Detroit Free Press from Detroit, Michigan • Page 57

BUSINESS WEDNESDAY. SEPTEMBER I'" GM offer riven to ease tern 2F DETROIT FREE PRESS 1011 "This is probably more symbolic than anything else. We already have what amounts to lifetime employment" Mwomciu on GM's offer of lifetime job guarantees for most of its 148,000 hourly workers. Lifetime jobs proposal doesn't thrill employees ByTEDEVANOFF free press automotive writer Meanwhile in Canada, Ford is expected to be the Canadian Auto Workers target for a strike or a pattern-setting agreement in," contract talks this month, 1 Sean McAlinden, a University of" Michigan labor analyst The CAW and UAW are I cooperating to pressure Ford, McAlinden said CAW President Buzz Hargrove I is scheduled to announce the tarCM get company at a news in Toronto today. super-efficient auto plants staffed by fewer workers.

GM and DaimlerChrysler AG made the lifetime job security offers last week in the 1999 labor talks. A three-year contract covering about 375,000 autoworkers expires Tuesday. Lifetime employment would ease union opposition to GM's plans to replace older auto plants with new factories about half the size of the current plants. Workers displaced from razed plants still could wind up receiving GM paychecks while working in new component factories set up to supply the super-efficient plants, said David Cole, executive and officials in local union halls were underwhelmed by the proposal for lifetime jobs. "This is probably more symbolic than anything else.

We already have what amounts to lifetime employment," said a UAW official at a Lansing assembly plant. Laid-off workers are guaranteed their wages will be paid for 37 weeks, and they are listed in a job bank and reassigned to other GM plants as openings occur. Moreover, the automakers in the 1996 labor talks agreed that their workforces in any one region can't fall more than 5 percent unless there is a serious downturn in the economy. in the Auburn Hills offices of DaimlerChrysler. He's expected to focus negotiations by Friday with GM or DaimlerChrysler and bargain last with Ford Motor Co.

The UAW and Ford are-at odds over the presumed spin-off of Ford's Visteon Automotive Systems parts maker. In GM plants, many workers TED EVANOFF can be reached at 313-222-8763. Area utilities testfor2K JO dot ornisnice i 7 TNN '23 director of the Office for the Study of Automotive Transportation at the University of Michigan. "What GM basically is saying is, 'We'll give you this, and you give us the opportunity to improve the productivity of our Cole said UAW President Stephen Yo-kich resumed bargaining Tuesday will leave the company once the merger is completed, though they will continue to serve on the board. The new Viacom would own the CBS network, which was the top-rated network last season, as well as the Paramount movie and TV studio, MTV, VH1, Nickelodeon, and the Simon Schuster publishing house.

Viacom would gain major advertising outlets with CBS that it can use to promote its movies, cable programming and TV shows. CBS, through its Infinity subsidiary, is one of the largest radio companies in the nation, and it has a huge array of outdoor advertising properties. For CBS, the deal would provide access to top TV studios for programming and international exposure through Viacom's overseas cable operations. Para-mount's TV studio produces eight shows that will air this fall, all but one of them already on CBS or UPN, in which Viacom owns a half-interest. The merger also would join two of the media world's scrappiest entrepreneurs and deal-makers, Redstone and Karmazin.

Redstone bought Viacom in Viacom CEO Sumner Redstone, left, and CBS CEO Mel Karmazin are all smiles during a New York news conference Tuesday in which they announced an agreement to merge. VIACOM I CBS deal to be biiaiest in media history ness Solutions Inc. in Farming- -ton Hills. CBSI has spent the last several years helping companies solve their Y2K problems. "My feeling is there has been so much awareness around 2000 this will be just a blip," she said.

"It's a good dry run for Year 2000. The changes are different, but the outcome could be similar." In April, when the 99th day of the 99th year came and went m2 9999 few major problems de- -veloped. Some older computer programs had recorded dates the day of the year and the final two digits of the year. The Y2K problem (Y for year, for thousand) stems from a date shorthand used by decades ago to save computer; memory space. The "19" was dropped from the year.

So some uncorrected programs might read 2000 1900, shutting down the computer or giving bad information. Detroit Edison plans to have 70 people in 25 locations participate ing in its test. Spokesman Scott Simon said the utility has pleted all its contingency planning and has told 2,000 of its employees they can't take vaca tions from Dec. 27 until Jan. 7, 2000, just in case.

Consumers Energy will have 300 people in 80 locations particR. pating in the tests, said man Charles Maclnnis. The tests -will involve Consumer Energy's coal-fired plants, nuclear plants --and major substations. Michigan Consolidated Gas will run three "what-if scenarios to test what could happen if electric power gets cut to its dispatch cen- ter, voice and data communications get cut to field employees or a pipeline partner, or the gas sup-, ply gets cut to a pumping station. MEMO General Motors Corp.

is trying hard to streamline its money-losing small-car operations. Analysts said GM's recent offer of lifetime jobs for most of its 148,000 hourly workers in the United States appears to be part of an effort to build a new wave of Hilton to grab Promus Hotels Bigger market share expected, but company might have overpaid ASSOCIATED PRESS LOS ANGELES Hilton Hotels Corp. is buying Promus Hotel Corp. for $3.1 billion in a cash-and-stock deal that expands Hilton's market reach to include nearly 1,700 establishments, ranging from New York's luxurious Waldorf-Astoria to the mid-priced Hampton Inn chain. The acquisition, announced Tuesday, also would give Hilton a large stake in the all-suites segment of the lodging market, geared toward business travelers who stay for extended periods.

Primus brands include the Embassy Suites Guest Suites, Home-wood Suites, Red Lion, Doubletree and Club Hotel by Doubletree chains. The companies have been talking about a combination since July, said Stephen Bollenbach, president ana cniei executive ot Hilton. The deal is expected to provide $55 million in cost savings the first year for the combined companies, and $90 million in following years. Promus had $1.1 billion in revenues in 1998, with Hilton taking in $1.8 billion for the same period Hilton will pay $38.50 per share for 55 percent of Promus shares. The rest of Promus' stock will be exchanged for Hilton common stock equivalent to $38.50 per share.

Hilton will also assume $900 million in debt. Promus shares rose $3.44 to $34.81 in trading on the New York Stock Exchange. Hilton shares dropped 63 cents to $11.19 on news that the acquisition would hurt Hilton's earnings in 2000. The deal puts Hilton in a better position to compete with rivals including Marriott International Inc. and Starwood Hotels and Resorts, analysts said.

But Hilton shareholders won't be seeing any benefits for a while. In my view, they overpaid," said Harry Curtis, an analyst with BancBoston Robert Stevens. "This is manna from heaven for Promus shareholders." BancBoston had estimated before the announcement that the price would be about $33 to $35 per share, while Bear Stearns analyst Jason Ader had valued the deal at $37 per share. "Strategically we think it makes sense for them. The problem is the hotel industry is in the doldrums right now, so it's going to take several years for (Hilton) shareholders to benefit," Ader said.

The merger will result in some layoffs to eliminate duplication, but' Bollenbach said the company has not determine how many jobs will be eliminated. There are no plans to close hotels because Promus and Hilton hotels appeal to different clientele. Both companies' boards of directors have approved the agreement, and completion of the merger is expected by the end of the year. Shareholders of both companies still would have to approve i nu rr-wriwm inn Hilton has about 275 owned, managed or franchised hotels in North America while Promus has more than 1,400 properties throughout the United States. Some say outcomes on 9999 might be similar to January ByMIKEBRENNAN free press business writer Some Michigan utilities will run tests tonight to help determine if they can deal with possible Y2K computer problems New Year's Day.

Detroit Edison and Consumers Energy will test their emergency communications systems to make sure people staffing electric power substations, command centers and generating plants can talk with each other. It's part of a test in the United States and Canada planned by the North American Electric Reliability Council to make sure electric power will flow without interruption early next year. The tests run from 6 p.m. to 3 a.m. Michigan Consolidated Gas Co.

will start testing its communications systems about 9:30 a.m. today and conclude Thursday night. Ameritech doesn't plan any tests, but will move to a-heightened state of alert Thursday. Computer programs usually use numbers to represent dates, so tomorrow will be 9999. A string of 9s was used by programmers decades ago to tell mainframe computers to stop processing data.

Experts also said data entry clerks might have used 9999 when a program required them to enter a date, but they didn't know the correct one. "9-9-99 could be a significant date or it could just be a blip," said Michelle Jones, senior director of outsourcing for Complete Busi MICHIGAN MEL FARR AUTOMOTIVE GROUP has obtained $36.5 million in backing from major financiers to open used-car superstores in Detroit and other large cities. Farr, who announced completion of the deal on Tuesday, said it involves a group of investors, including Ford Motor Credit, Bank One, Tiaa-Cref, Citibank, Goldman Sachs and Bank of America, the lead investor. He said the group purchased 4,500 auto leases and loans owed to Triple Farr's auto financing division, which finances car deals to people with marginal credit. Farr, who owns the largest black-owned business with $596.5 million in sales in 1998, said the deal wouldn't have happened without the Rev.

Jesse Jackson who promoted Farr's plan. northwest airlines announced a new daily nonstop service between its hub in Detroit and Honolulu, Hawaii, for the winter travel season, Dec. 17-April 1, 2000. The new service will complement Northwest's twice-daily, one-stop service from Detroit to Honolulu via San Francisco and Los Angeles. The announcement came a day after Northwest was forced to cancel 38 incoming and 38 departing flights after Monday thunderstorms flooded part of Detroit PETER MOROANnautm 1987 and has since reshaped it into a major player with a series of acquisitions in cable and entertainment, the most spectacular being his victory in the 1994 battle to take over Paramount.

Karmazin came from a humble background in the New York City borough of Queens and battled his way to the top of Infinity Broadcasting, which CBS bought three years ago. He took over as head of CBS two years after joining the company and has since orchestrated ambitious deals, including the acquisition of the leading TV syndica-tor King World Productions. The deal faces some regulatory hurdles, but analysts predicted they would not hold up the deal. The company might have to sell some TV stations to satisfy federal ownership rules, and Viacom's half-interest in UPN might have to be sold or folded into CBS in order to comply with a rule that forbids a company from owning more than one TV network. The CBS-Viacom merger would be the biggest in the me-' dia business since Disney's purchase of Capital CitiesABC for $19 billion in 1996.

the Nielsen audience ratings after the big four networks CBS, NBC, ABC and Fox -r and the startup WB network. In Detroit, Baskin and Dunlop agreed, the demise of or the dropping of UPN by Viacom stations could open up ties for programming aimed at younger and more lucrative demographics. CBS has been been criticized for producing shows that draw predominantly older audiences. UPN tried for younger viewers. Said Baskin: "It is conceivable the kind of programs on Channel 50 would be be geared toward the demographic strength of the station's programming the Tigers, the Pistons, the Red Wings.

If they do clear that, it'll pack quite a wallop in the market." Dunlop agreed that a bolstered sports operation might be the way to go. He speculated that two programming services, "CBS1 and CBS2, based on the demographics of our MTV, Nickelodeon and our other services" could emerge. From Page IF big." Shares of both companies, which have been run up over the last week on speculation that a deal was in the works, shot up even more after the announcement of the merger Tuesday morning. CBS shares rose $1.75 or 3.6 percent to $50.69 as the most active issue on the New York Stock Exchange, where Viacom's Class shares rose $1.88, or 4.2 percent, to $46.94 in heavy trading. Under terms of the deal, CBS shareholders would receive 1.085 shares of Viacom's Class stock, which values CBS at $50.93 a share.

Even though Viacom is buying CBS's shares, CBS management will have a major role in the new company. CBS President and CEO Mel Karmazin, 56, will be president and chief operating officer, becoming heir apparent to Redstone, 76. All operations in the new company will report to Karmazin, and Redstone's top two lieutenants, deputy chairmen Tom Dooley and Philippe Dauman, TV I Merger From Page IF not be reached for an explanation of the omission.) WXYZ-TV (Channel 7) programmer Maria Drutz said Tuesday, regarding the bureaucratic procedure the station approval might face, "The judges who'll determine that haven't been born yet." But Channel 62 general manager Kevin Cuddihy and Channel 50 chief Mike Dunlop agreed Tuesday that if both Detroit stations are retained, it's possible local newscasts probably produced by Channel 50's news operation could appear on both stations. CBS has been without a daily local news presence since late 1994. Other possibilities Other possible effects of the deal: The merged company would be "tower powers," said Cuddihy, referring to Channel 62's new transmitter at Meyers and W.

8 Mile and Channel 50's Southfield site. It would be a to have Detroit impact Metro Airport. The National Weather Service said 1.45 inches of rain fell at airport Monday evening. A re-; roofing project was under way at I a concourse that serves North- west Airlines wide-body planes and about an inch of rain covered some areas of the floor, airport spokesman Mike Conway said. The concourse was closed- about a half hour, and between- 200 and 300 passengers were stranded overnight because of, missed connections.

TAURMAN CENTERS INC. suc cessfully completed a $75-million private placement of 9-percent cumulative redeemable partnership equity in the Taub-i; man Realty Group Limited nership. The preferred eauitv was major local player in providing pivotal tower space for other TV and radio station transmitters. In syndication, one company would control three of the biggest players in the market: Eye-mark, King and Viacom. Syndi-cators provide large chunks of local programming talk shows, game shows, sitcom reruns and deal with all the stations in the market.

"One company would have an awful lot of- product," said Drutz. "And a lot of it competes with itself (in various time periods). I can't imagine they'll reduce the syndicated product," She said it might make sense for the newly mated syndicators to look at the development of a late-night presence besides CBS's "Late Show with David Letterman." The network: Analysts speculated Tuesday that Viacom would have to divest itself of its 50-percent ownership of the UPN network, with half-owner Chris-Craft taking full control. UPN consistently ranks sixth in purchased by an institutional investor Taubman didn't identify. Taubman Centers Bloomfield Hills-based real estate investment trust company, is the managing general partner of the" Taubman Realty Group Limited Partnership, which owns, devel-B ops, acquires and operates al shopping centers nationally.

The preferred equity has a fixed 9-percent coupon; no stated maturity, sinking fund or tory redemption and is convertible into Taubman Centers Series Preferred Stock-in 10 years..