Detroit Free Press from Detroit, Michigan on March 26, 1991 · Page 35
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Detroit Free Press from Detroit, Michigan · Page 35

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Tuesday, March 26, 1991
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!.'!S!SE: HA $6-miIlion natural gas treatment plant will be built in Otsego County. Page 2E. Tuesday, March 26, 1991 1" ':s I vTTriTTrir,ri Hctrott 4free Stress SECTIOil E NYSE, Page 4 Amex, Page 5 Mutual funds, Page 5 Call Business: 222-8765 iHEDOWX 2G5L84 I Market details, Page 4E DOW JONES QUICK CALL For stock updates call 1-900-246-4444 Each call costs 95 cents per minute VJK. v f III MICHIGAN mm i Stock rise slightly amid light trading Wall Street stocks closed with modest gains as investors, smarting from a series of corporate earnings disappointments, mostly kept out of the market. The volume of 153.9 million shares on the New York Stock Exchange was the smallest since 141.3 million shares changed hands Jan. 28. The Dow Jones industrial average closed 6.93 points higher at 2,865.84. Gainers led declines by almost 3 to 2. Meanwhile, yields rose on 13-and 26-week T-bills at the government's weekly auction. The Treasury Department auctioned $8.1 billion of 13-week bills at an average discount of 5.86 percent, up from 5.83 percent last week and the highest since March 4. Touch-tone NCR-AT&T TALKING: NCR pnonesomy. Con..tareet of a takeover bid from American Telephone & Telegraph Co., began talks with the telephone giant that could clear the way for a friendly merger, sources said. NCR, the nation's fifth-largest computer maker, had previously rebuffed AT&T, which has offered as much as $6.8 billion in a friendly takeover. Sources said top executives of the two concerns were in face-to-face talks in New York, but neither company would comment. BETTER MONEY ORDER: The U.S. Postal Service will begin issuing a money order that officials hope will be harder to counterfeit. Bank tellers and others cashing the orders easily can determine if they have been altered by holding them up to a light, revealing a water mark, security thread and the imprint of the original amount. BETTY CROCKER KNIVES? Betty Crocker has meant home-baked desserts and budget-stretching meals for decades. But even with the return to traditional values, cake mixes and Hamburger Helper don't always fit in with America's new eating habits. So this spring, General Mills Inc. of Minneapolis is broadening the brand's appeal with a housewares licensing program. Betty will lend her name to everything from Betty Crocker to cutlery. HAW CONTRACT REJECTED: By a heavy margin, 23,000 UAW workers in California, Oklahoma and Arkansas rejected a tentative four-year contract with McDonnell Douglas Corp. Workers were angered by co-payments on health insurance, caps on spending for retiree health care, and elimination of three annual bonuses equal to 4 percent of base wages. BRIEFLY: Cummins Engine Co. will open a production line for medium-duty engines in southern Indiana, bringing at least 500 jobs to the area. . . . American Express Travel Related Services Co. bought 2 percent of the common stock of the French resort operator Club Mediterranee. ' MORTGAGE RATES UP: Local mortgage rates drifted mostly higher this week, said Steve Conaway, president of Residential Mortgage Consultants Inc. of Northville. The 30-year fixed-rate loan " averaged 9.53 percent, up from last week's 9.45 percent. Fifteen-year fixed-rate mortgages ! averaged 9.26 percent, up from 9.19 last week. But ' adjustable rate loans fell slightly to 7.06 percent, down from 7.09 last week. LOOKING LEAN: McDonald's Corp. began serving its McLean Deluxe 91 percent fat-free burger at the 2675 Plymouth Road restaurant in Ann Arbor. Later this week, the burger will be available at the restaurants at 2310 Stadium Blvd. and 1220 S. University, a spokesman said. All Michigan McDonald's restaurants will have the McLean on their menus by April 30. I BOOT THE BOSS: Domino's Pizza Inc. owner Tom Monaghan should get the boot as owner of the Detroit Tigers, according to an unscientific poll of 78,000 7-Eleven customers. Voting by buying either 1 "yes" or "no" coffee or soft drink cups, 7-Eleven customers polled 57.5 in favor of the question: "Should Tiger fans give Tom Monaghan the boot?" The poll was part of 7-Eleven's Sound Off campaign at 102 Detroit-area stores. BRIEFLY: University Microfilms International, Ann ' Arbor-based republisher of information, has reached , an agreement with Manhattan-based publisher John 1 Wiley & Sons to offer 66 Wiley New York journal titles on microfilm. EARNINGS: National Techteam Inc., Dearborn, quarter Dec. 31. Net : income $86,000 (1 cent) vs. net loss $36,000 (1 cent). Revenues $2,124,000 vs. $1,303,000. Rospatch Corp., Grand Rapids, year ended Dec. 31. Net income $3,425,100 ($1.36) vs. net loss $15,619,600 ($6.18). ; Sales $68,920,700 v $70,344,600. , Security Savings Bank, Jackson, year ended Dec. 31. Net income $194,500 (27 cents) vs. $622,500 (88 cents). Chrysler's pension shortfall grows CliiiYSLES'S pension deficit The difference between the funds Chrysler has set aside for pensions and the projected amount needed. (In billions) $162 $2.81 $3.05 $2.75 JL 1987 1988 1989 1990 Source: Chrysler annual reports MARTHA THIERRYDetrolt Free Press Trouble In The SkyDome Auto union president goes to bat to solve stadium's financial woes By Bill mcgraw Free Press Canada Bureau CT31 ORONTO As president of the Canadian Auto Workers union, Bob White has negotiated some tough issues, but he never had to worry about a domed stadium with an outfield hotel that bills itself as the "greatest entertainment center" in the world. The 21-month-old Toronto SkyDome, though, is trapped in deepening financial trouble and the Ontario government has enlisted White to help bail it out. "This is a unique situation," White said in an interview. "And it's one in which whatever we do here, the province is going to have difficulty explaining to taxpayers." The SkyDome's financial difficulties bear watching in Detroit, where Tigers owner Tom Monaghan has said he's likely to move the team from Detroit. Wayne County Executive Ed McNamara has said the county would help finance renovation or a new stadium in the area around the current park. By all accounts, the SkyDome finances are a mess, even though the igloo-shaped building has become a tourist attraction. Its events especially Toronto Blue Jays baseball games have been drawing big crowds. The problem: Officials originally told the public that the SkyDome would cost $134 million (U.S.) to construct. The final tally is $515 million, and Ontario taxpayers are ultimately responsible for the bill. Despite huge crowds, the SkyDome's operating profit doesn't come close to covering the yearly payments on its currently $316 million debt, and even the hotel, which has 70 Committee recommends new U-M business dean BY JOAN RICHARDSON Free Press Education Writer A search committee at the University of Michigan is recommending that B. Joseph White become dean of the prestigious School of Business Aclrninistration. White has been interim dean since September, when Gilbert Whitaker became the university's provost. The Board of Regents is expected to accept his nomination at its April meeting. White pledged to develop the nation's best MBA program and to continue building a diverse student body. White, 43, has an unusual back-' ground for someone who has risen so high in academia: real-world experience mixed with solid academic credentials. With a doctorate from U-M, he embarked on an academic career at the university in the mid-1970s. Then White took a six-year detour and joined Cwnmins Engine Co. in Columbus, Ind., in 1981 as vice president of management de- BY GREG GARDNER Free Press Automotive Writer Chrysler Corp.'s unfunded pension liability grew to more than $3.6 billion last year, mainly because of benefit improvements negotiated in its UAW contract last fall, according to Chrysler's 1990 annual report. The shortfall, up 32 percent from the end of 1989, is one of the largest of any American company, but is not necessarily the most serious. It represents what Chrysler would have to pay if every employee with accrued pension benefits retired today. The labor agreement raised the company's monthly payment to retirees with 30 years of service from $1,500 to $1,800 over three rooms with a view of the field, is losing money. Robert Baade, an economics professor at Lake Forest College in Lake Forest, 111., and a nationally known expert on stadium financing, said virtually every new stadium ends up costing significantly more than officials predict, though he said the SkyDome's case is extreme. Baade called the construction of such elaborate sports palaces "civic monu-mentalism gone mad." The SkyDome is owned by the province of Ontario, but was built by a coalition of government and private businesses. Bob White The province and metropolitan Toronto governments each contributed $26.7 million, and 30 private partners each kicked in $4.45 million, for a total of $186.9 million. The remainder was financed through the sale of boxes and a government-guaranteed loan from a Toronto bank. White, who is closely associated with Ontario's ruling New Democratic Party, blamed the former Liberal government for failing to contain costs. Representatives of both the government and the businesses approved all spending decisions, which included the additions of such high-cost items as a retractable roof, a health club, elaborately decorated private boxes, restaurants and the $89 million hotel. In addition, said David Gar-rick, the SkyDome's vice president for public affairs, a strike See SKYDOME, Page 2E B. Joseph White velopment and later became the company's vice president for personnel and public affairs. In 1987, he returned to U-M as an associate dean. He taught courses in business aaninistration, and his research interests have See U-M, Page 2E years. Its impact was proportionately greater on Chrysler because the. No. 3 automaker has a higher ratio of retired to active workers than Ford Motor Co. or General Motors Corp. ' Only LTV Corp., which is reorganizing under Chapter 11 of federal bankruptcy law, has a larger pension debt, according to a list issued last month by the Pension Benefit Guaranty Corp., a federal agency that guarantees payment of basic retirement benefits earned by American workers. But LTV hasn't contributed to its plans since 1987. Chrysler continues to contribute to its pensions at levels required under federal law and is not seeking a waiver. The annual report, however, Mn'r I ' f '"jj1 -fc, if if -( 5 j j " 1 I I 1 I -"""" ; 1 19 Cut f "" ' 1"" " ' f ""r'SJ. -1 '- -1.1 aa-. . Zi'l .L.-JL, The 21-month-old Toronto SkyDome's financial difficulties bear watching in Detroit, where Tigers owner Tom Monaghan has said he's likely to move the team from Detroit. Toronto SkyDome At Age: 21 months Cost: $515 million (U.S.), quadruple original budget Current debt: $316 million Debt load needed to break even: $45 million Chief tenants: Toronto Blue Jays baseball team; Toronto Argonauts, Canadian Football League team Bells and whistles: NBD Bancorp to acquire suburban Chicago bank BY BARRY ROHAN Free Press Business Writer NBD Bancorp, Michigan's largest bank holding company, will buy a suburban Chicago bank in a stock swap worth about $207 million, the companies said Monday. By acquiring FNW Bancorp Inc., of Mt. Prospect, 111., NBD fortifies its position as the sixth-largest bank holding company in Illinois. FNW Bancorp, with assets of $1.3 billion, is the holding company for eight banks that operate 17 offices in suburban Chicago. They include the First National Bank of Elgin, First National Bank of Mt. Prospect, and Heritage Bank in Woo-dridge. The agreement in principle calls for an exchange of .38 of a share of NBD common stock for each of the 13.8 million shares of FNW stock. NBD's stock does provide some new insights to Chrysler's financial tribulations. For example, efforts to sell a controlling interest in its Chrysler Financial Corp. unit have been hampered by two cuts in Chrysler's debt rating in the last year. That means Chrysler Financial, through which the automaker finances about a third of its car and truck sales, must pay higher interest rates on the money it borrows. "In the current economic environment, however, no assurance can be given that Chrysler will be able to complete sales (of non-automotive businesses such as Chrysler Financial) satisfactorily," the report states. The lower debt ratings also if A Glance 11-ton steel roof opens and closes in 20 minutes Giant video scoreboard, 35' by 115', contains 420,000 light bulbs 350-room hotel inside; 70 rooms have view of field 11,000 square feet of McDonald's restaurants 52,000 seats for baseball, 55,000 for football, up to 70,000 for concerts. closed at $39.25 a share Monday, up 50 cents, making the deal worth about $207 million at that price. NBD Bancorp is Michigan's largest banking company, with $27 billion in assets. It operates 396 offices in five states, including 337 in Michigan. NBD has about $3 billion in assets and 21 offices in suburban Chicago. NBD Chairman and President Charles Fisher III said the suburban Chicago communities served by FNW are among the fastest growing in the country and have great strategic importance for NBD. "We believe . . . combining with these strong, profitable banks will complement NBD's presence in the Illinois market," he said. The merger is subject to approval by FNW shareholders and Iskik regulators, the comi panies said. boost from 12 percent to 15 percent the interest rate Chrysler must pay on $1.1 billion in bonds issued last May for its new Chrysler Technology Center in Auburn Hills. Chairman Lee Iacocca has said that thf mmranv'e $3 hillinn rrvst- cutting program will not affect the $16.4 billion budgeted on new models and more modern equipment in the next four years. . , Of that, more than $9 billion is targeted for the new line of midsize cars code-named LH, to be introduced in mid-1992, and the. new sport utility vehicle to be produced beginning December in its new Jefferson Avenue assembly plant on Detroit's east side. RenCen's Westin will get makeover BY JOHN GALLAGHER Free Press Business Writer The Westin Hotel in the Renaissance Center has embarked on a $15-million campaign to spiff up its rooms and its image. ; . Detroit's largest hotel will create an executive class to cater to top business travelers. This new "hotel within a hotel" will include , 92 rooms. The room price of the new class of service was not available. The Westin will unveil its plans at a press conference Wednesday and declined to provide details before then. The Westin also will redesign its 1,400 guest rooms to make, them accessible to disabled customers. And the makeover includes a general redesign of guest rooms and ballrooms. This makeover will include new signs, enhanced lighting in hallways, and other improvements. Although a spokesperson for the Westin said the makeover was part of a scheduled long-term improvement plan, it comes at a slack period for metropolitan Detroit's hotels. Occupancy rates have fallen to about 55 percent from about 65 percent in 1985. This period follows the tremendous building boom of the late 1980s. The number of hotel rooms in metro Detroit roughly doubled in five years to today's total of about 25,000. But all the new competition drove down occupancy levels and put pressure on hoteliers to cut rates. Most hotels are feeling the pinch. "Demand is somewhat static right now. I think it's probably, going to be mid-1992 before we see any kind of meaningful rise in occupied rooms," said Chuck Skel-ton, a hotel analyst with Southfield-based U.S. Realty Consultants Inc. Indeed, Smith Travel Research shows that demand for hotel rooms in metro Detroit rose a meager 0.4 percent last year, compared with 3.7 percent nationally. To compete in this climate, some hotels are trying to offer more value, either by cutting rates further or by offering higher quality service. "It sounds to me (as if) they're trying to create demand," Skelton said of the, Westin's plan. "It sounds wise to me. They've got to stay competitive. Right now, the guy who sits back and does nothing is just going to lose market share." The Westin Hotel will spend $15 million on renovations. ""fee L V

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