The Indianapolis Star from Indianapolis, Indiana • Page 25

The Indianapolis Star SATURDAY, JANUARY 30, 1988 Business B-5 Future of New Castle parts plant uncertain Briefly (Chrysler) believe an" outside vendor can supply them cheaper, even if It's from Its own former plant." Keller said. Chrysler will only say "a company our size receives inquiries about possible acquisitions and divestitures." Douglas E. Nicholl, a company spokesman, said other moves are not being timed to the UAW talks. The company anticipated closing one plant during 1988's first quarter because of the AMC acquisition, he said. "Anything else would be adjusting our schedules according to the market." Nicholl said.

"It's no secret the market is down right now." Chrysler has one other Indiana Acustar facility the Indianapolis electrical plant the automaker is closing. That factory's shutdown is scheduled to be completed in early 1989. the same agreement from Chrysler. Some analysts say they believe Chrysler, in effect, wants to make major restructuring moves now before a new contract takes effect. Just this week.

Chrysler said it would close its aging Kenosha. assembly plant, which it took over with the AMC acquisition. Maryann N. Keller, vice president of Furman Selz Mager Dletz Birney said Chrysler could review Ford and GM negotiations and plan accordingly for Its own contract talks. "That's one of the benefits of going one year late," she said.

In the case of Acustar, the automotive components business is even more volatile and competitive than selling assembled vehicles. Selling Acustar would provide Chrysler cash and move a major worry. "They fear is present even though Chrysler said this month It would invest $27 million at New Castle for new equipment. "People have been scared they're going to lose their jobs," Zachary said. All of this comes at a time of slipping auto sales and consolidation for the No.

3 domestic automaker. Chrysler last year acquired American Motors Corp. That resulted in excess production capacity. White- and blue-collar workers are being laid off, and previously announced investments in new equipment are being delayed. Given that overall picture, observers suggest Chrysler wants to make adjustments before It negotiates later this year with the UAW.

Last year, the union gained job security provisions from Ford Motor Co. and General Motors Corp. The union will press for The facility employs about 1,000 people. Zachary said union officials have been under pressure for nearly a decade to grant management demands aimed at improving productivity especially after losing 1,800 Jobs. "We've done this since '79," he said.

"They can only hold the gun to your head for so long." Among the most recent adjustments sought by management was a "modern operating agreement." In December 1986, plant workers approved slashing the number of Job classifications, which traditionally acted as a form of job security. Under the pact, workers perform a variety of tasks instead of highly specialized Jobs. The agreement cut job classifications from about 70 to 10. Zachary said workers feel shortchanged, especially with the uncertainty of what a new management might bring. That By BILL KOENIG STAR STAFF WRITER It appears 1988 Is shaping as a rocky year for Chrysler Corp.

workers in Indiana. Last week, the automaker said it was laying off 500 workers at its Kokomo transmission plant. Now there Is concern about the future of the firm's New Castle factory, which pro duces front-wheel hub assem blies and other components. That's because Chrysler has put Us Acustar Inc. components unit up for sale.

That subsidiary includes the New Castle facility. Though Chrysler won't com ment, potential buyers, such as Sheller-GIobe Corp. in Toledo. Ohio, have confirmed being ap proached by the automaker. "For 10 years now, we ve giv en concessions, said bei Zachary, president of United Auto Workers Local 371.

which represents hourly employees at the New Castle Acustar plant. 1 i ill I AC0CCA "ill ijii'llil I7'vMY i- Mil a miiii nii C'J ASSOCIATED PRESS ndiana FROM STAFF AND WIRE REPORTS DENTAL FIRM MOVING Ryker Dental Depot will move out of Downtown Indianapolis for the first time in its 55-year history. Ryker, the state's largest independently owned den tal supply firm, will move its 27 employees to Park 100 in late March. The Northwestside business park is owned by Duke Associates. The one-story building Ryker occupies at 426 North Alabama Street was recently bought by Mansur De velopment an Indiana polis real estate developer.

The move "was inevitable," since Ryker needs more storage space, owner Fred E. FJoyer said. ACQUISITIONS COMPLETE First National Cincinnati Corp. completed previously an nounced purchases of First National Bancorp, Aurora; and First Sidney Banc Sidney. Ohio.

Aurora First National Bancorp Is the parent of the First National Bank of Aurora, which operates three offices in Dearborn County. The compa ny has total assets of $55 million. First Sidney Banc Corp. is the parent of First National Bank. Sidney, which operates nine offices in Shelby County, Ohio.

Nation TEXACO POSTS LOSS Troubled oil behemoth Texaco Inc. said it lost $4.76 billion In the final quarter of 1987 and $4.4 billion for the year, reflecting restructuring charges stemming from its efforts to settle an exhaustive legal battle with Pennzoil Co. and emerge from bankruptcy court. The results trailed only the $4.87 billion quarterly loss reported by American Telephone Telegraph Co. for the final three months of 1983.

STOCK BUYBACK Allegis Corp. will buy back about two-thirds of Its common stock for $2.8 billion, partly with proceeds from sales of hotel and car-rental operations. The plan apparently averted a potentially destructive battle between management and Coniston Partners, a New York investment crouD that is the largest shareholder in the parent of United Airlines. Coniston accused management earlier this week of attempting to renege on a promised $50-a-share distribution to shareholders resulting from the sale of its non-airline businesses. PRICES UP Prices farmers got this month for raw products rose an average 2.4 percent over last month and opened the new year 7.4 percent above January 1987.

The Agriculture Department's Agricultural Statistics Board said higher prices for cattle, hogs, oranges, soybeans and broiler chickens contributed most to the January increase. Lower prices for strawberries, turkeys and peanuts helped dampen the gains for other commodities, however. TONNAGE INCREASES Large increases in grain and iron ore shipments helped push shipping on the St. Law rence Seaway to nearly 40 mil lion metric tons in 1987, up 6 percent from the preceding year. "After back-to-back years of 37 million tons, we're pleased to have reached the 40 million mark," said James Emery, administrator of the U.S.

St. Lawrence Seaway De velopment Corp. World STEEL OUTLOOK Crude steel production among mem bers of the Organization for Economic Cooueration and Development is expected to fall by at least 2 percent this year. Steel consumption rose by between 2 percent and 3.5 percent last year from the 1986 level of 348.3 million tons. Most of the increase was in the United States and Ja pan.

"WAR" DECLARED Brazil's President Jose Sarney said he is putting his country's economy on a war footing and abolishing 40,000 federal jobs to head off the risk of hyperinflation. Prices are now rising at about 500 percent a year with many economists predicting the rate could hit 800 percent by March. Change of heart The sign outside Fred Kauzrich Chrysler Corp. announced earlier this Kenosha, tavern used to read week that it was closing its Kenosha "Lee lacocca for president," but after plant, Kauzrich had a change of heart. About 5,500 people will be put out of work when the auto assembly and stamping facilities are closed.

Japan again plans to limit car exports to U.S. VA drops maximum interest rale to 9.5 ASSOCIATED PRESS Washington The Veterans Administration said Friday it Is lowering its maximum Interest rate for federally backed VA home mortgages a full percentage point to 9.5 percent. The VA said it was making the change, to take effect on Monday, to bring Its rate in line with the mortgage market, which has been moving clown in recent weeks. The Federal Home Loan Mortgage Corp. said Friday the national average for 30-year, conventional mortgages, those without government guarantees, fell to 10.16 percent this week, down from a national average of 10.34 percent last week.

It was the lowest level since last April. The lower VA rate means the monthly payment on a typical VA home loan of $70,000 will be nearly $52 less per month. The last change in the VA rate was Nov. 10, when it was reduced from 1 1 percent to 10.5 percent. The new drop of a full percentage point pushed the rate down to its lowest level since early last year when It was 8.5 percent.

It was raised to 9.5 percent in April 1987. The VA said that effective Monday a variety of other mortgage rates also would decline by a full percentage point. Graduated payment mortgages will drop to 9.75 percent; home Improvement loans will decrease to 11 percent; and loans for mobile homes will drop to 12 percent. AM General cuts 140 jobs in Indiana UNITED PRESS INTERNATIONAL South Bend, Ind. The AM General Division of LTV Corp.

Friday laid off 140 people, nearly one-third of its white-collar work force at plants in South Bend and Mishawaka. company spokesmen said. There arc 440 salaried employees at the two plants, said Craig McNab. a company spokesman. "This is the third, and largest, reduction in salaried work force since 1986.

since we did not win the M939-A2 5-ton contract (from the Army). It Ls right through all of the departments in the office. Sales, finance, material contracting, bookkeeping, information management, the computer kind of stuff." he said. McNab blamed the need for layoffs on the company's failure to win two major government contracts, Including the 5-ton truck contract and a contract to build vehicles for the U.S. Postal Service.

The company builds the Hummer, the Army's replacement for the Jeep, and other trucks for military use. McNab said the company still plans to bid on Army contracts for a cargo hauler and for a tank hauler. The company is also in the process of laying off 215 workers making the Hummer, McNab said. The Army, which was accepting 95 Hummers a day, is now accepting only 65 Hummers a day, although the total number of vehicles in the $2 billion contract remains unchanged. ASSOCIATED PRESS Tokyo Japan will limit Its passenger car exports to the United States for an eighth consecutive year to avoid fanning protectionist sentiment In Washington, the government said Friday.

The decision to retain the limit of 2.3 million cars in the fiscal year beginning April 1 was made in spite of a debate within the Ministry of International Trade and Industry. Some MITI officials argued 1988 was a good time to scrap the restraints because the strong Japanese yen has raised export prices so much that automakers will not even fill their allotment In the current fiscal year. The Japan Automobile Manu Bankrupt Lafayette retailer trolled acceleration of exports and renewed trade disputes with the U.S. auto industry. The yen has more than doubled in value against the U.S.

dollar in the last three years, forcing Japanese automakers to raise prices of their exports to the United States several times in recent years. Toyota Motor Corp. and Honda Motor Co. Ltd. last week raised sticker prices In the United States for the second time since last October.

Japan began limiting its auto exports to the U.S. market In fiscal 1981. The limit first was set at 1.68 million, but was raised to 1.86 million in fiscal 1984. to liquidator "There's something in the works," said J. Fred Terpstra.

vice president of Highland. Roland's petitioned for court reorganization last year. But after a poorer-than-expected Christmas season it decided to liquidate when talks with certain creditors reportedly bogged down. nuclear plant by Public Service and 11 other New England utilities. United Illuminating Co.

of New Haven, owns the second-largest share of Seabrook. Spokeswoman Margaret Melady said the Connecticut utility has no Immediate plans to increase Its 17.5 percent share In the project. A spokesman for Eastern Utilities Associates, a Boston holding company that has an overall 15 percent Seabrook share, said purchasing an additional share of Seabrook was a possibility. facturers Association announced Friday that Japan's exports declined 6.1 percent in calendar year 1987 to 2.2 million autos. But MITI chief Hajime Ta-mura said the government decided to continue the restrictions In light of rising protectionist sentiments in the U.S.

Congress. "No restrictions and self-restraint may give (two) different impressions," he said. "If and when it is confirmed that such restraints are no longer necessary, even during fiscal 1988, the restrictions will be removed," he said. In Washington, the Reagan administration reacted coolly to the continued restraints. "We haven't asked them to do it.

In fact, since 1985. we inventory left at Its stores when they closed Jan. 22. Consolidated Stores, which operates the Big Lots stores that sell discounted and close-out merchandise, will run going-out-of-business sales in Valparaiso and Champaign. 111., as soon as inventories are taken, Roland's executive Steven Lewark said.

Lewark said Roland's should "It's certainly possible," Martin Klein, a New York bankruptcy lawyer, said. "One of the things you can try and do in a bankruptcy proceeding is sell assets." Broken by its $2.1 billion investment in the stalled Seabrook plant, Public Service filed late Thursday for protection from creditors under federal bankruptcy laws. It was the first bankruptcy filing by a major public utility since the Depression. The lack of recent precedents for utility bankruptcy filings left have been urging them not to put on automobile export restraints. That policy hasn't changed.

We favor free and fair trade." said White House spokesman B. Jay Cooper. The administration has contended all along that the Japanese quotas, while they may benefit U.S. automakers, still represent the kind of artificial market restraints It is seeking to eliminate in world markets. Japanese automakers have long argued the limits should be removed, saying the quotas originally were set to allow U.S.

automakers to recover from an industry slump from which they have now recovered. Some of Tamura's aides, however, argued that termination of the curbs might result in uncon sells inventory know by Monday whether it has received court permission to sell its Lafayette store, Loeb's, to a retailer he did not identify. The company also is negotiating to sell Its Champaign store to retailers there, and is negotialng with Highland Department Stores, a northwest Indiana chain, about selling its Lowen-stlne's store in Valparaiso. financial and legal analysts puzzled as to what would happen to Public Service's $3 billion in assets. Public Service President Robert Harrison, promising that electricity service would not be disrupted for the utility's 365,000 customers, said it was too early to determine how the assets would be treated in a reorganization that some estimated could take two years.

Harrison acknowledged Thursday that the sale of Public Service's share in Seabrook could be considered if the "price was right." Seabrook is owned I Merchandise from Roland's of Bloomington Inc. will be handed over to a liquidator while the bankrupt retailer negotiates to sell three of its stores. Under an agreement reached Friday In U.S. Bankruptcy Court in Indianapolis, Consolidated Stores Inc. will pay Lafayette-based Roland's 35 percent of the estimated $1.5 million value of N.

Hampshire utility may sell its share of UNITED PRESS INTERNATIONAL Concord, N.H. The possible sale of the Seabrook nuclear power plant one of the nation's most expensive reactors loomed Friday in the aftermath of the project's principal owner filing for bankruptcy court protection. Analysts said they were uncertain about the course of Public Service Co. of New Hampshire's financial reorganization, but some predicted the utility could be forced to sell its 36 percent share of the S5.2 billion Seabrook project..