The Cincinnati Enquirer from Cincinnati, Ohio • Page 33

Thursday, November 7, 1985 THE CINCINNATI ENQUIRER CUSINESS H-11 i jlx NX I Portfolio Eagle-Picher Develops Costly Asbestos Plan i iin. Achoctnc 1 ltnkprl with AhPKtns is linked with several lunz "it has inn? heen our objective to un ANALYSTS SAID thev favor the BY GREGG FIELDS The Cincinnati Enquirer 1420. 1400 138d 1360. iflJL diseases, Including asbestosls and lung cancer. Eagle-Picher no longer makes products containing asbestos.

It Is primarily a supplier to heavy industries, Including construction and automotive. The firm had sales of $436.27 million and net Income of $18.27 million In the first nine months of its current fiscal year. Petry said hundreds of cases are still filed every month against former asbestos manufacturers. More than 30,000 cases have been filed In total. IN JUNE, Eagle-Picher agreed to participate in the establishment of a Joint claims handling facility between manufacturers and insurers involved in asbestos litigation.

(Please see EAGLE, Page B-16) burden the company's annual Income statements from any asbestos litigation costs," said Thomas E. Petry, president of Eagle-Picher. "Now that the asbestos costs will no longer appear on future income statements, the progress of the company's operations can be more accurately measured." EAGLE PICHER'S asbsestos liability dates back to World War II, when a subsidiary of the company made Insulation that contained asbestos for ships. Asbestos was only a minor part of Eagle-Picher's business, and officials say only one employee has ever sued the company over It. However, Eagle-Picher became a defendant in thousands of cases filed by former shipyard workers.

move. Although it is admittedly an expensive solution, they say it frees up the company and its managers to concentrate on other areas. "The've had this monkey on their back, and it's Just been hammering away on management time," said Gerald May, an analyst with Paine Webber. "Before all this came along the company had a very favorable earnings history." Mary O'Neill, an analyst at Duff Phelps In Chicago, agreed. "It will be a pump to earnings," she said, because asbestos-related costs will no longer affect Income statements.

In the first three quarters of fiscal 1985, for example, the company's asbestos costs were almost one-fourth of its $43.87 million in operating Income. Eagle-Picher Industries which has paid out tens of millions of dollars in litigation related to asbestos-caused illnesses, said it has developed a plan that will put that problem behind it although at a cost of about $140 million in shareholders equity. The Cincinnati-based firm said its plan will provide it a $400 million cushion of protection against future asbestos claims through the year 2000. Of that $65 million is provided by existing insurance. In addition, the company will pay Aetna Life Casualty $75 million to provide future coverage of $150 million.

In addition, Eagle-Picher will establish a reserve of $185 million on the firm's balance sheet. ii ii ii i -LLLLiUL 1320 24 25 28 29 30 31 1 4 5 6 i Oct. Nov. Dow Jones 30 Industrials High And Clow (by whit dot) IBM Expects Strong Growth Dow Industrials Crash Through International Business Machines Corp. expects to show "some strong growth" in the fourth quarter or is5, John F.

Akers, IBM's president and chief executive, said. Akers did not give 1,400 Barrier Historic Dates Historic dates (or the Dow Jones industrial average: any projections for fourth-quarter profits in his speech to financial analysts in Greenock, Scotland. IBM executives said earlier this year they expected profits for all of 1985 to exceed those of 1984, and the company has not backed off from that predic Iff lililii' ft''iW inn 1896 First appears in the Wall Street Journal. Jan. 12, 1906 Closes above 1 00 for the first time, at 1 00.25.

Sent. 3, 1929 Reaches its closing peak for the bull market of AKERS the 1920s, at 381.17, less tnan two months before the Great Crash. tion even though fourth-quarter profits would have to jump 25 to achieve the goal after three quarters of declines. IBM announced it plans to cut Oct. 28.

1929 Records biggest drop ever, 38.33 points, or nearly 13 of the average's value, closing at 260.64. July 8, 1932 Closes at its Depression low of 41 .22, having temporarily the output of Personal Computers at its plant in Greenock, from which it supplies Europe, because of an anticipated seasonal downturn in sales in the first three months of 1986. fallen 89 in less than three TRANSPORTATION GENERAL ELECTRICS new unducted fan engine, with eight propellers at the rear. GE Fine Tuning New Engine; Great Fuel Efficiency Expected ENQUIRER NEWS SERVICES NEW YORK Bring on 1,500. That will be the rallying cry of Wall Street's bulls today after they tossed 1,400 to the historians in a late burst of blue chip buying Wednesday on the New York Exchange.

Off 1.60 at 3:30, the Dow Jones Industrial index surged to a record 1,403.44 in the final half-hour, notching a 6.77 gain for the day. Big Board volume picked up to 129.4 million shares from 119.1 million Tuesday. Winning issues topped losers, 964-618. "They feinted twice, then hit 'em with a roundhouse," a block trader said, refering to two moves to 1,400 by the Dow earlier In the session. DAN MARCIANO, first vice president at Prudentlal-Bache Securities, noted that "earlier sell programs hit the market but they couldn't take the market down to stay All of a sudden you had a market that was absorbing all the programed selling." "It's great.

They look wonderful," exclaimed Vice President John Burnett at Donaldson Lufkin Jenrette. "I don't see a weak group on the board." "It acts like it wants to go higher," said William LeFevre, vice president at Purcell Graham Co. "It doesn't look like a top in here." "It's been creeping up for the past couple of weeks," another analyst noted. "Some of the low-priced stocks are starting to move and they haven't run out of stocks to buy yet." "Lower interest rates have a lot to do with it," one dealer commented. "The dissipation of worry about higher Interest rates is a big factor In this gain." Another, citing "pent-up buying potential out there," predicted a "very strong advance." ANALYSTS SAID falling interest rates have raised hopes on Wall Street for a strong economy in 1986.

Interest rates have taken a tumble in the credit markets of late. In Wednesday's trading, rates were generally mixed with small changes. Lower rates would presumably act as a stimulus to spending for construction and capital equipment, giving debt-laden consumers some help in keeping the economy growing. At the same time, falling rates reduce the relative appeal of Interest-bearing investments like bonds that compete with stocks for investors' favor. years.

March 12, 1956 Closes above 500 for the first time, at 500.24. Jan. 18, 1966 Reaches 1,000 for the first time in mid-session, but drops back to close at 994.20. Nov. 14, 1972 Closes above 1 ,000 for the first time, at 1,003.16.

Jan. 11, 1973 Peaks at 1,051.70. Dec. 6, 1974 Closes at a 1 2-year low of 577.60, ending the worst bear market since the 1930s. April 27, 1981 Closes at an eight-year high of 1 ,024.05.

Aug. 12, 1982 Closes at a two-year low of 776.92, just prior to the start of a historic rally. Aug. 17, 1982 Rises 38.81 points, to 831.24, in its then-largest one-day gain. Oct.

25, 1982 Falls 36.33 for its second largest drop ever, but unlike the crash of 1929 it represents only 3.5 of the average's value. Nov. 3,1982 Soars 43.41 points, its biggest gain ever, to a new closing high of 1 ,065.49. Feb. 24, 1983 Soars 24.87 points to close at 1 1 2 1 .8 1 its first finish above 1,100.

April 26, 1983 Breaks the 1 ,200 level for the first time, rising 22.25 points to close at 1 ,209.46. May 20, 1985 Jumps 19.54 points to finish above 1 ,300 for the first time, closing at 1,304.88. Nov. 6, 1985 Rises 6.77 to a record 1,403.44, closing above 1 ,400 for the first time. moved twice as much air as was heated.

THE FUEL crises In the 1970s spurred development of more efficient "high-bypass" engines. Today's engines have bypass ratios of 5 or 6 to 1. The UDF, with its huge propellers, will have a bypass ratio of 35 to 1 or better, Gordon said. That means a much smaller engine-20 to 30 smaller-can be used to power the plane, and that's where the fuel savings come in. The current prototype uses two sets of the eight curved, thin propellers (the number of blades may change as development continues, Gordon said).

The sets of propellers turn In opposite directions. That counter-rotation has a kind of multiplier effect, aiding the efficiency of the engine. The aft propellers also draw air away for the forward set, reducing turbulence and again improving efficiency. But one fear with the UDF was noise. Propel-lors are noisy, because the tips of the blades usually surpass the speed of sound.

GORDON WAS asked how the engine sounds. "It's A above middle he Joked. "It's a hum. It's not that gut-shaking feeling you get with Jet engines." Nor is it the "wap-wap-wap" sound of conventional propellers. "I'd say it sounds nice.

I've walked around the engine. It doesn't sound loud and it doesn't have any objectionable tones." The engine will be considerably more noisy when the plane is cruising at high altitudes, when the engine is running faster. Up there, cabin noise becomes the chief concern. Gordon said cabin noire can be reduced by mounting the engines on the rear of the plane, behind the pressure bulkhead that encloses the cabin. And the slower rotation also holds down vibration that creates cabin noise.

On military planes, where function Is more important than the passengers' comfort, the engines will be mounted on the wings, In front of them. That will move more air over the wings BY JOHN J. BYZCKOWSKI The Cincinnati Enquirer It looks like science fiction, the type of thing you would discover in a 1965 issue of Popular Science, under the title, "The Airplane Engine of the Future." But General Electric Co. is serious about putting the propeller back on aircraft engines. GE says Its "UDF" engine-built around the core of a Jet engine with propellers on the back-will increase fuel efficiency as much as 50 over current technology.

The airlines are excited about the fuel savings, two airplane manufacturers are designing planes around the engine, but the development is unnerving a European manufacturer. TESTS DONE so far at GE, Boeing Corp. and the National Aeronautics and Space Administration have settled some basic questions about the engine. Engine mockups have gone through wind-tunnel testing at three locations to work out such things as the best shape and size of propellers, their number and spacing on the engine, and the engine's noise levels. This summer saw the testing of the first actual UDF (for unducted fan) engine at GE's test facility at Peebles, Ohio, about 50 miles east of Cincinnati.

The engine has been run up to full speed. Next summer, the engine will be tested for the first time in flight. "I think things have worked out in general better than we thought," said Bruce Gordon, head of the UDF program at GE in Evendale. More than 200 people are currently working on the engine. GE's schedule says the UDF will be approved by the federal government for commercial use in 1990, and will go into actual use in 1992.

The engines are more efficient because, simply, they move more air while burning less fuel. The ratio of air moved to air heated by the engine Is called the bypass ratio. The engines burn fuel to heat air; that hot air turns the turbines, which move more air. Engines in the mid-1960s had bypass ratios of 2 to 1, which meant they AIR FIGURES LISTED: Pan American World Airways said its scheduled traffic for October rose 2.1 to 2,289,000,000 revenue passenger miles from 2,242,000,000 in October, 1984. The company said scheduled load factor for the month fell to 58 from 62 United Airlines said its October traffic fell 11.1 to 3.51 billion revenue passenger miles from 3.94 billion miles a year earlier.

Load factor for the month was 58.7, down from 62 a year ago. EARNINGS KDI INCOME DOWN: KDI Corp. reported net income for the nine months ended Sept. 30 at $6.2 million, compared with $6.8 million in the comparable period a year ago. Sales for the nine months totaled $197.2 million, compared to $177.6 million in the same period of 1984.

KDI said net income in the three month period was $1.7 million, compared with $1.9 million in the same period of last year. Sales for the three months were $68.1 million, compared with $60.6 million in 1984. DIVIDEND DECLARED: Eagle-Picher Industries Inc. declared a regular quarterly dividend of 26 cents per share, payable Dec. 10 to shareholders of record Nov.

22. MULTIMEDIA RISES: Channel 5 owner Multimedia Inc. said net earnings for the third quarter ended Sept. 30 were $7,406 million, an increase of 14 over the $6,479 million earned in the comparable period a year ago. Third quarter revenues totaled $83,276 million, a 10 gain from the $75,401 million recorded in the same period of 1984.

For the nine months, net earnings were $27,860 million, compared with $24,248 million, a 15 increase over 1984. Revenues for the nine months were $245,644 million, an increase of 11 over the $220,462 recorded in 1984. Muiltimedia is headquartered in Greenville, S.C., but has an office in Cincinnati. LABOR CONTRACTS EXPIRING: Contracts covering 3.8 million workers expire or will be re-opened for negotiation next year, with major agreements to be bargained In the construction, farm machinery and steel industries, the Bureau of Labor Statistics reported. The total represents 41 of the 9.1 million U.S.

employees covered under major collective bargaining agreements of 1,000 workers or more. KENNER DROPPING 70: Ken-ner Products President David Mauer said it would be difficult to calculate the number of seasonal employees to be affected In the contemplated phaseout of toy production in Cincinnati. He said the number of seasonal employees needed next year will be determined by the workload. About 70 full-time salaried workers will lose their Jobs, Mauer said. Reports emerged two weeks ago that some jobs would be eliminated.

Minneapolis kneaH nonorol Mills, which OWnS boost Wednesday morning from International Business Machines, which said it expects to post "some strong growth" in the current quarter. IBM shares rose to 132 in active trading. High-tech Items improved with semiconductors in the lead. Texas Instruments climbed 4W to 94. National Semiconductor hit 11, up 14, while Anthem Electronics gained to 124.

Motorola gained 14 and Advanced Micro Devices 14. and improve int. (Please see ENGINE, Page B-16) WALL STREET also got a Milacron Moving Work To Oakley Omnicare Disposes Of A Division Omnicare Inc. said it has sold the unprofitable hospital sales division of its Greene Kellogg Inc. subsidiary.

The division was sold to Northwest Medical Specialties Inc. for an undisclosed amount of cash and notes. The division distributed respiratory and related equipment in the northeast. Omnicare said the sale will result In an after-tax loss of $500,000 for Omnicare, but said the division probably would have lost that In the fourth quarter, anyway. As a result, fourth quarter and yearly earnings statements probably won't be affected by the sale, the company said.

THAT PROGNOSIS is reflected In Milacron's earnings. Though sales were up, increases came in basic machining and turning centers and robots, three areas where foreign competition is intense. But Reading said Milacron's orders are for higher-profit items, such as profiling machines for producing structural components for aircraft, two "flexible-manufacturing systems" for a gun-maker and large robots for the automotive industry. In the third quarter, Milacron lost $52 million on sales of $196 million. That includes a $74 million write-off for restructuring, with an after-tax value of $46.3 million.

Those results compare to earnings of $3.7 million, or 16 cents a share, on sales of $184.2 million. For the first nine months of the year, Milacron lost $47.3 million on sales of $530.1 million, compared to a profit of $13.4 million, or 57 cents a share, on sales of $494.6 million last year. be affected by the move, and there could be layoffs. Transfers will be offered to employees in Wilmington and Greenwood, he said. Others will be retrained or offered early retirement.

The net effect of these moves will mean savings of more than $20 million annually in operating costs, and "will clear the decks for a speedier return to profitability," said James A.D. Geler, Milacron's chairman. "We're now in a position to concentrate our efforts on high-technology areas where we have the greatest opportunity for continued leadership and favorable operating margins," Geier said. Mitchell Quain, analyst for Wertheim Co. in New York City, supported the moves, and said Cincinnati will benefit from the higher production here.

"They're doing the right things," Quain said of Milacron. "It's Just their realistic assessment that (the machine tool business) Is not going to get better." year ago, to $247.3 million. Reading said the orders are extremely favorable because they involve Milacron's higher-profit items. The move in production Involves phasing out some old production here in Cincinnati, and current manufacturing operations at Wilmington and Greenwood. Though Milacron will continue assembly operations in Wilmington and Greenwood, moving the manufacturing of parts to Cincinnati will Involve write-offs of both plants and equipment.

Reading said Milacron is also modernizing production in Cincinnati, and that involves new, more efficient machines that will be run nearly around the clock. That modernization will mean virtually clearing out Oakley Plant 3 in Cincinnati. Milacron will move its robotics headquarters and engineering out of leased space in Lebanon, Ohio, to Plant 3. READING SAID he did not know how many people would BY JOHN J. BYCZKOWSKI The Cincinnati Enquirer Cincinnati Milacron Is moving some manufacturing from plants In Wilmington, Ohio, and Greenwood, S.C., to Cincinnati in a move that will help centralize production and reduce costs.

Company spokesman John Reading said he did not know how many people vovld be Involved in the move, or whether It would Increase employment In Cincinnati. One analyst, however, said "Cincinnati is the winner" in Milacron's moves. The move, however, produced a huge write-off of $74 million for the company in the third quarter. Milacron reported an operating loss for the three months ended Sept. 30, despite an increase In sales.

Reading said that loss came about because of higher sales of low-profit and no-proflt items such as robots and basic turning and machining centers. ORDERS ARE up 22 from a Kenner, announced In April that it would spin on lis loy amsiun a separate company. -Compiled By Dick Benson i from staff and wire reports INSIDE CINCINNATI 100: Luncheon honors the 100 largest privately held companies in uincinnau. rage o-io. -i -ii "I i.