The Cincinnati Enquirer from Cincinnati, Ohio • Page 17

PECEMBER 8, 1993 the Cincinnati enquirer EDITOR: JON TALTON, 768-8477 Test pilot lauds GE9s mew engine PORTFOLIO 3900 3800 CFM International lands $210 million order 3700 --(0 g-j- 25 26 2 Nov. mates at more than $50 billion. The first of 11 production engines will be built next year at GEAE's Durham, N.C., facility which will also become assembly site for its CF6 engines. GE now has more than $1.5 billion in orders for the engine from seven customers. "We are delighted that the GE90 responded so well on its maiden flight," said Russ Sparks, GE90 program general manager.

The largest jet engine ever built, with a fan diameter of 10 feet, the GE90 reached a record 105,400 pounds of thrust for a turbofan engine during ground testing at GE's Peebles, Ohio, test site last summer. The first flight test, originally slated for September, was pushed back when a test engine suffered some internal damage during ground testing in July. That problem, which GE said wasn't due to engine design, didn't delay overall development, the company said. GE90 makes 1st flight over Mojave Desert BY MIKE BOYER The Cincinnati Enquirer The GE90, General Electric's billion-dollar engine for the Boeing 777 and other new widebody jets, passed a major milestone this week when it flew for the first time at Mojave, Calif. "I almost didn't know it was there.

It was that smooth and quiet," said GE test pilot Phil Schultz, who flew a specially equipped Boeing 747-100 widebody jet on Monday with one GE90 engine mounted on the inside left wing position. The GE90-equipped 747 flew 3 hours and 40 minutes and reached an altitude of 41,900 feet without incident, a GE spokesman said. The GE90 test bed is scheduled to complete 130 hours of flight testing by the CFM International, the joint venture of GE Aircraft Engines and SNECMA, the French engine maker, said Tuesday it won a $210 million engine order from Cathay Pacific Airways of Hong Kong. The order is for 24 CFM56 engines plus spares to power six 230-seat Airbus Industrie A340 jetliners. Cathay Pacific, which plans to use the long-range jets for service to Europe, end of February, one of the major hurdles prior to the engine being certified by the Federal Aviation Administration next November.

The GE90 is scheduled to go into service in September, 1995, on the first of 30 Boeing 777s ordered by British its will take delivery of the new jets, valued at more than $800 million, in 1996. The airline has also agreed to lease four additional A340s starting in late 1994. The CFM56-5C engines are the sole power plant for the Airbus A340. GE and SNECMA said they now have more than 200 firm and optional orders for the engine valued at nearly $7 billion. GE Aircraft Engines and its revenue sharing partners SNECMA of France, FiatAvio of Italy and Ishikawajima-Harima Heavy Industries of Japan are investing more than $1 billion in the GE90 to power the new Boeing 777 and other next-generation widebody jets, a market GE esti on rapid-fire visual images," Perkins said.

"What this spot is able to do in a lot of ways, on a subtle level, is tap into that." Berol's Francis said the commercial also promotes a fairly non-descript item and gives it personality. "What we're doing is taking a commodity industry and branding it," Francis said. "That enables it to illicit loyalty." Francis, as well as Berol's CEO Charles Lieppe and other marketing people, are former Procter Gamble Co. veterans, where they mastered the art of brand management. Francis said that training has been invaluable.

"Not only are we marketing what we learned, but selling it as well." Fed eyes inflation pressures Rate hike unlikely The Associated Press WASINGTON While inflation remains under control now, the Federal Reserve must "carefully assess" warning signs that it may flare up again, David Mullins, the central bank's vice chairman, said Tuesday. The clear implication of Mullins' remarks to the American Enterprise Institute is that the Fed will move promptly to raise short-term interest rates at the first confirmation that inflation is heating up. It's unlikely, however, that Fed policymakers will decide to raise rates at their next regular meeting on Dec. 21. Mullins said that "the next several quarters" will determine whether recent gains in limiting inflation are transitory or solid.

"We're at an important crossroads," he said. Investors didn't wait before reaching their own conclusions. In the minutes after Mullins' speech this morning, the yield on the two-year Treasury note rose to 4.19 from 4.14, before declining later to close at 4.16. The last time the Fed raised short-term rates to combat inflation was February, 1989. In the interim, the central bank lowered rates 24 times to rescue the economy from the 1990-91 recession.

"Recent data confirmed the durability and sustainability of the expansion," the Fed vice chairman said. "We are well along in turning the corner from financial repair to new spending" by businesses and consumers. While there's "no evidence at this time that inflationary pressures are building," the Fed's Mullins said, several "early warning signals" bear watching. He pointed to: a recent acceleration in money supply growth; increases in non-oil commodity prices, including gold; and a recent jump of about 40 basis points in the interest rate on long-term bonds. A basis point is 1100 of a percentage point.

In particular, Mullins said the rise in long-term rates requires vigilance because, if the trend continues, that could threaten the strengthening economic re- covery. Low long-term rates, by stimulating business and consumer spending, are "the engine of the recovery," he said. Ad agency sells kids on pencils Yikes! television spot touts cool writing tool BY ERIKA KONOWALOW The Cincinnati Enquirer Thirty seconds is not a lot of time. But for a local advertising firm, 30 seconds was enough time to convince young consumers to add Yikes! pencils and school supplies to their staples of academic life. Northlich Stolley LaWarre did just that with its television spot for the product, giving a fledgling line needed exposure, which led to a surprising increase in sales and recognition.

Karen Francis, vice president of marketing for Empire Berol USA, the manufacturer of Yikes! and other pencil products, said the impact of the commercial has been significant, with a 50 increase in sales from last season to this year. Berol considers its selling season to be July to September. Additionally, said Francis, the commercial has brought Yikes! a 90 recognition rate among kids. While NSL would not disclose the amount of the contract, Francis said the spot was getting as much recognition as a Nike commercial, which cost more. "With a limited advertising budget, we got a great level of awareness." The half-minute commercial shows a fashion-conscious boy dressing for school.

But no matter what he puts on, his mirror image shows a 1950s nerd. It's not until he replaces his regular pencil with a Yikes! pencil that his image changes. "You can't say that buying a product will make you a cool person," said Don Perkins, NSL's senior vice president, creative director. "But what we did want to do was say 'Here's a pencil that takes something fairly common and makes it something completely unique' and like that, you can take this pencil and it can help visually distinguish you from a crowd, in a sense. It reflects your own unique personality." The Yikes! line includes basic No.

2 pencils that have been technologically advanced, featuring easy-grip grooves and not-so-standard square and round erasers. The pencils are dual-colored, in flat and metallic tones. The line also includes colored pencils that appear one color but are another, multicolored erasers, benda- ble rulers and asymmetrical school boxes. Negotiators 3500 a 6 Dec. Dow Jones 30 Industrials Daily highs, with closes at arrow tip Cincinnati Stock Exchange volume 4,208,700 Blue chips hit record high Bloomberg Business News Stocks closed mixed Tuesday, as rallies in big companies like Boeing and Bethle hem Steel were undercut by concern about a potential rise in interest rates.

The Dow Jones Industrial Average climbed 8.67, or 0.23, to a record 3718.88, thanks to gains by companies whose earnings hinge on an expanding economy. The previous high was 3710.77, set Nov. 16. The Standard Poor's 500 Index added 0.33 to 466.76, while the Nasdaq declined 1.74 to 769.35. Printpack to shut local plant The Cincinnati Enquirer Printpack an Atlanta-based maker of food and consumer goods paper packag ing, said Tuesday it will close its plant at 470 W.

Northland Forest Park, by July 1, eliminating 135 jobs. Printpack, which acquired the 87,000 square-foot Forest Park plant in 1986 when it acquired the Cloudsley said the plant was being closed because it was an older facility and lacked room for expansion. Court OKs GACC plan The Cincinnati Enquirer Cincinnati-based Great American Com munications Co. said Tuesday it will. launch its financial restructuring plan now that it has received bankruptcy court approval of its pre-packaged reorganiza tion plan.

GACC and related companies will reduce their total debt to $433 million from $910 million and its annual interest and preferred stock dividend costs will be cut more than half to $41 million through the issuance of new stock and debt. MMD adding 45 jobs locally The Cincinnati Enquirer Marion Merrell Dow Inc. said Tuesday it will relocate its Rugby Group product development and regulatory af fairs departments to Cincinnati from West Hempstead, N.Y. The move will involve hiring or relocating about 45 employees. Cox, Baby Bell form venture Bloomberg Business News Cox Cable Communications and South western Bell Corp.

Tuesday announced an agreement to form a $4.9 billion cable television partnership that will seek to expand rapidly to become the nation's third-largest cable TV concern. Southwestern Bell, the San Antonio- based regional Bell operating company, will invest $1.6 billion in cash in the venture for a 40 stake, while Cox will contribute 1.62 million cable customers for a 60 stake and $1 billion in a preferred partnership interest. RJR to cut 6,000 jobs Bloomberg Business News RJR Nabisco Holdings Corp. said Tues day it will cut 6,000 jobs, or more than 9 of its work force, and take a fourth-quar ter charge of $445 million under a res tructuring plan aimed at cutting costs. Lloyd's settlemerit rejected Bloomberg Business News Lloyd's of London Tuesday offered its investors 900 million pounds ($1.4 billion) if they drop lawsuits against their advisers and agents, whom they blame in part for their massive losses.

Leaders of the 37 action groups coordinating litigation im mediately rejected the offer, saying they wanted at least 2 billion pounds. Reynolds mulls restructuring Bloomberg Business News Reynolds Metals headed for a steep loss for the second straight year, said Tuesday it may take after-tax char ges of $150 million to $225 million to slash jobs at fabricating operations in Illinois, Kentucky and California. Reynolds The Cincinnati EnquirerPatrick Reddy Yikes! school supplies try to reflect different personalities of students. The reasoning behind the commercial came from numerous interviews with kids. "What we really found was that kids were looking for things that were reflective of the personality kids have," said John Fimiani, NSL account supervisor.

"Kids have inherently fun, playful, irreverent, colorful, non-adult types of personalities." The product line and the commercial, said Fimiani, reflects and encourages that. Additionally, said Perkins, the commercial was shot to appeal to kids, with the spot moving quickly from one scene to another, giving a lot of visual information. "This generation of kids (is) literally the MTV generation. They've been raised upbeat planning to sell rest of flavors business on world trade pact BY MIKE BOYER The Cincinnati Enquirer Once-troubled International, which sought bankruptcy court reorganization eight months ago, said late Tuesday it plans to sell its remaining flavors business to a German company as part of a plan to emerge from Chapter 11. Frank R.

Budetti, chief executive, said he signed a purchase agreement with Hans-Peter Wild, owner of Rudolf Wild Group, one of Europe's largest food ingredient manufacturers in Heidelberg, Germany. In the United States, Wild is a partner in a joint venture with season-maker McCormick Co. Budetti declined to disclose the financial terms of the agreement until the reorganization plan is filed with U.S. Bankruptcy Judge J. Vincent Aug.

Jr. on Dec. i Lx The Associated Press GENEVA An American-Eu ropean standoff on movies and airplanes is the latest stumbling block for a world trade deal, but the two sides said Tuesday they still have time to make peace before the final deadline. The failure to resolve differ ences over import restrictions on movies and TV shows and gov ernment subsidies for jetliner manufacturers came after the United States and European Community agreed on cutting farm subsidies. The latter dispute had held up the world trade talks for years.

But with the clock ticking away to the Dec. 15 deadline for completion of broader 116-nation talks on lowering trade barriers, negotiators criticized Washington 17. But he said Wild's offer was "clearly superior" to six other offers. Under terms of the agreement, which employs 170 people in Cincinnati, will continue as a stand-alone company and remain based here. Last month as part of an amended financing agreement with Star Bank, said it would file a reorganization plan by Dec.

17. once a hot stock on Wall Street, filed for bankruptcy reor- ganization on April 19, shortly after firing former chairman Jon Fries and disclosing its invento- ries had been inflated by as much as $8 million. Previously sold its New Jersey fragrance business for $4.7 million, its Hong Kong subsidiary for $800,000 and its Ca- nadian operations for up to $7.7 million. their differences. Dec.

15 is the last day President Clinton can notify Congress of a proposed trade agreement -under "fast-track" rules. The head of the General Agreement on Tariffs and Trade, Peter Sutherland, described the trans-Atlantic squabbles as "incredible folly." Japan's negotiator, Koro Bes-sho, said, "We are urging the United States and European Community to come to an agreement right now." At stake is a trade package that could add more than $200 billion annually to the sluggish global economy by cutting customs duties on imported goods, easing border controls and adopting tougher measures against unfair trading. It is the most ambitious trade reform package ever Mickey Kantor gives progress of talks. undertaken. After a 24-hour negotiating session, U.S.

Trade Representative Mickey Kantor and his EC counterpart, Sir Leon Brittan, were upbeat. Kantor said there was "absolutely and without a doubt" time will cut 80 of 200 jobs at its Louisville, plant. Unilever buys bread unit The Associated Press Unilever N.V. said Tuesday it has bought the frozen and pre-baked bread operations of a family-owned business in France for an undisclosed amount. The fresh-baked bread products of Menissez S.A.

are, not included in the deal. to wrap up an overall GATT deal. and the EC for -ot settling all.