In Brief

HARRISBURG, Pa.

Hershey proposes to upgrade plant and reduce work force

The Hershey Co. is proposing to slash up to 600 jobs in a move to modernize and expand one of its hometown plants and turn the other -- the original chocolate factory built by founder Milton Hershey -- into an office building.

The plan, announced Tuesday, is part of a tentative agreement with union negotiators and must be approved by a majority of the approximately 1,600 members who work at both factories. A vote is set for Friday.

Locals fear the nation's second-largest candy maker is slowly but surely leaving the town built by Mr. Hershey. The 105-year-old plant at 19 E. Chocolate Ave. in Hershey greets passersby with the smell of chocolate, and streetlights in front of it are capped by giant metal models of Hershey's chocolate Kisses. Corporate offices just won't give the same feel.

But Wolf said she and others fear that if members of Chocolate Workers Local 464 reject the plan, even steeper job losses could result.

TORONTO

Canada raises interest rates, watches global economy

Canada on Tuesday became the first Group of Seven nation to raise interest rates since the global financial crisis, but said any further hikes would depend on global economic conditions.

The Bank of Canada increased its key interest rate by a quarter point to 0.5 percent from a record-low rate of 0.25 percent.

The bank said thus far the impact of Europe's sovereign debt crisis in Canada has largely been limited to a modest fall in commodity prices.

It said the decision to raise rates still leaves considerable monetary stimulus in place.

Economists widely expected the central bank to raise rates after the country's economy grew 6.1 percent in the first three months of this year, emerging from the global downturn faster than the U.S.

Canada's dollar fell to 95.19 U.S. cents after the announcement. The central bank said economic conditions around the world are uneven and there's the possibility of renewed weakness in Europe.

DENVER

Alcoa reaches tentative deal with union, averting strike

Aluminum manufacturing giant Alcoa Inc. reached a tentative agreement on a new contract with its largest union Tuesday, avoiding a possible strike that would have affected thousands of workers.

Details of the four-year agreement between Alcoa and the Steelworkers Union were not immediately available. It still must be ratified by union members in 10 states.

"We have spent the last two weeks working through some tough issues, and feel that this tentative agreement creates a future for good-paying jobs at these plants," Mick Wallis, president of Alcoa North American Rolled Products, said in a statement.

In an e-mailed statement, the union declined to discuss details until representatives meet with union members.

The contract was extended about half a day beyond its expiration at midnight Monday, as both sides continued to discuss terms.

NEW YORK

Hewlett-Packard will lay off 9,000 employees to trim costs

Hewlett-Packard Co., the world's largest information technology company, plans to lay off about 9,000 employees as it tries to cut costs in its back-office computing centers and deepens its use of software, rather than people, to do some of the work that those hubs require.

The changes to these data centers, which are clusters of computers that run websites and process information for HP's corporate customers, will be made over about three years, the company said Tuesday. The layoffs amount to about 3 percent of HP's global work force, which had 304,000 employees as of October, the most recent figure available.

HP said it will take $1 billion in accounting charges, part of which will be used for severance to the laid-off workers. But it also said it plans to replace two-thirds of the jobs elsewhere in the company, by hiring 6,000 people to boost its global sales and delivery staff.

Like most companies that offer such services, HP has data centers around the world. The company has more than 100 centers that it operates for its customers and plans to cut that number roughly in half, but it did not specify the locations.

LONDON

American International Group rejects Prudential's lower offer

Bailed-out U.S. insurer AIG said Tuesday it won't accept a lower offer for its Asian insurance business from Prudential, which proposed a $5 billion cut to calm rebellious shareholders who thought the price was too high.

London Stock Exchange-listed Prudential PLC initially agreed to pay $35.5 billion for AIA, the Asian insurance business of American International Group Inc. Faced with the growing possibility that it could not win 75 percent backing from shareholders, Prudential lowered the offer to $30.375 billion.

AIG, majority owned by the U.S. government, planned to use the proceeds from the sale to repay U.S. taxpayers for some of the $180 billion it got in bailout money during the financial crisis.

Barrie Cornes, analyst at Panmure Gordon in London, said he believed AIG had killed the deal.

If the AIA deal falls through, Prudential will owe AIG a termination fee of $230.6 million.