The news at a glance

GM: Bracing for ‘surgical’ bankruptcy

The Treasury Depart­ment has directed General Motors executives to be ready to file for bankruptcy by June 1, said Micheline Maynard and Michael de la Merced in The New York Times. “The goal is to prepare for a fast, ‘surgical’ bankruptcy” so that GM’s “image and sales are not damaged permanently.” The Treasury envisions splitting GM into a “good” company, which would own GM’s most desirable brands and manufacturing facilities, and a “bad” company, which would hold “unwanted brands, factories, and health-care obligations” until they were liquidated.

Bondholders, “worried about getting steamrolled,” are digging in for a fight, said John Stoll in The Wall Street Journal. Like other creditors in a bankruptcy filing, holders of GM bonds would exchange their debt for shares in the good GM. But the swap would stick them with “hefty losses.” Bondholders’ chances of prevailing are slim, given “the enthusiasm in the administration” for a surgical bankruptcy, but creditors hope that at least “a legal challenge could discourage similar fast-track efforts down the line.”

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Health care: Express Scripts’ growth prescription

Express Scripts, the third largest U.S. pharmacy benefits manager, has agreed to buy the pharmacy benefits business of Wellpoint for $4.7 billion, said Jason Gale and Lisa Rapaport in Bloomberg.com. With the acquisition, Express Scripts would handle more than 750 million prescriptions for private employers, unions, and governments. Pharmacy benefits managers “encourage the use of cheaper generic drugs and deliver medications by mail to help employers hold down” prescription drug costs. The Wellpoint deal gives Express Scripts “more clout with drugmakers” when negotiating prices.

Stocks: Signs of life in the IPO market

Two young companies “with different spins on the education market” made their stock market debuts this week, said Lynn Cowan in The Wall Street Journal. Rosetta Stone, a maker of self-study language software, raised about $106 million with an initial public offering of shares; Bridgepoint Education, an “online college,” raised about $216 million. Bridgepoint holds down costs by conducting classes in virtual classrooms, taught primarily by part-time adjuncts. The offerings mark “the busiest period for new stocks since August.”

Home builders: Huddling together for shelter

Pulte Homes has purchased Centex for $1.3 billion, creating “the largest U.S. home builder as the beleaguered industry tries to ride out the housing slump,” said John Spence in Marketwatch.com. By combining with Centex, Pulte says it “can return to profitability faster when the market finally turns.” Centex is a major player in “entry-level” homes, while Pulte is strong in the “move-up” market. Analysts say “the main benefits of the deal will be cost savings and the acceleration of debt repayment.”

Aerospace: Boeing to cut 777 production

Facing what it calls “significant deterioration in the business environment,” Boeing will cut back production of its wide-body 777 airliner, said James Miller in the Chicago Tribune. The economic slump has triggered “a collapse in new aircraft orders” from 99 last year to six this year. But Boeing emphasized that customers have not canceled orders for the 777. Instead, they have asked Boeing to delay deliveries as they wait for an economic recovery.