The Cincinnati Enquirer from Cincinnati, Ohio • Page 47

I i -a Oil I i I Kvi I nest MM Kentucky's small banks find niche BY JAN PASCHAL The Cincinnati Enquirer 3 r- rrrrv bra Workers at GE Evendale plant assemble one of CFM International family of engines. CFM, a joint venture of GE and SNECMA of France, is an example of the gain-sharing technique used to build GE's aircraft engine business. With growth certain to slow, GE cuts back BY MIKE BOYER The Cincinnati Enquirer After three years of rapid growth, GE Aircraft Engines in Evendale is facing some growing pains. The division's revenues have risen 71 from $3.8 billion in 1984 to an estimated $6.5 billion this year and Even-dale employment has increased by 6,000 jobs to about 20,000. But the prospect of slower growth in engine sales and heightened competition in both its military and commercial engine markets has caused GE to embark on streamlining moves.

Two weeks ago, GE announced it would eliminate 500 salaried jobs at Even-dale by the end of October and cut back on the use of contract employees, and that it might make further salaried and hourly job cuts later this year and next. Evendale's sister plant in Lynn, which relies heavily on military contracts, plans to cut 1,000 jobs this year and next. Lynn employs 10,000 people. The company declines to say how many jobs might be eliminated at Evendale. But I SEPARATE VOICE Businessmen train for their careers by studying i finance or engineering, but do they teach themselves to think? Management consultant Chris CCruden believes that like any skill, -thinking can be learned.

Page E-2 a RETAILING: Markets International is 'fin experiment that failed. But as it prepares to close at the end of the 1 'year, the few tenants who've succeeded wonder what they II do to keep their profitable businesses Page E-3 STRATEGY: Microwave ovens are how in 60 of American homes, but if people are going to do rnore than warm coffee or pop popcorn in them, the food has to taste better. Enter flavor experts Fries Fries. Page E-4 i MARKETING: Many procedures of plastic surgery are elective, and insurance won't cover the costs. To encourage people to spend money on a lift here, a tuck piere, a little promotion is in order.

Page t-IU 0 PROTEST: Teamsters Union Resident Jackie Presser will lead a rally Tuesday in Cincinnati of thousands of Teamsters from around the nation, protesting the federal government's attempts to take over the union. Follow The Enquirer for reports. ECONOMY: Economic reports due this week: on Tuesday, August retail sales and second-quarter foreign trade; on Wednesday, July I business inventories; on Thursday, August housing starts; and on Friday, the revision of second-quarter gross national I product. Watch The Enqirirer for reports. MORTGAGE RATES: "Twelve Tiercent is the mental cutoff: 14 is Omental cutoff; and when it to 16, creative financing Incomes into play." Sharon Keefer, Comey Shepherd.

SOVIET TRADE: "If we had reasonable controls, which I think we now have, we could substantially increase business." William C. Verity, Commerce secretory nominee, defending his support for increased trade with the Soviets. Change In employment from July, 1986, IV VUIJ, I mnvm, r- ectomof the seven-county Greater Cincinnati economy. Durable good manufacturing 1300 Nondurable good manufacturing Construction Transportation utllltiea g300 WholeMle trade Retail trade Finance, Insurance real estate Services 11,000 Government Source: Ohio Bureau of Employment Servicot There's gold in those hills of Northern Kentucky, bankers on both sides of the Ohio River agree. However, Northern Kentucky bankers say they are mining their home-grown lode in a big way despite a rush by Cincinnati and Columbus bank holding companies to buy up almost every independent bank in sight in Boone, Kenton and Campbell counties since interstate banking was legalized two years ago.

For example, Florence Deposit Bank, in booming Boone County, the state's fastest-growing county, saw its assets grow to $75 million at June 30, from $70 million on that date last year. Net earnings jumped 25 in the past year, in the face of growing competition, said Dennis McEvoy, vice president. "The advantage we have is we've been competing against the 'big boys' (in Cincinnati) since Day 1," McEvoy said. "This is a traumatic time for banks: 'Should we stay If we had not been successful in the recent past, we'd be interested in selling. But the public has shown great confidence in us." Kentucky Bancorp.

of Covington, the largest independently owned bank holding company left in Northern Kentucky, with about $300 million in total assets, also charted record growth in 1986. But those results include its acquisition of two nearby banks. "I believe we were the first to be approached by Huntington," said D.B. Briggs, president and chief executive officer of Kentucky Bancorp. "And then, last year, Huntington bought Covington Trust.

Then Central (of Cincinnati) came in and bought Citizens National, and Peoples Liberty was in a 'letter of engagement period with Huntington." In Newport, in adjoining Campbell County, Fifth Third Bank had already staked a claim by buying American National Bank in December, 1985. By March 31, 1986, First National Cincinnati Corp. entered the Northern Kentucky market by acquiring Newport National Bank. That didn't slow down Kentucky National Bank of Kenton County, the flagship bank of Kentucky Briggs said. "So here we were surrounded by two Cincinnati banks and one Columbus bank, and we grew 13 at the very same time that we were attempting to restrain growth." On Sept.

3, First National Cincinnati Corp. signed a merger letter with Peoples Liberty Bancorp. with $220 million in total assets. "It's just an expanding, exploding commercial real estate situation," Briggs said, citing Northern Kentucky's appeal to bankers. "You get up in a helicopter and look at 1-275, and you say, 'My between the river and the highway and the airport, look at all that land that has to be developed." Independent banks seek their place in the market.

Page E-10. 'U, Acquisitions of Northern Kentucky banks by Cincinnati- and Columbus-based bank holding companies. By Kentucky law, banks cannot branch across county lines, so to do business in all three Northern Kentucky counties, banks must be acquired in each. First National is the only Cincinnati bank which has not changed the names of its acquisitions to its own. Central Bancorp.

Inc. Union Deposit Bank of Boone County, acquired June 30, 1 986 after the bank failed. Citizens National Bank, of Fori Wright (Kenton County), acquired Aug. 5, 1986. Fifth Third Bancorp First Kentucky Bancshares Inc.

of Florence (Boone County), parent of Boone State Bank Trust, acquired March 31. 1986. American Bancorp. Inc. of Newport (Campbell County), parent of American National Bank, acquired December '85.

f7rsf National Cincinnati Corp. New Bancshares Inc. of Newport (Campbell County), parent of Newport National Bank, acquired March 86. Peoples Liberty Bancorp Inc. of Covington (Kenton County), parent of Peoples Liberty Bank, acquisition proposed Sept.

3, 1987. Huntington Bancshares Inc. Commonwealth Trust, parent of Covington Trust and other banks in Kenton, Boone and Pendleton counties, acquired January, 1986. Peoples Deposit Bank Trust of Boone County, acquired January, 1987. I Business.

Production and development ot military and commercial jet engines, and headquarters lorGE aircraft engine operations which include facilities in Lynn, Mass. Total Employment: 20,000 including 12.300 salaried and 7.600 hourly workers. 1906 sales: $5.9 billion, represented by $4.3 billion at Evendale and $1.6 billion at Lynn. 1986 engine shipments: 1,195 from Evendale, 1.357 from Lynn. 1987 estimated engine shipments: 1,400 from Evendale, 1,400 from Lynn.

fvtajor contracts this year: $2 billion-plus award in July from Airbus Industrie; engines shared 50-50 with SNECMA ot France. Deliveries starting in 1990. $650 million award in March from American Airlines to GE alone. Deliveries starting in 1988. tion and tirements, union officials said.

Mark Lobbi, chief power systems analyst with Forecast Associates, a private consulting firm in Newtown, estimates future cuts could eliminate about (Please see GE, Page E-4) to regain profitability company salvaged yet another steel maker Kentucky Electric Steel, hampered by labor trouble and closed by its owner in 1985. Borland got the community, state and local government and banks to support him, and after a few tries, won a new labor contract. Oklahoma, where the company acquired Erlanger Tubular a processor of tubular products. The company was having a poor 1986 and its parent company wanted desperately to sell it. Borland said business has increased since the NS Group acquired it.

Cincinnati, home of Imperial Adhe-sives the adhesive maker burdened by heavy debt from a leveraged buyout in 1983. In the two years since the acquisition by NS Group, Imperial's sales have risen by about 40. How Newport Steel changed its look. Page E-6. approve formally the company's acquisition by FMI at a special meeting Sept.

29. Taft had called off its regular annual shareholders meeting in July while the prospectus-proxy statement detailing the proposed merger was prepared. Lindner already controls 46 of Taft's stock through FMI, and Taft directors and officers control another 2. So approval is a near certainty. All Lindner needs is an additional 2 from the remaining outstanding shares to secure passage.

Taft shareholders can choose either $157 a share, or alternatively, $144 a share and one share of FMI common stock. FMI was trading at all-time highs last week on the over-the-counter market for about $14 a share. Taft considered other maneuvers. Page E-6. Newport Steel wins believers With recent diversification, company moves 1 FOCUS in one apparent money-saving move, GE has proposed a job reclassification program to the United Auto Workers Local 647, which represents about 6,000 production workers at Evendale.

The company won't comment on its discussions with the union, but union officials say GE wants to reduce the number of job classifications from about 110 to 33. The union said GE estimates the plan would mean the elimination of between 500 and 600 jobs. In addition, union officials say George Krall, vice president of the Evendale Production Division, has said the winding down of several military and commercial engine contracts this year and next could mean the elimination of 600 production jobs next year and in 1989. GE won't confirm or deny those cutbacks. Not all the job cuts would be layoffs; some would come through normal attri- Dennis Eggleston, president of Newport Steel Division.

of the original foursome. "With diversification, hopefully we won't see that again." Implementing a diversification plan, NS Group has also made believers out of: Ashland, where last year the independent sources, plus $157.5 million in cash in exchange for its $205 million investment in Taft stock since 1985. As a result of the partnership's dissolution, Taft will become a wholly owned subsidiary of FMI Financial a holding company controlled by Lindner. FMI plans to change its name to reflect its newly acquired interests in broadcasting. It's also considering selling off its other non-broadcasting business interests.

The sale would likely be to another AFC affiliate. FMI said it doesn't plan any changes among Taft's senior managers (several of whom are about to become millionaires thanks to Taft-issued stock options), but Taft's board will be realigned with a combination of FMI, AFC and Taft directors, the proxy statement said. Taft's shareholders are expected to 1 1 i i BY MARK BRAYKOVICH The Cincinnati Enquirer fter two years of losing money, the owner of Newport Steel is on a road Imof diversification that appears headed back toward profitability. Over the past six years, the managers of NS Group the Newport, holding company which operates Newport Steel Corp. have come to be known for their daring exploits.

They first made headlines in Newport, where a four-man team led by Clifford Borland resurrected the idle Interlake Steel mill in 1981. Critics doubted the highly leveraged firm could survive. Though hurt by foreign imports and a troubled oil industry the company's largest customer it has survived. With crude oil prices on the rise over the past year, steel shipments also have risen. "In the early going, there were a few ups and downs," said Dennis Eggleston, president of Newport Steel and a member Taft's stations to be split up quickly BY JON NEWBERRY The Cincinnati Enquirer arl Lindner apparently will waste no consolidating his hold on Taft 'Broadcasting Co.

after its upcoming merger with an American Financial Corp. subsidiary. The Lindner-led partnership that will acquire Taft will distribute all Taft properties and dissolve itself within 60 days of the acquisition, according to a combined prospectus-proxy statement mailed to Taft shareholders. Texas financier Robert M. Bass has already elected to take Taft's cable interests and WTVN-tV in Columbus in partial payment for his group's 24.9 stake in Taft.

The Bass group will get those assets, valued at $200 million by the partnership and slightly more than that by.