The Indianapolis Star from Indianapolis, Indiana • Page 37

The Indianapolis Star WEDNESDAY, OCTOBER 18, 1989 Business C-6 Briefly Gas Turbine puts propf an on hold 0 fast as turbofans, yet maintains fuel efficiency. However, each propfan would be about $4 million each, by some estimates, or 40 percent more expensive than current engines. Had McDonnell Douglas opted for propfans, two such engines would have been mounted at the rear of each aircraft. "We recognized fuel pricing was such it wouldn't cause an airline to switch to anything as revolutionary as the propfan," said William C. Campbell, a Gas Turbine spokesman.

Campbell said Gas Turbine's joint venture, PW Allison, will continue to develop a propfan "to make sure we can go forward. We, of course, expect fuel (costs) will climb." Gas Turbine has no plans to continue testing propfans, the spokesman said. Instead, Campbell said, the GM division will analyze data from previous tests. Gas Turbine began developing propfans in 1985. Kent Newcomb, an analyst with A.G.

Edwards Sons In St. Louis, said McDonnell Douglas had little choice. "They couldn't drum up enough support for it (the prop-fan) from the customer base," he said. "Are airlines being shortsighted? Perhaps," Newcomb said. "If there's another oil A By BILL KOENIG STAR STAFF WRITER Allison Gas Turbine's efforts to develop a new type of aircraft engine is in hibernation after an aircraft maker decided to stick with conventional engines.

Gas Turbine hoped the prop-fan a high-tech version of the old propeller engine would allow the General Motors Corp. division to re-enter commercial aviation in a big way, starting in the early 1990s. Had it happened that way, Indianapolis-based Gas Turbine could have added thousands of manufacturing jobs. Instead, Gas Turbine will remain on the commercial sidelines, perhaps Into the next century. For the past 30 years, Gas Turbine's primary markets has been the U.S.

military. McDonnell Douglas Corp. last week said it would build a new mldrange airliner without the propfan. The main reason: the company's customers airlines weren't interested. Gas Turbine and Pratt Whitney formed a Joint venture in 1 987 to help develop propfans for McDonnell Douglas.

The propfan is 35 percent more fuel efficient than current turbofan engines. Turbofans largely displaced propellers because the turbofans were faster. The propfan basically can go as PHOTO PROVIDED BY ALLISON GAS TURBINE Allison Gas Turbine and Pratt Whitney formed a joint propfans for McDonnell Douglas. means "it's not going to happen for several years." The St. Louis-based company's new series of airliners will McKinney led Bank One through several changes 3 Jf INDIANA FROM STAFF AND WIRE REPORTS ZOLLNER VOTE After 58 years without a union, workers at Zollner Corp.

of Fort Wayne will vote on whether they want to be represented by the United Auto Workers. The National Labor Relations Board set Nov. 8 as the date for about 750 production and maintenance employees to vote on whether to be represented by the UAW. STOCK SOLD The private Los Angeles investment firm Broadbeach Associates which had offered to acquire McGill for $62 a share, reported it has sold all but a small portion of its 7 percent stake in McGill Manufacturing Co. of Valparaiso.

SKF of Sweden has begun an unsolicited offer of $72 a share, or $104 million, for McGill, which manufactures anti-friction bearings and electrical specialty items. NATION UAL OFFER Citibank sought backing for a scaled-down $5.65 billion management-pilots bid for UAL hoping it could overcome the lack of bank backing that torpedoed the original $6.75 billion deal. Meanwhile, Los Angeles billionaire Marvin Davis said that he was with drawing his bid for the company. COMMODITIES PROBE Wendy Gramm, chairman of the Commodity Futures Trading Commission, endorsed most of a Senate bill to crack down on trad-Ing abuses but warned against relying on un-proven technology to do the job a concern also Gramm dustry leaders voiced by In-Gramm told sen- ators the agency soon will pro- pose restrictions on dual trading, a practice already under attack BREWERY BATTLE Co. of Mill Valley, parent of Pabst Brewing has filed suit in Milwaukee challenging the proposed sale of Stroh Brewery Co.

to Coors Brewing claiming the deal would drive smaller brewers out of business. The combination of the breweries "will foster collusion and enable the new Coors to act collusively with Anheuser-Busch and Miller to target and Heileman and other small breweries with reduced-cost and below-cost pric- ing campaigns to drive them out of business," the suit said. BOEING TALKS The Boeing Co. of Seattle, set to attempt to break the deadlock in its 1 4-day Machinist strike, abruptly broke off contract talks scheduled with its engineers, saying they're asking for "grossly excessive" pay raises. The Seattle Professional Engineering Employees Association, which represents 28,000 engineers and technical support workers at the company, wants pay raises of 19 percent In the first year and 8 percent in the second and third years of a three-year contract.

ALTERNATIVE FUELS The auto and oil industries, faced with government proposals to replace gasoline with alternative fuels, said they will Jointly conduct a scientific runoff to determine which fuel cuts air pollution most cheaply. Final results from the research and testing program are not expected before next July. TRADE TALKS U.S. Trade Representative Carla Hills said new economic talks with Japan should produce a plan for action, but no massive cut by next year in the U.S. trade deficit with Japan.

The two countries have agreed to make a final report next July on their talks to remove "structural impediment" barriers to trade between the United States and Japan. WORLD FORD STAKE Ford Motor Co. has raised its stake in British carmaker Jaguar PLC from 5 percent to 10.4 percent In a total purchase valued at between $190 million and $210 million. ECONOMIC TREATY Jacques Delors, president of the European Community's executive commission, called on the 12 member states to ratify a new treaty, for an economic and V- In his 22 years as an Indianapolis banker, Frank E. McKinney Jr.

became party to the state's biggest bank acquisition; witnessed a fight to build a new bank headquarters, which is only now nearing completion; and saw banking evolve into an industry where crossing state lines is common. McKinney announced Tuesday he is retiring as president of Banc One the Ohio firm that owns Bank One, Indiana-polls, the former American Fletcher National Bank that he Joined in 1967. That financial institution is now as different from the 1976 AFNB as the Bank One Tower is from Bank One, Indianapolis' existing headquarters facilities. McKinney joined AFNB as executive vice president, after spending three years at the First National Bank of Chicago. The Indianapolis bank was headed by his father, Frank E.

McKinney Sr. The younger McKinney became AFNB's president in 1972, its chairman in 1973 and chairman of American Fletcher the bank's parent company, in 1974. ASSOCIATED PRESS Traders on the floor of the New York Stock Exchange react with smiles at the close of Tuesday's trading session, which saw the Dow Jones industrial average drop 18.65 points. Dow Jones recovers after very shaky start venture in 1987 to help develop be called the MD-90. McDonnell Douglas will purchase turbofans from International Aero Engines, an international consortium.

Among the highlights of that AFNB began efforts to build a new headquarters in 1973. However, the bank was unable to buy the Kittle's Furniture Store at 128 North Pennsylvania Street as part of a new building site. James L. Kittle, who owned the store, was also an AFNB director. He didn't sell out until 1979.

The headquarters McKinney envisioned is now taking shape as Bank One Tower, the state's tallest office building. McKinney fired Larry J. Hannah as AFNB's vice chairman in January 1983. Hannah later pleaded guilty to misapplying bank funds and making false statements In bank records. Hannah was accused of concealing his personal financial Interests in a Florida condominium project which AFNB took control of through foreclosure.

McKinney agreed to sell American Fletcher Corp. to Banc One in May 1986. Banc One paid $552 million In stock, with the deal closing in January 1987. McKinney became No. 2 at Banc One Corp.

and head of the com- pany's Indiana banks. ELI LILLY AND CO. Third-quarter results 1989 1988 Revenues Net income Per share $1,045.1 $940.6 $212.4 $171.4 $0.73 $0.60 Nine-month results 1989 1988 Revenues $3,391.6 $3,027.4 Net income $714.2 $585.3 Per share $2.45 $2.04 In millions of dollars except per share Source: Lilly that clinical trials scientific tests to determine whether products are safe and effective were under way or scheduled to start for products to treat sexual problems, to prevent and to relieve migraine headaches, and to treat cancer, as well as new antibiotic products. Lilly also is testing Prozac's effectiveness in treating obsessive-compulsive behavior and smoking. Lilly's net income for the quarter was boosted by some one-time items.

Including a $12 million settlement, announced in July, of several pending lawsuits between Lilly's Hybritech Inc. unit and Abbott Laboratories Inc. concerning patent anrj trademark issues. shock, they may be kicking themselves in the pants." In any event, Newcomb said McDonnell Douglas' decision U.S. trade deficit Gap between U.S.

Imports and exports. In seasonally adjusted billions ot dollars. II ll WW billion) SOND JFMA MJ JA Deficits (millions) July Aug. Japan Canada W.Europe OPEC SOURCE: Census Bureau 1A Knlght-Ridder Tribune News billion from a revised July deficit of $8.24 billion. Commerce said the August trade shortfall between imports and exports was the largest imbalance in eight months and was 31 percent bigger than a revised July deficit of $8.24 billion.

cerns about already-high costs, have worked at improving supply while holding down cost. The report says problems of quality, turnover and pay for teachers and aides are intertwined. Ultimately, it says, these problems fall upon children, who feel the turmoil in which their adult supervisors labor. "Children attending lower-quality child-care centers and centers with more teacher turn over were less competent in lan guage and social develotfnent. thf ctuHv' nnthnrs av Lilly again posts record sales, profits Because ot the volatile nature of the market, Hoosier Investors will be able to contact the Indiana Securities Division to seek answers to questions an additional three hours on weekdays until the end of October, Indiana Secretary of State Joseph H.

Hogsett announced Tuesday. Callers can reach division employees from 7 a.m. until 6 p.m. and can leave messages on a recording machine at other times. The number is 1 -800-223-8791.

Markets were calmer than on Monday, when the Dow swung through a 150-point range. Trading was the heaviest since the week of the 1 987 crash. Most traders said the big trade deficit, while bad news, had relatively little effect on the market. The Commerce Depart- ment said the August deficit rose about 31 percent to $10.77 FROM STAFF AND WIRE REPORTS New York The stock market seesaw tipped downward again Tuesday as the Dow Jones industrial average lost about 19 points after briefly falling more than 60 points early in the day. Speculators and program traders yanked around a market still deeply shaken by Friday's 190-point plunge and Monday's 88-point recovery in the Dow Jones average of 30 blue-chip industrials.

Stocks held up fairly well in spite of continued uncertainty surrounding a proposed buyout of UAL Corp. and a government report showing a bigger-than- expected trade deficit in August. The average closed with a loss of 18.65 points at 2638.73 with 224.07 million shares traded on the New York Stock Exchange, scarcely more than half Monday volume. Poor wages KNIGHT-RIDDER NEWSPAPERS San Jose. Calif.

Poor wages have led to a tripling of staff turnover in the nation's child-care centers during the last decade hurting the quality of care so badly that most centers offer "barely adequate" services, according to a new study released Tuesday. Child care is already many parents' biggest concern, and the report, issued by the Oakland, Calif. -based Child Care Employee Project, ia not an encouraging look at cAters where By ERIC B. SCHOCH STAR STAFF WRITER Propelled by Prozac, Eli Lilly and Co. reported record third quarter sales and profits Tuesday.

Sales for the quarter ended Sept. 30 rose 1 1 percent to $1,045 billion, and net income rose 24 percent to $212.4 million, the Indianapolis-based pharmaceutical company said. Record sales of pharmaceutical products were led by Prozac, Lilly's successful new treatment for depression. Although it is in only its second year, analysts are projecting its sales will reach more than $300 million this year. Lilly also is seeking federal approval to market Prozac to treat obesity and bulimia.

Medical instrument sales once again were led by Lilly's Advanced Cardiovascular Systems Inc. unit, which makes balloon catheters, and Cardiac Pacemakers which makes pacemakers and implantable defibrillators. In a prepared statement, Lilly Chairman Richard D. Wood said that "worldwide research and development expenses grew significantly during the third quarter as a result of increased human clinical trial expenses associated with several new pharmaceutical compounds." Lilly told analysts last spring hurt child-care quality millions of children spend many hours of their formative years. Billed as the most comprehensive look at child-care centers since 1977, the report says low pay for care-givers an average of only $5.35 an hour last year is "fueling a rapidly increasing and damaging exodus of trained personnel from our nation's child-care centers." The study could prove controversial.

It recommends spending more on child care, which likely would mean higher costs for parents. Yet many advocates, reflecting paints' con.