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Friday, 20 April, 2001, 16:45 GMT 17:45 UK
Honeywell slashes 6,500 jobs
Honeywell has been hit financially by the pending merger
Honeywell International, which manufactures goods ranging from aircraft electronics to security systems, is to cut 6,500 jobs, about 5% of its workforce.
The firm blamed the combination of harsh economic conditions and high energy and raw material costs. Honeywell has been hanging in limbo while waiting to be taken over by the world's largest company General Electric (GE). In sharp contrast, GE reported a surge in profits of 16% earlier this month. Missed estimates "Honeywell has not been immune to the current economic downturn," said the firm's chairman Michael Bonsignore. All four of Honeywell's major businesses reported declining profits during the last three months.
But even excluding the cost-cutting measures, Honeywell missed Wall Street's estimates. When GE's bid emerged last autumn, Honeywell announced that just 550 jobs would go at its corporate headquarters. Waiting for clearance The pending merger with GE has also hit Honeywell financially as it has delayed selling underperforming business units that it had previously planned to ditch. The EU launched a full investigation into the planned merger of GE and Honeywell, and is expected to announce its decision in July. Both companies say they are confident of winning approval from both the EU and US regulatory authorities. GE agreed to pay $45bn in stock for Honeywell in what is thought to be the largest industrial takeover yet. Honeywell's share price was down 1.22% to $47 in morning trade in New York, giving the firm a share by market value of $37.5bn. |
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