MERGERS Huge aerospace deal abandoned

European Aeronautic, Defence & Space Co. and BAE Systems Plc abandoned their planned merger on government resistance, leaving in tatters their aspiration to create the world's largest aerospace and defense company.

The two companies said they terminated the deal because the "interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives" of the merger. The deal crumbled just hours before a deadline expired to formalize the agreement or win more time.

Germany became a major stumbling block on the path to an accord. BAE Chairman Dick Olver said he would not revisit merger talks with EADS unless government positions changed significantly, and that the company will not look elsewhere for a new partner.

The breakdown blocks BAE's path to a civil aviation business in times of shrinking defense budgets, and marks the second failure in a decade for EADS to combine aerospace assets from Europe's three largest economies.

Toyota Motor Corp. began recalling about 7.43 million vehicles worldwide after the company detected a possible flaw that could lead the power-window switch to melt or catch fire.

The recall affects about 2.47 million vehicles in the United States and almost 5 million more vehicles globally, said spokesman Joichi Tachikawa.

The Corolla and Camry are among the 14 models - some produced as far back as 2007 - subject to inspection and repair, he said, adding that the company hasn't received any reports of accidents because of the issue.

The scale of the recall, equivalent to 93 percent of its vehicles sold last year, comes as President Akio Toyoda pushes to rebuild the company's reputation for quality. Toyota, which recalled more than 10 million units in 2009 and 2010 for defects associated with unintended acceleration, took two years for its Lexus brand to regain the top spot on J.D. Power & Associates' new-car quality survey in 2011.

FedEx Corp.'s plan to increase profit $1.7 billion in three years relies on streamlining its Express unit, where it plans to cut jobs and replace fuel- guzzling planes, for more than 90 percent of the gains.

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Huge European aerospace merger abandoned