Business & Finance
The value of shares in Merck & Co. appeared certain to open the week at or near $28.06 - a drop of almost 8 percent from last Friday morning - after the pharmaceutical giant lost a trial verdict in Texas involving its painkilling drug Vioxx. Merck pulled the drug from the market a year ago next month after a study pointed up its potential risk to the health or even the lives of users. In the Texas case, the jury awarded the widow of a man who'd been taking Vioxx at the time of his death $253.4 million in damages. The amount will be reduced by about 90 percent because of a Texas law that caps such awards, legal experts said. But at least 4,200 other Vioxx-related suits are pending in state and federal courts, and Merck's overall liability is projected as high as $18 billion.
Northwest Airlines mechanics, cleaners, and building custodians were picketing at 35 airports across the US in a walkout that began at 12:01 a.m. Saturday over the carrier's demand that they accept pay reductions and layoffs. To take up the slack, Northwest pressed into service about 1,900 managers, contract workers, and vendors and began its reduced fall schedule almost three weeks early. The airline is seeking to lower labor costs by more than $1 billion a year, but the union representing the employees who walked off the job says that strategy would affect its members disproportionately, costing 1,500 jobs.
Delta Air Lines notified its unionized pilots that it may ask for additional concessions because cash reserves have fallen below the threshold agreed to last November, when the latter OK'd give-backs aimed at saving $1 billion a year. The threshold has yet to be disclosed publicly, but Delta reported that it had $1.7 billion in unrestricted cash and short-term investments as of June 30. The carrier is widely perceived as nearing the point where it will have to file for bankruptcy.
In a deal valued at $2 billion in cash, the owner of the Hapag-Lloyd container shipping line, TUI AG, agreed to buy rival CP Ships Ltd. The merger is the second in the industry this month and its second-largest. Earlier, Danish shipping giant A.P. Moeller-Maersk bought Dutch competitor P&O Nedlloyd for $2.8 billion. TUI, which also operates Europe's leading tourism business, is based in Hanover, Germany. CP Ships is a joint Canadian-British company incorporated in Saint John, New Brunswick, but with its headquarters in Gatwick, England.