Detroit Free Press from Detroit, Michigan • Page 10

Sclvoil 4frce Stress 10A f' NYSE, Page 11 Amex, Page 12 Mutual funds, Page 13 Call Business: 222-8765 insiDE: stocks Pages 11-14A. Saturday, April 28, 1990 Mazda Interest rates may slow growth this year PTcrkersinay wu get approval to leave and be paid at CO percent cf their normal wages. voluntary layoff; the company says it is not. Regardless of what it is, 200 to 300 workers left early, according to several workers. Masahiro Uchida, president of Mazda's Flat Rock operations, has been in Hiroshima this week meeting with Mazda executives.

One alternative for avoiding further cutbacks would be to increase production of Mazda's 626 sedan which is selling ahead of last year's pace. There has been no indication, however, that Mazda will do that. halted the assembly line at 1:30 p.m. Friday about 90 minutes before the first shift was to end. A Mazda spokeswoman said production will run 4.7 hours each shift through May.

Workers are expected to stay for training, but those who want to leave may obtain a supervisor's approval and be paid at 60 percent of their normal wages. Union officials, however, contend that workers be paid 80 percent if they are idled by a production cutback. Some workers see this as a Earlier this month, Ford Motor Co. canceled orders for 6,000 Probes in May. Employees who asked not to be quoted said the number of canceled orders has risen to 7,300.

Consequently, Mazda managers, who said workers would be laid off only as a last resort, must decide how to keep all 3,100 hourly workers occupied. In negotiations with UAW Local 3000 leaders, Mazda tentatively agreed to produce cars five hours of every shift and devote the BY GREG GARDNER Free Press Automotive Writer More than 200 workers at Mazda Motor Manufacturing Flat Rock plant were allowed to go home Friday afternoon after production was halted, raising further questions about the company's ability to fulfill a no-layoff pledge. Mazda has cut production at least twice this year due to slow sales, particularly of the Ford Probe, which accounted for more than half the plant's output since it opened in 1987. The nation's economy grew at a healthy 2.1 percent rate in the first quarter, the government reported, but analysts said an "ugly" inflation rate could mean higher interest rates that would slow growth later this year. "We have set ourselves up for a halfway decent first half of 1990," said Donald Straszheim, chief economist Market details PagellA remaining three hours to training.

But in a decision that took union officials by surprise, the company State Lab to Test Octane for Merrill Lynch Capital Markets in New York. "But, by the end of the year, the economy will be slowing." In addition to the strength in the gross national product the nation's total output of goods and services the Commerce Department reported that inflation jumped 6.5 percent, its steepest jump since a 7.7 percent increase in the fourth quarter of 1981. Japan won't be on unfair trade list Program to cut gasoline cheating STOCKS DIVE AGAIN: The stock market closed out its BY CHERYL JACKSON Free Press Business Writer second straight week ot losses with a Droaa decline, registering little enthusiasm over the latest statistics on economic growth. The Dow Jones industrial average fell 31.53 to 2,645.05, extending its loss for the week to 50.90 points. Trump Says Dash is King': Donald Trump, whose acquisitions have become legendary, said he has discussed selling or refinancing virtually every major asset he owns.

The casino and real estate mogul has hired Merrill Lynch Co. to negotiate a possible sale of the Trump Shuttle less than a year after stablishment of a state gasoline testing laboratory should decrease the amount of octane cheating, a government official buying it. He denied that his empire faces any cash shortage problems, saying he has casn reserves oi $380 million, but he thinks "cash is going to be king." But Forbes magazine, in its May 14 issue, says Trump's net worth is only $500 million, not the $1.5 billion he has claimed. ORGANIC LABELING: The Senate Agriculture Committee voted to set a national standard for organically grown food. The regulations requiring farmpra tn fnllnw snwifir methods in order to label their products "organically produced" will be part of the 1990 tarm bill that tne iuii senate wui vote on later this year.

GM SEEKS PAY FROM CAW: General Motors of Canada says it will sue the Canadian Auto Workers union following a two-day walkout at three assembly plants in Oshawa. GM wants damages of $500,000 from the union for every hour of lost production, spokesman Barry Kuntz said. Kuntz declined to say how much money in total the company feels it is owed. GM contends that under Ontario labor law, a -company can seek compensation from a union for an illegal strike. BY ROBERT A.

RANKIN Free Press Washington Staff WASHINGTON The Bush administration announced Friday that it will not cite Japan as an unfair trader this year, despite pressure from U.S. business groups and members of Congress. U.S. Trade Representative Carla Hills said Japan has been so cooperative in recent trade negotiations that "we think it would be counterproductive" to brand Japan as unfair for a second year in a row. The Bush administration is worried that slamming Japan for unfair trade practices now when Japan's economy is in a tailspin, its political leaders are weak and divided, and public opinion in both countries is inflamed over trade frictions could ignite a crisis across the full range of U.S.-Japa-nese relations, threatening American economic and global security interests.

Yet critics charge that Japan was cooperative in recent trade talks only because America officially targeted Japan last year as an unfair trader and threatened to take action. As deadlines on those U.S. threats approached, Japan has pledged to open its heretofore closed markets to a variety of U.S. goods and even to make broad structural reforms throughout its economy, all in an effort to reduce America's chronic $50 billion annual trade imbalance. General Motors Corp.

and Chrysler declined to comment, but Ford Motor Co. spokeswoman Susan Shackson said: "We're surprised that Japan was not cited in light of the lack of progress on the U.S.-Japan trade deficit." Democratic members of Michigan's congressional delegation, including Sens. Donald Riegle Jr. and Carl Levin, blasted the Bush administration. Rep.

Sander Levin of Southfield denounced it as "a shrug of the shoulders instead of a call to action" in the fight for balanced trade. Free Press staff writers Janet Braunstein and Patricia Edmonds contributed. says. Such a facility, approved last year, will begin construction next year. Victor Rezendes, director of energy issues at the U.S.

General Accounting Office, said dramatic changes can result when states begin testing gasoline and octane levels. In Arkansas, an estimated 24 percent of the service stations surveyed had mislabeled gasoline. But by 1979, four years after the state implemented testing, that percentage dropped to 2 percent. In Maryland, the percentage of service stations with mislabeled octane levels went from 10 percent in 1975 to 1 percent in 1980, after testing was implemented. "There's a deterrent factor here.

If you know you're going to be tested and that the state's going to take enforcement action, people tend to comply," Rezendes said. Michigan is not among the 22 states with gasoline testing laboratories, but Roger Robinson, senior foods specialist at the state Department of Agriculture's food division, said the state will begin constructing one within a year. He did not know when it would be Robinson said the Motor Fuel Quality Testing Laboratory in East Lansing will cost more than $1 million. The Legislature approved funds for it last year. The Agriculture Department does limited gas testing, checking for such things as alcohol and lead levels.

But the new laboratory will expand that to include octane ratings. A two-year GAO study released Thursday found that 51.9 percent of the service stations surveyed in Detroit and its suburbs labeled their gasoline as having an average of 2.3 octane points more than it actually con- Ill MICHIGAN RICHARD LEEDetroit Free Press Victor Amador, 26, a gas transport driver from Armada, makes a delivery in Madison Heights. ed." But Melvin Dix of Highland Park said that despite the study, he'll continue to use Amoco's Ultimate Premium Unleaded, a high-octane gasoline that costs up to 20 cents more than regular unleaded. "I've always used Ultimate Premium. My car responds to it.

My car runs perfectly with it," Dix said. Michigan Citizens Lobby Communication Director Virgil Bernero said the study shows the ideology "let the buyer beware" isn't good enough for consumers. "If the state has to build a facility to get the octane rating, how's the average consumer to know the difference?" Bernero asked. "It's pretty disgusting news. The next time I fill up my tank, it'll be with regular unlead tained.

The GAO estimated that more than 9 percent of gasoline nationwide is mislabeled by more than one-half of a point, costing motorists at least $150 million annually. Octane is a rating applied to gasoline that indicates the resistance to engine knock: The higher the rating, the greater the resistance to engine knock. ICSD ASSUMES National Bank of Detroit has assumed the deposits and acquired certain assets of New Guaranty Federal Savings Loan Association of Taylor from the Resolution Trust Corp. New Guaranty has deposits of $167 million and eight offices; all will become NBD offices, effective today. SULFITES IN SAUSAGE, NOT STORES: Four Detroit-area grocery stores are no longer using the illegal preservative sulfite on their meats, but two food companies are voluntarily recalling 3,500 pounds of sausage that may contain the preservative, according to the Michigan Department of Agriculture.

New and current meat inventories have been checked and cleared at Billy Joe's Fruit Market and Moscheck's Downriver Meats, both in Allen Park, Saveland Super Market in Taylor and Joe's Quality Beef in Riverview. Sausage under the names Wisbisky's Polish Sausage, Vetro's Italian Sausage and Dave's Pork Links by Dave's Sausage Factory in Detroit and Polish Brand Sausage by Mancini Sausage in Harper Woods should be returned. Chrysler Sells Bonds: Chrysler Corp. sold $1.1 billion in 30-year industrial bonds to help pay for the completion of its new Technology Center in Auburn Hills. The bonds, which will mature May 1, 2020, also could be used to finance the automaker's $15-billion new products program, or for other purposes, company officials said.

COGENERATED ELECTRICITY TO CANADA: Midland Cogeneration Venture has found its first customer outside Michigan, reaching a deal to sell 200 megawatts of power to Canada's largest electric utility, Ontario Hydro. CMS Energy owns 49 percent of the cogeneration venture, which started operating a month ago. Brewery May Stay Open: g. iieiieman Brewing Co. said it may keep its Frankenmuth brewery open.if it wins undisclosed concessions from employees and local government, thought it previously said it was too small to operate economically.

PERRY STOCK UP: Perry Drug's stock was among the biggest percent gainers on the New York Stock Exchange, increasing 6.7 percent that's 50 cents, to $7,875. Berl Falbaum, a spokesman for the Pontiac-based chain, said he thinks the increase reflects a variety of positive moves Perry has made in recent months. EARNINGS: Ames owes Handleman 40 state Revco stores sold 7 BY JOANN MULLER Free Press Business Writer Troy-based Handleman which already dished out one helping of bad news this week, now finds itself ensnared in bankruptcy proceedings of the nation's 4th-largest discounter. Handleman, a music and videotape distributor, is owed $12.5 million more than a third of its 1989 profits by Ames Department Stores Inc. Late Wednesday, Ames filed for protection from creditors under Chapter 11 of the federal bankruptcy code.

Ames has 13 stores in Michigan. Handleman is the discounter's second-largest creditor, behind Societe Generate Financial which is owed just over $14 million. Other major creditors include Thermos Rubbermaid J.P. Stevens and Fisher Price. "Obviously, that is a big chunk of business for Handle-man, said Kevin ana lyst with the Ohio Co.

in Columbus. Handleman's biggest customers, however, mart Corp. and Wal-Mart Stores made up about 80 percent of Handle-man's 1989 sales of $647 million, according to estimates. News of Handleman's entanglement in the Ames case came on the heels of the company's surprise announcement Monday that fourth-quarter profits would fall short of last year's results. That disclosure drove Handle-man's stock down to Shares closed Friday at $12.75, down 50 cents.

A Handleman spokeswoman said the company would have no comment on the Ames bankruptcy case. Moore said Handleman is bound to recoup some of the money through bankruptcy proceedings, "but if worse came to worst, they would just get the inventory bacK." executive, acquired 112 Peoples Drug Stores from Imasco Ltd. of Montreal. Grass, the son of Rite Aid Chairman and CEO Alex Grass, left that company shortly after his brother, Martin, was named president and chief operating officer. Industry experts believe Roger Grass, now with 333 stores, is determined to build a chain that will rival Rite Aid, the nation's largest drugstore chain with more than 2,000 outlets, including 88 in Michigan.

The 221 stores are among 712 that Revco, which is in Chapter 11 bankruptcy proceedings, is trying to sell. Michigan's two largest drugstore operators, Perry Drug Stores Inc. and Arbor Drugs had been expected to bid on at least some of the 40 Revco stores for sale, but neither would comment Friday. 7 BY JOANN MULLER Free Press Business Writer Forty Michigan drugstores are among 221 Midwestern stores that Revco D.S. Inc.

agreed Friday to sell to a private investment company headed by a former executive of Rite Aid Corp. The acquisition by Roger Grass and his investment partners, Acadia Partners L.P., catapults the 8-monthold Reliable Drug Stores Inc. of Indianapolis to the 13th spot on the list of the nation's largest drugstore chains. Terms of the deal were not disclosed. Other than changing the name of the stores to Reliable, "there should be few changes for customers at the stores we're acquiring," said Grass, Reliable's president and CEO.

"Revco and Reliable have shared similar strategies in pricing and customer service." Reliable was formed in August when Acadia, Grass and Charles Conaway.janother former Rite Aid SPERUCII NAMED Harold Sperlich, who left Chrysler Motors Corp. as president in 1988, was named Friday chairman and CEO of PHM the Bloomfield Hills-based home builder. Sperlich, 60, who headed his own consulting firm and is a member of PHM's board, replaces James Grosfeld, who is retiring 1 I CllCI HWls.f UTUIIMt VU Mw-v. rfW. w.

$2,951,000 (20 cents) vs. $1,338,000 (nine centsj. Sales, $224,681,000 vs. 5231,183,000. Kysor Industrial Cadillac, quarter ended March 31.

Net income, $1,653,000 (22 cents) vs. $634,000 (eight cents). Revenues, $59,3.