The Cincinnati Enquirer from Cincinnati, Ohio • Page 22

THE CINCINNATI ENQUIRERFriday, August 13, 1982 B-7 0 Inventory-Sales Figures Channel 19 Reported Sold By Metromedia Confirm Ling ering Recession sion less likely in the next month JVASHINGTON business inventories rose 0.3 in June as slow sales in showrooms kept unsold goods waiting in warehouses and on company Jsack lots, new government figures indicated Thursday. I "The inventories gain was Accompanied by a 12 decline in June sales by manufacturers, Wholesalers and retailers, the Commerce Department report Showed. Not by coincidence, a big 0.9 May inventories decrease haiS been accompanied by a 2.9 Sales gain. Analysts said they believe Jn any companies' officials plan further cutbacks in Inventories, a strategy that could make stepped-up production and genuine recovery from the reces might have been building stocks in June, at least in part, "in anticipation of the tax cut, thinking that some of that money might filter through to them." Ernst was skeptical, saying that purchasing managers in general "don't sound like their trying to build up Inventories on purpose. Even with interest rates coming down a bit, it's expensive to hold inventories you can't move them." Rising inventories can be a sign of renewed confidence, with business managers preparing for stepped-up demand as the recession comes to an end.

But that generally applies only when sales also are rising. Falling sales tend to make inventories grow for a' negative reason: or iwo. On a brighter note, Commerce "officials said that retail sales rose 1 in July. But analysts said such sales will have to rise even more In August and September to spur much recovery. COMMENTING AFTER the Inventories report, David Ernst, a vice president with Evans Economics in Washington, said "I'm afraid this fits into this pattern we've seen where the economy isn't really going Both Ernst and Robert Ort-ner, Commerce's chief economist, said business executives apparently are still trying to reduce inventories.

Ortner added one positive suggestion: That auto dealers If no one is buying products in the showroom, there's no reason to bring in more from the warehouse and there might even be incentive to slow production further. MOST ECONOMISTS, both inside and outside the government, expect at least modest recovery in the next few months, basing their hopes in large part on increased sales flowing from the July 1 tax cut that should have added to many Americans' purchasing power. But Ortner said, "It appears that the economy was still down in June." In that month, the new report said, inventories rose to a seasonally adjusted $512 billion for the nation's manufacturers, wholesalers and retailers. That included a 0.5 decline for manufacturers and gains of 1.7 for retailers and 0.9 for wholesalers. Total sales, also adjusted for normal seasonal variation, slid to $344.5 billion.

The new figures put the June ratio of inventories to sales at I. 49, up from the 1.46 of May but still below the 1.52 of April. Managers like to keep that figure low since they aren't making much money while inventories just sit in back rooms. As reported earlier by Commerce, the figures Indicated that June was indeed a bad month for car dealers, with sales plunging II. 4 and dealer inventories rising 5.9.

BY TOM BRINKAAOELLER Enquirer Reporter Cincinnati's WXIX-TV, Channel 19, has apparently been sold to an as-yet unannounced buyer for between $45 million and $50 million by Metromedia Inc. No one in the New Jersey-based company was available to confirm the sale Thursday, but several sources, as well as a Chicago newspaper, reported it to be true. An informed source in the broadcast financial community, who asked not to be named, said that John W. Kluge, Metromedia president and chairman of the board, told him this week about the transaction. "IT'S GONE.

It's sold," Kluge told the source. Kluge said he had "a handshake deal" with the buyer but would not announce who that was "until the Ink is dry on the contracts," the source said. An agreement In principle to sell a broadcast property, such as this contract, is subject to final approval by the Federal Communications Commission (FCC). The Chicago Tribune also reported the sale Thursday. The paper said Metromedia Is selling Channel 19 in order to buy WFLD-TV, a Chicago UHF station.

FCC rules limit a company's TV's holdrj ings to a total of seven stations, only five of which can be VHF stations (channels 2-13). Metromedia currently owns five VHF and two UHF stations: To buy WFLD (Channel it would have to sell WXIX or KRIV, Houston. THAT WAS also confirmed by other sources inside the broadcast community, who said Metromedia has agreed to pay $120 million for the Chicago station. Metromedia purchased WXIX from U.S. Communications Corp.

In 1972 for the assumption of $3 million in liabilities, it was reported at the time, Barron's, a weekly financial publication, profiled Metromedia in its Aug. 9 issue. The article was critical of the high prices Metromedia has paid for its brokd-i cast acquisitions. Five days before that article was published, Me tromedia had closed at $222 a share. On Thursday, the stock closed at $196,625 per share.

Metromedia wants to own stations In the largest television markets, a Metromedia source said. It already owns TV stations in New York, Los Angeles, Washington D.C., Minneapolis, Houston and Boston, all larger than Cincinnati. Bankruptcy News Halts Stock Rally DUSinCSS fllQDSt EEC Hits Legality Of Pipeline Ban FROM ENQUIRER WIRES European officials, angered by the Reagan ban on pipeline equipment sales to the Soviet Union, argued Thursday the restrictions violate international law. In a legal protest delivered to administration officials, the European Economic Community blasted the ban, which covers European firms, as "an unacceptable interference" in the commercial affairs of the community. And It called on the administration to lift the restrictions imposed by President Reagan to condemn the military crackdown in Poland.

Otto Borch, Denmark's ambassador to the United States, and Roland de Kergorlay, head of the delegation in Washington, delivered the legal papers to officials at the Commerce and State departments. Commerce spokesman B. Jay Cooper said they met briefly with Guy Fiske, the deputy commerce secretary, and Sherman Unger, the department's general counsel. The papers referred to Unger for review and study," he said. Japan's Trade Surplus Declines Japan's trade surplus narrowed to $1.3 billion last from $1.5 billion a year ago as exports declined slightly more than Imports, the Finance petition under Chapter 11 of the' federal bankruptcy code.

AMONG ITS unsecured credit tors, Lombard-Wall listed New York's Chase Manhattan Chase confirmed that It had. loans of $45 million outstanding; to Lombard-Wall, but said Its risk" of loss was "substantially less" than that total. 1 Nevertheless, Chase fell 2 to 32, reaching their lowest point since 1979. ri NEW YORK (AP)-Word of problems at a small government-securities firm snuffed out an early rally in stock prices Thursday and left the market at a new 27-month low. Selling pressure was particularly evident in some banking Issues.

The Dow Jones average of 30 Industrials, up about 4 points at its best levels of the day, closed with a .29 loss at 776.92. The average has accumulated a 45.19-polnt loss since Aug. 2, and established a new low since the spring of 1980 in each of the past five sessions. For most of Thursday, it appeared the market would break its recent losing streak with a technical rally. But the advance faded in the closing stages of the session after the announcement that Lombard-Wall Inc.

had filed a Gattl, vice director of Credito Varesino of Italy, said of the AEG debt reduction plan: not too satisfactory. It's too general." Union Commerce President Resigns Union Commerce Corp. said Thursday that Lyman H. Treadway, chairman and chief executive, will assume additional responsibilities of president October 1. He will succeed Charles R.

Weeks who is leaving the Cleveland banking firm to head Citizens Commercial Savings Bank of Flint, Mich. Union Commerce currently is the object of a takeover bid by Cincinnati-based Central Bancorporation. Britain Just Muddling Through Britain's seasonally adjusted output in all industries fell by 1.5 in June from May, with output in the manufacturing Industries alone showing a faster drop at 1.7, provisional data released by the Central Statistical Office showed. The revised index for output in all industries during May shows that industrial production during that month was up only 0.4 from April. The preliminary index, announced last month, showed a 1.1 rise.

Similarly, the May index for output in manufacturing industry alone was sharply revised. There now appears to have been a 0.4 rise during the month, instead of a 1.4 rise as first reported. The all-industries index was unchanged from a year earlier, while output in the manufacturing industries alone was down by 2.3. The agency reported that the Index of industrial production for all industries (1975 equals 100) fell to 100.0 in June from a revised 101.5 in May. On the same basis, the index for manufacturing industries alone dropped to 88.2 from a revised 89.7 in May and 90.3 in June 1981.

Air Canada To Trim 2,000 Jobs Air Canada must reduce its workforce by 10, eliminating about 2,000 Jobs, in a major retrenchment to cope with continuing losses, company president Claude Taylor announced Thursday in Montreal. "Current and expected economic conditions for the next two years make restraint absolutely essential," Taylor said. "There do not appear to be any immediate prospects for early improvement in the current disappoitlng levels of traffic and yield." The ninth largest airline in the non-communist world had an operating loss of $36.5 million (Canadian) for the first six months of the year, compared with operating income of $22.1 million in the first half of 1981. Dollar Declines As Rates Fall The dollar fell against major currencies in U.S. and European trading Thursday as short-term U.S.

interest rates turned sharply lower. The price of gold rose more than $4 an ounce. The dollar fell below 2.5 West German marks and below 7 French francs in late U.S. activity. Dealers said U.S.

interest rates, whose lofty levels in recent months have provided strength for the dollar, tumbled in part because the Federal Reserve injected reserves into the banking system. Ministry reported Thursday. Exports fell 12.2 from July 1981 to $11.9 billion, while Imports fell 11.9 to $10.7 billion. The trade figures were also down from June's surplus of $1.7 billion. Japan's trade surolus with the United States was $11 "billion.

Exports to the United States fell 6.5 from year earlier to $35 billion, while imports from the Ainitea states edged up 0.2 to $2.1 billion. Exports to the United States accounted for 27 of all Japanese shipments abroad, while imports from the United States accounted for 19.8 of all grow more rapidly than under a conventional amortization scheme. In an example furnished by GEM Savings, a conventional $40,000 loan at 15 would entail monthly payments of $512.33. So would a GEM loan. The payments on the conventional loan would remain stuck at $512.33 for the full 25 years, but the GEM payments would inch up by 4 a year until, in the 12th year of the loan, they reached $788.71 a month.

But after 12 years, the GEM loan would be paid off. The remaining balance on the conventional loan after 12 years would still be nearly $35,000, because, as any homeowner knows, the early payments go mostly for interest and very little against the principal. Gem Savings said the rate of interest it will charge initially on GEM loans is 15.75. That rate will change weekly, based on a weekly auction by FHLMC. A blended loan rate of 14 will be offered on properties which already have mortgages from Gem or its Cincinnati-area unit, Central Progressive.

Acquisition To Put U.S. Shoe In New Market Cincinnati's U.S. Shoe Corp1; Thursday said It has an agree-? ment in principle to acquire; United Linco Corp. and its operating subsidiary, Merchant's Warehouse Inc. of Dallas.

Terms were not disclosed. Merchant's Warehouse, operating under the name Me r-chant's Linen Warehouse, retails linens, domestics and housewares to the tune of an estimated $16 million this fiscal year. It operates eight stores in the DallasFt. Worth area, and plans to open two more this year. This is U.S.

Shoe's first veni ture Into home furnishings retailing. The new division will- be part of the corporation's "brands' for less" retail group. ,1 U.S. Shoe Is a manufacturer; importer, wholesaler and reatiler of men's and women's footwear and is also a specialty apparel retailer. It said it expects the tion of United Linco to be accomplished in September.

GEM Savings To Introduce New Loans It's a natural. Gem Savings Association of Dayton said it has been granted exclusive rights to offer GEM (growing equity mortgage) loans to homebuyers through its 29 Southwestern Ohio offices for 120 days. GEM loans are the brainchild of the investment houses, Merrill Lynch and Salomon Brothers. After a savings institution originates a GEM loan, it sells it to the Federal Home Loan Mortgage Corp. (FHLMC) in exchange for participation certificates guaranteed by FHLMC.

Merrill Lynch and Salomon Brothers then resell those certificates to pension funds and other Investors. GEM loans can be written for up to $107,000 or 95 of the value of property and have a term of less than 15 years. Monthly payments are increased from the starting level by 4 each year and the in 'imports. Bankers Hear AEG Proposal i AEG-Telefunken AG formally asked Its creditors Thursday to accept a restructuring plan that would forgive 60 of the electrical concern's $1.84 billion debt. At least one banker balked at the proposal.

Senior officials of AEG of West Germany and the Swiss holding company for AEG's unci ntiwunu.1 interests met privately in Switzerland with nhnnt. Rf rrprlttjirs frnm European and U.S. banks. They asked for a response by next week, according to several "-bankers who asked not to be identified. AEG's proposal, which also has been submitted to a court in Frankfurt, West Germany, for approval, must be accepted by creditors holding 80 of AEG's debt and 50 of all Individual creditors.

Most bankers who attended Thursday's meeting could not be reached Immediately for comment. But Franco crease in the payment is applied to the remaining principal balance, causing the homeowner's equity to "vacation? Ohio Approves Assistance Plan CALL. TRI-COUNTY RETAIL 7500 SQUARE FEET STRIP CENTER SUB-LEASE ATTRACTIVE RATE ing, and administrative services it buys under 100-year-old contracts with HOPKINS HAD asked for the return of stock in Cin service grant a 2, $10 million loan to the Springfield Community Improvement Corporation. The state would guarantee another $10 million loan from private banks, and the corporation would borrow an additional $10 million to round out a $30 million funding package. Call PbH Collins 721-4200 Consumers' Man Lauds Bell Judge The Ohio Consumers' Counsel tliursday praised a federal court lodge for strengthening Clncln- nati Bell's hand in negotiations with American Telephone and Telegraph Co.

Hopkins, chief counsel representing the state's utility customers, said "We're pleased" that U.S. District Court Judge Harold H. Greene said Cincinnati Bell could take legal action if it dafesn't get a fair deal from tr COLUMBUS, Ohio (AP)-State officials gave final approval Thursday to a $20 million loan and loan guarantee proposal designed to keep International Harvester Co. from abandoning its Springfield truck plant. However, the state is in sort of a bidding war with Indiana, which is trying to get the company to retain a Fort Wayne truck plant One of the company's three North American truck plants will be closed and another enlarged, under an IH reorganziatlon plan.

In Springfield, a company spokesman, Larry Jagnow, said Harvester was "very gratified" by Ohio's action but warned that the final decision has not been made. Under the plan, the state would cinnati Bell, claiming the shares were given when the contracts were first signed and should be returned if they are broken. Hop-; kins had said the shares are! worth between $35 million and $70 million, and that their return would compensate Cincinnati Bell and its ratepayers for any deficiencies in the new contracts. But Judge Greene noted that Cincinnati Bell hadn't complained about having to renegotiate the contracts. If it decides it doesn't like the replacement contracts, "it may raise the issue, and the court will then determine whether the matter is appropriately addressed in the-context of the reorganization or by way of a separate legal action," Greene said.

to or raw scim. wn cms nos and Cincinnati Bell are negotiating a set of new license Contracts replacing those to be severed under a proposed breakup "of The contracts cover Bow much Cincinnati Bell must pay for technical advice, train MC Gains 34 In First Half TKE FRAKCXISE MARKET Why should go Into business? Why should I go into business now? Why I buy franchise? Why should I expand my business? How do I go about franchising my business? What are the legal requirements of franchising. If you have considered going Into business expanding your business. Cad 825-5830 WACE RICXAK3SJ0E K8IS88D 'FRAXCKISE EXCX1XSE' DVof Assoc Member fFA Or, sales experience in, the DP industry, especially to a specific marketplace. you're money-motivated and like playing with winners, we need to sit down and talk.

Call the number below for a personal interview, and go for it big with QANTEL! QANTEL. A winning team. With over 8.000 computer installations. More than 2500 service points worldwide. A team that has constantly demonstrated one of the fastest growth rates In the computer industry, and is just about ready to QANTEL is a leading supplier of industry-tailored hardware software packages, and we're looking to add specialty players to our roster.

Requirements: An aggressive track record in big-ticket sales. Or, management andor systems experience in a specific industry. Like manufacturing. Retail sales. Hotel management.

Distribution. Etc. CALL BILL CHERNISH AT (513) 769-4710 or drop by 4010 Executive Park Drive, Suite 112, Cincinnati, Ohio 45241, on August 13th or 14th Six-month net in 1981 was $48.45 million, which Included an extraordinary gain of $16.9 million on the redemption of some Penn central securities by a subsidiary, American Financial Enterprises Inc. AFC said its assets topped $4 billion at mid-year. Separately, In a filing with the Securities and Exchange Commission, AFC said it has increased its interest in American General an Insurance concern, to 5.1 of the outstanding common.

AFC said its subsidiary, Great American Insurance, had bought 35,500 shares as of Aug. 6, bringing AFC's total holdings to 1.24 million shares. American Financial Corp. (AFC) net earnings for the quarter ended June 30 were off 43 from tha like period a year earlier, but learnings for the first six months were up 34. AFC's profit for the second quarter of 1982 was $15.90 in the like period of 1981, it made 427.91 million.

(Earnings for 1981 were restated to include earnings Applicable to AFC's investment Jn Penn Central which the company began accounting for an equity basis in 1982. For the full six months, profit "ways $65.20 million, which includes first-quarter net gain of $42.7 million on the exchange of Reliance and Leasco securities in connection with their merger. ENGINEERS! ARCHITECTS! HAVE YOUR DRAWINGS COPIED PROFESSIONALLY ON THE XEROX 2080 PRINTING SYSTEM. REDUCE ENLARGE SCOT BUSINESS MACHINES 123 E. 4th St 421-9030 QANTEL BUSINESS COMPUTERS a Mohawk Data Sciences Company.