The Courier-Journal from Louisville, Kentucky • Page 24

12 The Courier-Journal, Thursday morning, September 1, 1983 Stocks up 20.12 Story, this page Leading indicators signal slowdown in economy's growth almost a year, suggesting to analysts that the recovery is losing steam and may settle into a more sustainable rate of growth. Secretary of Commerce Malcolm Baldrige said in a statement: "To avoid upward pressures on prices and interest rates, it is better that growth in (the gross national product) slow" from the second quarter's annual rate of 9.2 percent. An annual rate reflects what the gross national product the broadest gauge of overall economic activity would be for a year if the quarterly rate were continued for nine more months. The second-quarter gain was unexpectedly brisk, although not uncommon after pulling out of a recession. July's rise in the index marked the 11th straight month of gains, which is the longest unbroken series of in creases since a 17-month period ending in July 1975.

But July's 0.3 percent pace was the lowest since August 1983, when the index declined 0.1 percent. The index, which is designed to predict monthly movement in overall economic activity, is made up of 12 statistical yardsticks that tend to go up or down in advance of the actual direction of the economy. By DAVID TREADWELL Tht Los Angolas Timet WASHINGTON The government's index of leading indicators, a gauge of the economy's future health, continued its upward march in July, marking the longest string of unbroken increases in 17 years, the Department of Commerce reported yesterday. But July's 0.3 percent gain in the index was the smallest increase in Lighting firm ending ballast manufacturing By JEAN PETERS Courior-Journal Business Wrlttr An uncorrectable defect in Thomas Industries electronic ballast line is forcing the company to discontinue the product and shut down operations involved in its manufacture. The company will issue a recall for all of the ballasts sold in the last eight months, company officials said yesterday.

The problem has been traced to a defective component provided by a third-party vendor, officials said. The shutdown of the line will result in after-tax losses, which are expected to be attributed to third quarter earnings, of about $2.45 million, or 35 cents per share. But the firm still expects a modest profit for the quarter. The company has spent three years trying to perfect the elecronic ballast since it first announced in 1980 it had made a major breakthrough in fluorescent lighting with the product. The ballast was expected to cut energy used in fluorescent lights by 30 percent with no loss in illumination.

Although the product line has never been profitable, it was the 1983 wC JzSSa cr Making the grade Bulldozers and other equipment had to be pipeline. The carbon dioxide will be pumped hauled up the Cherry Creek Canyon in Colo- into a Shell Oil Co. oil field in Texas in an rado to complete a 500-mile carbon-dioxide attempt to retrieve more petroleum. The Cumberland gets $20 million the mailing will begin about a week later. Depositors will be offered stock in The Cumberland first.

Then officers, directors, employees and residents of Kentucky and certain neighboring states will be able to buy shares. Afterward, Goldman, Sachs a New York stockbroker, and J. J. B. Hilliard, W.

L. Lyons of Louisville are expected to sell the remainder of the The Cumberland's 1.5 million shares. The stock will be priced from $10.50 to $14 a share, with the exact price to be set by an appraisal before the October meeting. If the conversion is approved and enough stock is sold, The Cumberland may be listed as an over-the-counter stock with the National Association of Securities Dealers, said By BEN Z. HERSHBERG Couritr-Journal Business Wrlttr The Cumberland savings and loan association has started its previously announced plan to sell $20 million worth of stock.

The sale was approved Tuesday by the Federal Home Loan Bank in Washington, D.C., and officials hope to win approval of it from a majority of their members by Oct. 4, when they've scheduled a special meeting. Like most Kentucky savings and loan associations, The Cumberland is a mutual institution owned by depositors and borrowers. But the sale of stock would raise additional capital in an inexpensive way. "Once we're converted to a publicly held (company) we'll be able to tap capital markets we are unable to tap at this time," said John C.

Ever permits, stock prices and the nation's money supply. Components pointing downward were business formation, contracts and orders for plant and equipment, and changes in prices for sensitive raw materials. One indicator, the rate at which vendors deliver orders to companies, was unchanged in July, while the component measuring changes in inventories was unavailable. Market takes biggest jump in six weeks, passes 1,200 Associated Pross NEW YORK Blue-chip and technology issues led the way as the stock market rolled up its sharpest gain In six weeks yesterday. The Dow Jones average of 30 industrials jumped 20.12 to 1,216.16, for its best showing since it rose 30.74 points on July 20.

The upsurge rescued August as a winning month for the Dow, leaving the average with a 16.94-point gain from the last trading day in July. Yesterday's volume on the New York Stock Exchange reached 80.80 million shares, against 62.37 million Tuesday. Analysts could find no ready explanation for investors' enthusiasm. Among the blue-chip industrials that make up the Dow, Alcoa gained 238 to 47 y8; General Electric, 1 to 51 General Motors, 1 to 70i4; and Allied 2 to 53. Leading gainers in the technology sector included Digital Equipment, up 44 at 10314; National Semiconductor, up 1 at Datapoint, up 2'2 at 22; Tymshare, up 1 at 23i2; Motorola, up yg at 1 30 14 and Honeywell, up 1 at 12054.

Diamond Shamrock, up 1 at 24, and Natomas, up 2 at 28, were the day's most active issues. Shareholders of the two companies approved their plan to merge. The daily tally on the Big Board showed more than two issues advancing for every one that declined, and the exchange's composite index added .92 to 94.89. Nationwide turnover in NYSE-list-ed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 93.46 million shares. Standard Poor's index of 400 industrials rose 2.18 to 185.58, and its 500-stock composite index was up 1.82 at 164.40.

The NASDAQ composite index for the over-the-counter market climbed 2.56 to 292.42. At the American Stock Exchange, the market value index closed at 230.14, up 2.37. Toledo firm will pay $10 million for WDRB A Toledo, Ohio, newspaper com pany has agreed to buy WDRB-TV, Channel 41 Louisville's independent station for $10 million. The agreement was signed in Louisville yesterday, but can't take affect until it has been approved by the Federal Communications Commission. Approval could come sometime after Jan.

1, according to John W. Harms, a spokesman for the new owner. The purchaser is The Toledo Blade which owns newspapers in Toledo and Pittsburgh, and also television stations and cable franchises in Ohio, Indiana, and Michigan. Harms said no major changes are planned for WDRB. He said Elmer Jaspan, who has been president and general manager of the station under the Cowles Media Minneapolis, will continue in that position.

Jaspan has been with the station since it opened in 1971. Cowles Chairman Otto A. Silha said his company, which bought WDRB in 1977, has decided to concentrate its resources elsewhere. The company sold its only other television station, in Wichita, last January. The Blade Co.

owns a CBS television affiliate in Lafayette, and an NBC affiliate in Lima, Ohio. Harms said WDRB is the company's first venture into independent television. The Blade Co. has two stockholders, brothers William and Paul Block Jr. Jane Bryant Quinn is on vacation.

Her column will resume Sept. 15 Seven of the 11 components rose in July, with the change in outstanding business and consumer credit contributing the greatest increase. The willingness to take on debt is viewed, in this case, as a sign of confidence in the economy. Other indicators on the plus side were the average work week, average weekly initial claims for state unemployment insurance, new orders for consumer goods, building Shall Oil Co. Photo under way In 1982 The Cumberland established a $1 million loss-reserve fund in expectation that several loans it had made would not be paid off.

That includes a loan for construction of the Yorkwood Condominium in eastern Jefferson County's Plain-view subdivision. The Cumberland took title to that project last spring. Since then it's advanced $4.6 milion to a partnership, including a Cumberland subsidiary, which wishes to complete the project. An additional $3 million could be made available for the development, according to documents The Cumberland will mail soon to possible investors. As of June 30, The Cumberland had $847.3 million in assets and $34.5 million in retained income.

ticker tape From Staff, Dow Jonts and AP Dispatches PIK value estimates Corn farmers in 28 states, including Kentucky and Indiana, will get about $5.7 billion worth of free corn this fall under the government's payment-in-kind program. The estimates are based on the current book value of corn on the U.S. market $3.36 per bushel. According to USDA's preliminary figures, Kentucky farmers will be 32 million bushels of free corn under PIK. At $3.36 per bushel, that would be worth $107.5 million.

Indiana farmers will get 150.3 million bushels worth $505 million. Value of houses rises The value of the typical single-family home built since 1970 climbed to $70,900 in 1981, the government reported yesterday. The median value of homes built in the last 13 years went up $3,600 from 1980 to 1981, according to a joint report from the Census Bureau and the Department of Housing and Urban Development. Those newer houses constitute about one-fourth of all homes in the country. Savings firms merge Three Indiana savings and loan associations were given $12.8 million by federal regulators yesterday to help merge their operations in the 23rd assisted combination so far this year.

The Federal Home Loan Bank Board said it approved the merger of First Federal Savings and Loan Association of East Chicago, and Gary Federal Savings and Loan Association in Gary, into Citizens Federal Savings and Loan Association in Hammond, Ind. Caterpillar shutdown Officials of Caterpillar Tractor Co. Ltd. said yesterday it is closing its manufacturing plant near Newcastle, England, to consolidate manufacturing operations in the United Kingdom. Doug Crew, spokesman for the Peoria, 111., firm, said the plant, which employs 960 people and was opened in 1956, makes components for Caterpillar machinery.

Manufacture of those parts will be transferred to the Caterpillar plant at Glasgow, Scotland. "improvement" that was the final blow, said John Muhlbach, senior vice president of Thomas Industries. "We realized this had created a major defect," Muhlbach said of the defective part He would not elaborate on the problems with the component, because of potential legal action the company may take. "The question was, 'Where do we go from he said. "Do you end up with a viable product anymore?" Assembly of the product was done at the firm's Sparta, plant.

An electronics division headquarters office at Garland, Texas, will also be closed. In total, about 50 jobs at both locations are expected to be lost. The ballast line represented about 1 percent of total company sales so far in 1983. Muhlbach said that seasonal improvements and the recovering economy will help keep Thomas Industries slightly profitable in the third quarter. For the six months ending June 30, the company had net income of $4.5 million, or 62 cents a share.

For the second quarter, earnings were $2.3 million, or 33 cents a share. ett, The Cumberland's chairman and chief executive. In addition, the ability to issue stock "will help us attract well-qualified (employees) who want to be part-owners. And it will help us buy other companies and not pay cash." Stock-option plans for executives and acquisitions with company stock must await the October vote and subsequent action by directors and shareholders. With about 90,000 depositors and borrowers across Kentucky, getting more than 50 percent approval of plans to become a publicly held firm may take some effort.

The Cumberland Friday will mail out requests to its members for a vote on the stock-conversion plan. Follow-up calls to major depositors or borrowers who don't respond to The milk-marketing law, which kept grocers from selling milk below cost, was held unconstitutional two weeks ago in Fayette Circuit Court. The state Milk-Marketing and An-timonopoly Commission yesterday asked the Court of Appeals to grant an ex parte motion to restore the law and keep it on the books while the case is being appealed. An ex parte motion is made without notice to the other side, in this case Kroger, which had challenged the constitutionality of the milk law. The motion, asking for an immedi On August 11, Semonin announced plans to buy back smaller holdings of stock.

The stock will be held by Paul Semonin Associates, a new firm owned by major shareholders and officers of the real-estate company. Major shareholders and company insiders have transferred their holdings to the new firm, giving it control of Semonin. Tomorrow other shareholders will be asked to sell their stock to the new company, a formality because a large majority of voting stock will be cast for the plan. After the stock sale Semonin will be merged into the new company, leav Cleve Benedict, an Energy Department spokesman, argued that existing controls depress production of the more cheaply produced "old gas" and cause "new gas" prices to be artificially high. Old gas is natural gas produced before 1978 that will always be regulated under existing law, while new gas is fuel produced from 1978 on that eventually will be priced by the market.

According to Benedict, pipelines that have access to more old gas are able to bid up the price of new gas Court of Appeals won't reinstate milk law By PHIL NORMAN Courior-Journal Farm Editor The Kentucky Court of Appeals yesterday turned down an emergency request to put the state's milk-marketing law back on the books. For the next few days at least, grocers across the state will remain free to set their own milk prices. Some Kentuckians yesterday were buying milk at prices that would be illegally low if the law were still in effect. Some Kroger stores in Northern Kentucky have reduced prices by as much as 51 cents a gallon in weekly "specials," a spokesman for the chain said yesterday. stock sale Ken Parrot, the institution's chief public relations official.

No depositor or borrower may purchase more than 5 percent of the firm's stock. To date, the company's officers and directors have said they would buy 2 percent of the stock, Everett said. The Cumberland lost $6.1 million on operations in the first half of 1983, compared with an $8.6 million operating loss in the same part of 1982. Tax benefits reduced the loss to $4.1 million in 1983 and $6.1 million in the first half of 1982. In all of 1982, the company lost $18.9 million on operations, compared with an $8.9 million operating loss in 1981.

After tax benefits and securities transactions the 1982 loss was $13.7 million and the 1981 loss $7.7 million. harmed by milk-price "wars," which could break out in the absence of the law. In addition, the commission contends that it has been left without the ability to support itself through fees from milk processors and distributors. The fees amount to more than $130,000 a year, according to Commission Director Jim Claycomb. The commission has asked the Court of Appeals to reverse the circuit-court decision overturning the milk law.

Kroger is asking that the case be sent directly to the Kentucky Supreme Court. Now that the economy's picking up, they're squeezing me out Why didn't they have a merger when the economy was bad?" The suit requests a delay in putting the transaction into effect. It also asks circuit court to consider the lawsuit a class-action, with Semonin's roughly 320 minority shareholders participants in the suit. Judge Charles Anderson yesterday turned down the request for a temporary restraining order that would prevent the stock purchase. However, he set a hearing for Sept.

19 for additional consideration of the case. Claims made in filing a lawsuit give only one side of the case. portion of that low priced gas," Royer said. "To throw that gas open to the highest bidder is likely to have detrimental effect at least in the short term to our customers." But Royer said will not take a specific position on decontrol legislation until it is clearer what compromises will be proposed. So the session remained a showcase for the Reagan administration's position on decontrol, one of nearly a dozen the association has held for groups of its members in six states; Stockholder tries to block Semonin merger ate stay of the order overturning the law, was turned down by John P.

Hayes, chief judge of the Court of Appeals. John B. Baughman, an attorney for the milk-marketing commission, said he will file a regular motion to keep the milk law in force until the constitutional issue is settled. He said that motion will require a hearing, meaning that the milk law will be off of the books at least a few more days. Baughman said the commission requested an immediate order out of fear that the milk industry would be ing Semonin's major shareholders and officers as the real-estate company's owners.

Yeager's lawsuit also challenges the value placed on Semonin stock. Estimates of the stock's value by the J. J. B. Hilliard, W.

L. Lyons brokerage firm did not include consideration of Semonin's value as an operating business, the value of its assets or its earnings possibilities, the lawsuit says. In an interview, however, Yeager said, "The money is not what I'm concerned about When I purchased the stock, I thought maybe sometime in the future it would be worth something. Then the economy went down. because they can average costs of the mix of the two to their customers.

As a result, overall gas prices are higher than they would be if all gas were priced competitively, he maintained. Total decontrol of natural gas would result in a flattening of prices nationwide, he predicted. But after the meeting, Louisville Gas Electric Co. president Robert L. Royer, said the existing disparity helps local consumers.

"From a purely local standpoint, we have access to a disparate pro By BEN Z. HERSHBERG Courior-Journal Business Writer Officers, directors and major shareholders of the Paul Semonin Co. are trying to squeeze smaller stockholders out of the business when it's finally becoming profitable, according to a lawsuit filed Tuesday in Jefferson Circuit Court. The lawsuit, filed by James L. Yeager, asks for a delay in plans by directors and officers of Louisville's biggest real-estate company to buy back smaller holdings of company stock for $1.20 a share.

Semonin sold 125,000 shares of stock to the public in 1972 at $4 a share. U.S., manufacturers urge end of gas controls By JEAN PETERS Courior-Journal Business Writer Louisville area manufacturers were urged yesterday to push for action by the House of Representatives to end controls on natural gas, but local utility officials warned that a hasty decision may mean higher rates. About 60 people representing several dozen industries attended a briefing sponsored by the National Association of Manufacturers and the U.S. Department of Energy on the status of decontrol legislation. ean.afca.