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Detroit Free Press from Detroit, Michigan • Page 46

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Detroit, Michigan
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46
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2E DETROIT FREE PRESS BUSINESS FRIDAY. JULY 2 1999 Some loans to cost more Stronger WWJ-TV adds digital signal JO Mile Oakland i Macomb! ui M'u" Detail 3 9Milej JJ Comerica Bank, Citizens Bank, Michigan National Bank, Bank One and National City Bank raised their prime rates Thursday from 7.75 percent to 8 percent. Old Kent Financial Corp- left its prime rate at 7.75 percent Thursday. With lending products sugh as home equity and auto loans tied to prime rates, the increase usually translates to higher interest rates and payments for borrowers. A quarter of a percentage point increase means borrowers will pay $2.50 more for every $1,000 borrowed.

"When the federal funds rate goes up, the cost of all short-term loans to banks go up, and banks will try to pass the cost along to borrowers," said Sam Kahan, economist at the Federal Reserve Bank of Chicago's Detroit branch. Potential mortgage borrowers should be pleased that loan rates at several banks in Michigan'" were unchanged or lower Thurs-; day than on Wednesday. First" Federal of Michigan dropped its 30-year, zero-point rate to i 7.75 percent Wednesday, from 7.9 percent last week. Bank Onef dropped its 30-year, zero-poiny rate to 7.85 percent from 8 cent Wednesday. But Freddie Mac's Primary Mortgage Market Survey 'i showed that 30-year, fixed-rate loans with one point averaged? 7.71 percent for the week ending today, up from 7.63 percent previous week.

LORENE YUE can be reached at "fa forced CBS to buy WGPR-TV. CBS converted it to WWJ-TV to air CBS programming. WWJ-TV also commenced digital broadcasting Thursday from a new tower that in the future also will house public television WTVS-TV's (Channel 56) digital transmitter, plus the signals of some of CBS's FM radio stations. The switch to digital telecasting will cause some changes in WWJ-TV's "Big 62" image campaign, vice-president and general manager Kevin Cuddihy said Thursday. "I'll be looking at toning that down," Cuddihy said, because, in the digital broadcast world, WWJ will be telecasting over the air on Channel 44.

The slogan "Big-time TV," Cuddihy MEDIA By JOHN SMYNTEK FREE PRESS STAFF RITER Cable-less TV viewers in outlying parts of the Metro Detroit TV market could enjoy a much better view of CBS owned-and-operated WWJ-TV (Channel 62) for the first time Thursday. The station powered up its new $10million-plus transmitter at Eight Mile and Meyers in Oak Park. The 5-megawatt analog signal replaces the signal left over from the days before 1994, when an affiliation switch at WJBK-TV (Channel 2) to Fox BUSINESS BRIEFING MEMO PHONE I Small firms have some big plans LENDING ByLORENEYUE free press business writer Consumers who procrastinated about applying for home and car loans could find themselves paying slightly higher interest rates. Commercial banks raised prime rates Thursday in lockstep with the Federal Reserve Board's highly anticipated interest rate increase Wednesday. The Fed raised the short-term federal funds rate by a quarter of a percentage point to 5 percent to prevent the economy from overheating.

The short-term federal funds rate is the rate banks charge each other on overnight loans. CMS energy corr says it has discovered a major new oil field in the Colon Block of western Venezuela's Maracaibo basin. The block covers approximately 790,000 acres. An exploratory well was drilled to a depth of 10,180 feet and oil was discovered at intervals from 8,764 feet to 8,916 feet in the Mirador formation. That is the same formation currently productive in the Campo Rosario field in the block.

DETROIT edison said that af-ter working on its computer sys-: terns for three years, it has sent a letter to the North American Electric Reliability Council and the Nuclear Regulatory Commission that says it is ready for the year "Recognizing, howeverthat no company can make absolute guarantees about something as' complex as Y2K, Detroit Edison is developing contingency plans to address potential problems," said Robert Buckler, president of DTE Energy Distribution, said in the letter to the reliability coun-cil. As many as 700 people have worked on Detroit Edison's Y2K program to ensure that the util- ity will be able t6 provide power once computers roll over to year MICHIGAN From Page IE This evolution within the telecommunications industry is driving a string of high-profile mergers including Qwest's recent unsolicited bid for Frontier. Companies such as Qwest are hoping the next generation of high-speed Internet technologies will link more homes and businesses and provide new opportunities to sell goods and provide information and entertainment. Frontier, based in Rochester, N.Y., initially spurned Qwest's bid early last week, favoring instead an previous offer from Global Crossing an undersea cable operator. But Qwest, the country's fourth-biggest long-distance Company, sweetened its offer June 23 to $68 a share in cash and stock, valued at nearly $12 billion.

Earlier this week, Qwest CEO Joseph Nacchio sent a letter to Frontier shareholders indicating his company's commitment to buying Frontier and West, the Den: ver-based Baby Bell. On Wednesday, Frontier officials opened the door to negotiations when they agreed to meet with Qwest executives. Qwest wants to buy the two companies so that it can provide their 27 million customers with high-speed audio, video and data communications via the Internet. Frontier and West both have lines that run directly into homes and businesses, giving Qwest a direct link to customers. Frontier operates local phone lines in the Rochester, N.Y., area and West operates lines in 14 Western and Midwestern states.

But even without any major acquisitions, Qwest and the other upstarts will have enough bandwidth space over their fiber-optic lines to compete toe-to-toe with the established companies. In March, Nacchio told Fortune magazine that Qwest's network once it is MKING NEWS Oak Park Northend 8 Mile Detroit Detroit Free Press said, likely would be emphasized. Buyers of the latest and most-expensive TV technology could get WWJ in that mode Thursday. JOHN SMYNTEK can be reached at 313-222-5169 and Smintydfpaol.com. completed this year will have greater capacity to carry information than MCI and Sprint combined.

Frontier's network is expected to have twice the capacity of Qwest. Improvements in fiber-optic technology and software have expanded the amount of information that can be carried over one line. For instance, one fiber in 1985 could carry 8,000 simultaneous calls; now a single fiber can handle up to 1.5 million calls. "These companies are moving away from the day when they were building a network to provide one specific kind of voice service to building a huge, robust network to be used for just about anything," said Joe Laszlo, bandwidth strategy analyst for Jupiter Communications LLC in New York. But figuring just how much information phone companies will be capable of sending and receiving remains largely unknown because the companies don't want to tip off competi-, tors: Fortune estimated that total capacity over fiber lines in the country would grow more than 360 percent from 1999 to 2001, when all networks combined would be capable of handling 1.5 trillion calls simultaneously.

Katherine Willis, president of cyberstate.org in Ann Arbor, said the companies are laying sufficient fiber to serve Michigan residents and businesses. However, Willis said the state must be sure that its laws allow all companies to play by the same rules to ensure Michigan doesn't lose high-tech businesses to other states. "If youdon't have a favorable telecommunications environment here, there's nothing to say that it can't happen in Ohio, Illinois or California," Willis said. BRENDA RIOS can be reached through e-mail at riosfreepress.com or at 313-222-8760. windows are done and sitting there in the factory," said Ikle.

"He called us to ask if we had any power to go in the building and get them. It's a shame." For builders who use the Weathervane brand and for their customers who are waiting to move into houses, this aggravates construction delays already caused by a shortage of skilled workers and some key materials, such as drywall. In a letter Wednesday, Weathervane owner Gary Rose blamed the closing on slow pay by customers, energy code requirements, building permit delays, information system problems and financing problems. Weathervane makes an all-wood window, sometimes clad in aluminum or vinyl. "As far as I know, we were the largest wood window manufacturer in this area," said Lucas.

ll 8, Iom ill 'ft. II I Ik. AIRLINES U.S., Canada report most Y2K fixes done U.S. and Canadian airlines reported Thursday that they are 95 percent finished with their Y2K computer repairs. They're on target to complete the rest by the end of summer.

"We will be ready," said Carol Hallett, president and chief executive of the Air Transport Association, an industry trade group, at a Washington, D.C., news conference. Airlines have spent $750 million to fix the problem. 1 The Y2K problem is a glitch that may cause computers to malfunction Jan. 1. Some software was written to recognize years in a two-digit format, such as "99" for 1999.

There is uncertainty about what will happen when the year changes to 2000, because some computers may misconstrue the "00" for 1900 instead of 2000. Still to come this month is an assessment by international aviation officials of the Y2K readiness of foreign airlines. ECONOMY Construction dips again Construction spending fell in May for a second straight month, the first time that's happened in two years, indicating one of the economy's strongest sectors is starting to slow. The Commerce Department said Thursday that spending dropped by 0.9 percent in May, after falling by 2 percent in April. The declines were fairly widespread, with decreases reported in single-family homes, apartment buildings, hotels and motels, and big government construction projects.

'The decrease was not expected. Many analysts had expected construction spending to rise by 1 percent in May. RAILROADS Amtrak to settle bias suit 'Amtrak announced Thursday that it had agreed to settle a race discrimination lawsuit filed by black management employees and applicants for management positions. The settlement, which requires federal court approval, would create an $8-million fund to provide economic relief for the employees who sued. The national railroad also agreed to changes in its human resources and equal opportunity procedures.

Under terms of the settlement, Amtrak did not admit to any wrongdoing, but agreed to make extensive changes in corporate practices designed to prevent race discrimination. ''Amtrak is committed to treating aH'efnployees fairly," Amtrak President George Warrington said in'a' statement. "Valuing diversity is the right thing to do, and it makes good business sense for us, our employees and our customers." AUTOS Ford may lose Brazil perks "Brazilian President Fernando Henrique Cardoso may block a series of incentives offered to Ford Motor Co. by the state of Bahia, a Brazilian newspaper reported. The federal government plans to review a law that allows companies investing in the northeastern region of the country to have import and exports tariff exemptions.

The tax exemptions to expire by the end of the year were extended by the state of Bahia to attract a Ford car plant to the state. "Ford, the world's No. 2 automaker, is aiming to manufacture a new small car in i Bahia which it hopes will turn around a 45-percent decline in sales during the last 20 months in Brazil, a reflection of the recession in Latin America's largest economy. completed. MEEMIC policyholders subscribed for 1,533,983 shares of common stock in MEEMIC Holdings according to a plan that makes the original company a wholly owned subsidiary of MEEMIC Holdings.

Also according to the plan, Professionals Group converted the $21.5 million surplus note (plus accrued interest) of MEE MIC that it owned into 2,302,209 shares of MEEMIC Holdings. Professionals Group fulfilled its -obligations as standby purchaser by buying 2,763,308 shares in the subscription offering. As a result, Professionals Group owns approximately 77 percent of the issued and outstanding shares of' MEEMIC Holdings. VISTEON AUTOMOTIVE SYSTEMS, the Dearborn auto-parts unit of Ford Motor has completed its acquisition of Plastic Omnium's automotive interiors division. When the deal was announced in May, Visteon estimated the net cost would be $475 million, including cash and debt assumed.

Plastic Omnium now puts the cost at $491 million. Visteon said the move will boost its ability to offer full interior packages, or cockpits, to automakers worldwide. Open Arms, a Detroit-based grieving children's program, as program manager. She previously worked as a project leader with" Downriver Guidance Clinic in Southgate. She also was executive 11 director of the Safe Center a nonprofit family services agen- cy.

Bank West Financial has appointed Ronald Van Hou-ten as president and chief tive officer. He had been interim. chief executive officer of the;" Grand-Rapids based bank. George Huxley has joined Precision Color, a Plymouth-' based graphic-design and imaging company, as vice president of-' sales and marketing. He had been-western regional business er for sales and distribution for" 3M.

HNTB a architectural and engineering" consulting firm, appointed John' Friel engineer-in-charge of the firm's Detroit office and group director of construction engineer-' ing-inspection for the Michigan" offices. He had been a vice presi- dent at Earth Tech. vision, was also on a roll in June." Audi dealers sold 5,742 automo-" biles in June, a 43.8-percent in- crease over the same month last'- year. Year-to-date sales are up 38.4 percent to 28,252. It was Audi's best June since 1987 and best year-to-date since' 1986 before accusations about" Audis' sudden acceleration' caused consumers to worry safety.

The numbers provided more evidence that Volkswagen" AG, which includes VW and Audi; brands, is enjoying an impressive turnaround. Honda and Acura dealers set monthly and half-year records. Total June sales of 90,320 were up 1.6' percent from the previous record set last year. Total vehicle sales fo Honda cars and trucks are up 6.1; percent year-to-date to 463,810. RACHEL KONRAD can be reached via e-mail at konradfreepress.com or at 313-222-5394.

2000. The cost is expected to exceed $80 million. Detroit Edison said it has tested and repaired or replaced about 140,000 critical software programs and susceptible devices involved in generating and distributing power. TELEIXEX AUTOMOTIVE, a Troy auto supplier, purchased a factory on 11 acres in Kendallville, to produce powered adjustable brake pedals. Teleflex's production of the pedals should exceed 250,000 in 1999, up from 30,000 in 1998.

The purchase price was not announced. oxroRD automotive, a Troy auto supplier, purchased GmbH, a maker of complex stampings and assem- blies in Nagold, Germany, for an undisclosed price. Wackenhut has annual sales of approximately $61 million and employs approximately 500 people in three plants. PROFESSIONALS CROUP INC. and Michigan Educational Employees Mutual Insurance Co.

say the conversion of MEE-MIC to a stock insurance company and the offering of shares in MEEMIC Holdings has been Brian Brady Jennifer Fernandez Samira Lazreq John O'Toole sources Inc. Scott Thomsen was appointed director of science and technology for Guardian Industries a manufacturer of glass products. Karen Gray-Sheffield joined that leasing is so popular. Customers are forced to purchase a new vehicle every two or three years, and that turnover is helping drive the industry." Toyota Motor which includes Toyota and Lexus dealers in the United States, reported record June sales of 122,747 vehicles an increase of 4.9 percent over last June. Toyota also announced record half-year sales of 707,747 an increase of 11.4 percent compared with the same period last year.

Toyota's all-new full-size pickup truck, the Tundra, had the best sales debut of any Toyota or Lexus product. Volkswagen dealers sold 150,495 new cars in the first six months of the year an increase of 44.6 percent over the same period In 1998. June sales totaled 30,640 and surpassed any June total since 1973, when VW was the nation's leading importer. Audi, Volkswagen's luxury di tit The Bank of Rochester ap-' pointed Brian Brady vice president: He was assistant vice president at First Chicago NBD Corp. Peter Williams Bizer an Ann Arbor-based marketing communications company, hired Jennifer Fernandez as account services coordinator.

Fernandez comes from East Pointe Advertising Jacksonville, Fla. Marx Layne a Farming-ton Hills-based marketing and public relations agency, named Samira Lazreq an account assistant. Lazreq was editor in chief for the JM Foundation. John O'Toole was named director of operations for Centex AIM, a Livonia construction company. Centex AIM is a joint venture between Nashville-based Centex Rogers and AIM Services.

He had been a senior project manager for the company. Riverview Systems a Grand Rapids-based systems developer for campus bookstores, hired Ronald Windemuller as chief executive officer. Windemuller was managing principal and president of Cygnet Re- WINDOW I Closing halts customers' work DC I June sales fall; industry still strong From Page IE windows. "We have thousands of home owners in a whirlwind to figure out what's going on," Lucas said. "People have job sites with walls up as we speak, with carpenters working, and they're waiting for the windows they've ordered." Lucas appealed for patience from Weathervane customers, while the sales staff tries to figure a solution.

As 1999's near-record house-building season was hitting its summer stride, Weathervane locked its doors Monday without previous notice. A telephone service called all 250 employees to tell them they were laid off. In Green Oak Township, township treasurer Matt Ikle said he is, swamped with calls from Weathervane customers. One call came from a man whose new house was waiting for $50,000 worth of windows. "He knows for a fact the From Page IE Industry sales, which had been running at a record annual rate of more than 16 million cars and trucks through May, are expected to continue at the torrid pace.

Foreign automakers who reported monthly sales on Thursday had even stronger half-year sales and more optimism for the rest of the year. General Motors Corp. and Ford Motor Co. will report sales today. Fueling the boom is an array of hot-selling new products, such as the Toyota Tundra pickup truck, Audi TT coupe and Honda Odyssey minivan.

American sport-utility vehicles, especially Jeeps and Dodges, also spurred sales. "A strong product lineup and a strong economy are major parts of boom," said Jason Knapp of Autodata Corp. "A lot of it may have something to do with the fact.

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