Business & Finance
Concerns about a "brain drain" at Morgan Stanley, the investment banking giant, deepened as two more top officers resigned Wednesday. The departures of Joseph Perella and Terry Maguid bring to five the number of senior executives who have left the company in the past month, and analysts said their loss almost certainly will increase pressure by some major investors to oust controversial chairman Philip Purcell. Eight former executives have been campaigning publicly against Purcell via full-page newspaper ads and other means - accusing him of ruthlessly consolidating his power at the same time the company has underperformed. In a letter to the dissidents, however, Morgan Stanley's board said it had full confidence in Purcell and that their campaign against him was responsible for the recent turmoil, The Toronto Globe and Mail reported.
Siebel Systems, a once high-riding maker of software for business applications, replaced its chief executive for the second time in less than a year. George Shaheen, a longtime board member, will succeed Mike Lawrie, who was unable to halt falling sales. The company is based in San Mateo, Calif.
Although trying to emerge from more than a year in bankruptcy, one of Canada's largest steelmakers rejected a $1.1 billion offer of new equity from Brascan Corp., the Toronto asset management giant, and the United Steelworkers of America. Stelco Inc. of Hamilton, Ontario, said it preferred raising money from capital markets. Brascan, it said, had declined an invitation to submit a financial offer months ago and "for them to pop up now, we think, is a little bit inappropriate."
Northwest Airlines, which had anticipated that its plans to ground aging planes would lead to layoffs, announced that 600 mechanics will be let go or transferred, effective in July. Northwest, which is in contract negotiations with its flight attendants, ground workers, and mechanics, is seeking to save at least $1.1 billion a year in labor costs.
Black & Decker Corp., the nation's leading maker of power tools, said it will close its Fayetteville, N.C., plant, eliminating 675 jobs. The company will shift its metal-casting and motor manufacturing operations to plants in Jackson, Tenn., and Reynosa, Mexico.