.
Alcoa said its third-quarter profit edged up 2 percent from the comparable quarter a year earlier, to $289 million, as lower aluminum prices and higher energy costs cut into its earnings. The results include a gain of 4 cents per share from the sale of railroad assets. Sales grew 13 percent, to $6.57 billion.
Compiled from staff and news service reports.