Top 2007 Business Headlines In Central Mass.
By Matthew L. Brown and Livia Gershon
Worcester Business Journal Staff Writers
Here's a quick refresher course on the most important business stories of 2007:
TJX Data Breach
In January, Framingham-based discount retail company TJX Companies Inc. acknowledged a data breach that may have exposed more than 100 million credit cards to possible fraud. By the end of the year, the company had reached settlements with customers, credit companies and New England banks. The company also elected a new CEO in 2007, Carol Meyrowitz, replacing interim CEO Bernard Cammarata.
Boston Scientific's Troubles
Hobbled by product recalls, safety questions about its defibrillators and stents, and debt incurred in the 2006 purchase of heart rhythm company Guidant, Boston Scientific Corp. started slashing costs. The Natick-based company announced plans to cut 2,300 jobs worldwide and sell off some of its businesses. Boston Scientific said it will cut about $525 million in expenses next year, plus an additional $25 to $50 million in 2009, ultimately reducing its work force by about 13 percent.
CitySquare
The huge mixed-use CitySquare project in downtown Worcester once again failed to get off the ground in 2007. Developer Young Park, of Berkeley Investments Inc., said he is waiting for tenants to speak for 275,000 square feet of the space before he will begin demolishing the former Common Outlets and start construction. Recent talk from the city manager indicates demo before the so-called trigger tenant provision is satisfied.
Housing Market Mayhem
A crumbling housing market and waves of foreclosures dumped homeowners out on the street and sent many real estate agents and mortgage brokers scurrying into new lines of work. The trend hit economically disadvantaged cities like Worcester and Fitchburg especially hard. In Worcester County, home sales for the first nine months of the year were down 28 percent from the same period in 2006. The number of homes sold across the state hit a 16-year low in November.
Mello's Discovery Hits Wall Street
RXi Pharmaceuticals Corp. of Worcester announced its intentions to become a publicly traded company, filing plans for an $11 million offering. The company develops RNAi therapies, based partly on the work of UMass Medical School researcher Craig C. Mello, who won the 2006 Nobel Prize in physiology or medicine. It has operated as a majority-owned subsidiary of California-based CytRx since January.
Managing Managed Competition
In the fall, the state began regulating the automobile insurance industry using a "managed competition" plan. The plan allows insurers to set their own rates, which are then subject to approval by the state Division of Insurance. State regulators had set rates since the 1970s. State Insurance Commissioner Nonnie S. Burnes intended managed competition to result in lower rates, and not long after it was enacted, insurance companies began announcing rates more than 7 percent lower.
Health Care Reform Takes Effect
As of July 1, all residents of Massachusetts were required to have health insurance. There was a lot of run-up to the deadline, and even after the deadline passed, the television commercials reminding residents to get themselves insured still aired. The state set up the Commonwealth Health Insurance Connector Authority to help get people insured, and businesses were required to put employees on company plans by the deadline as well.
3Com Buyout Draws Interest
Marlborough-based 3Com had an interesting year of the pig. It lost nearly $19 million in the first quarter and spent $882 million to buy out partner Huawei Technologies' 49 percent stake in the joint Huawei-3Com Ltc. Later in the year, private equity giant Bain Capital Partners said it would pay $2.2 billion for 3Com, but would submit for a national security review of the buyout. Huawei, which has close ties to China's government, would get a 16.5 percent stake in 3Com if the deal goes through. The deal is still up in the air.
Sunny Days For Devens
The state's hopes for a growing alternative energy sector are firmly pinned on one company: Evergreen Solar. The maker of solar panels announced plans in April to build a brand new headquarters in Westborough. But before any permits could be pulled on the $200 million project, news came that the company would be building at Devens. The building is expected to be complete next year.
Commerce Group Says Sí To Buyout
Webster-based Commerce Insurance Group agreed to be acquired by Spain's largest insurer Mapfre SA for $2.21 billion in cash. Commerce officials have said no job losses are expected once the deal is closed in 2008. The acquisition has caught the eye of Massachusetts Attorney General Martha Coakley as to "whether the proposed merger may violate the Massachusetts Antitrust Act or the Massachusetts Consumer Protection Act."
Think we missed a big story? Let us know! E-mail editorial@wbjournal.com with your comments.
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