Arizona Republic from Phoenix, Arizona • Page 28

I The Arizona Republic SECTION Business FRIDAY SEPTEMBER 13, 1991 News Briefs Tuicsom Electric9s chief resigns 1 of 3 directors to quit under fire force it to reorganize under Chapter 1 1 of the U.S. Bankruptcy Code. The company is trying to negotiate an out-of-court reorganization with the petitioners and about 150 other creditors. Schaefer said Thursday that it would have been "irresponsible" for the three directors to stay because that could have jeopardized treatment of a Tucson Electric rate-increase request pending before the Arizona Corporation Commission. "The rate case is crucial to TEP's survival," he said.

The commission's staff has proposed a net rate increase of 7.5 percent this year. Commission members Marcia Weeks and Renz Jennings said Thursday that they welcomed the resignations because the three are associated with the utility's troubled past. Weeks said the resignations "will build more confidence in TEP, both from the commission and from the Tucson community." Weeks said concern about Schaefer's and See TUCSOM OICTRIC page F6 Dow climbs 20.80 The Dow Jones average of 30 industrials climbed 20.80 points, to 3,007.83. Further details appear in chart at bottom of page. Story on Page F3.

Amex to trade stocks of small firms The American Stock Exchange announced plans Thursday to trade the stocks of small companies in an attempt to compete with the nation's electronic over-the-counter market. The Amex said it will relax listing standards to allow small or emerging companies to be traded on its exchange floor, rather than in the National Association of Securities Dealers' Automated Quotation market. The proposal sets up a potential battle between the Amex and the NASD and appears to be driven by the Amex's desire to drum up new sources of income in an increasingly competitive marketplace. By Guy Webster and Dee Ralles The Arizona Republic TUCSON Tucson Electric Power chairman and two other directors resigned Thursday, bowing to state regulators' requests for their departure. John P.

Schaefer, chairman of the debt-riddled utility, and directors Gary Munsinger and Thomas C. Weir submitted resignations to Charles E. Bayless, chief executive officer. Bayless said a search has begun for replacement directors to work with the company's six remaining active directors. A company spokesman said a new chairman probably will not be named before the board's next scheduled meeting, Sept.

24. TEP faces an Oct. 1 deadline to respond in court to a petition by six creditors to Money supply shrinks MONEY SUPPLY All three measures of the nation's money supply fell in the week that ended Sept. 2, the Federal Reserve Board reported Thursday. The decline raised the possibility that the Fed, which monitors money supply as an indicator of economic health, might nudge interest rates lower to boost the economy.

The Fed said the measure known as M3 fell to S4.139 trillion x-v 4 Circle new president and chief executive, John Antioco, will handle the Phoenix firm's day-to-day operations when he begins work Sept. 23. He replaces Robert Dearth, who resigned. from $4.1498 trillion the previous week, M2 fell to $3.3875 trillion from $3.3972 trillion, and Ml fell to $867.1 billion from $869.7 billion. Valley homes on RTC auction block The federal Resolution Trust Corp.

will auction some of the better homes in its Phoenix-area inventory on Oct. 5. Estimated values for the 46 homes selected for the sale range from $80,000 to $380,000. The properties can be viewed now, and a descriptive brochure will be available after Sept. 19.

"How to buy" seminars for potential buyers and brokers will be held Monday and Sept. 26 at 7:30 p.m. Both the auction and the seminars will be in the Phoenix Civic Plaza. Seminar reservations and additional information are available by calling 1-800-858-5700. Money funds rise, yields mixed Assets of the nation's 562 money-market mutual funds rose $6.25 billion, to $464.87 billion, this week, the Investment Company Institute said Thursday.

At the same time, the seven-day average yield on the funds was 5.26 percent, unchanged from the previous week, while the 30-day yield fell to 5.30 percent from 5.34 percent, said Donoghue's Money Fund Report. The average maturity of the portfolios held by money funds was 59 days, unchanged from the previous week, Donoghue's said. RTC in need of money, panel told By Dave Skldmore The Associated Press WASHINGTON America's savings and loan bailout will run out of money by the end of October, the Bush administration said Thursday, but some lawmakers are balking at doubling the taxpayer cost of the program to $160 billion. Deputy Treasury Secretary John Robson and L. William Seidman, chairman of the Federal Deposit Insurance told the House Banking subcommittee on financial institutions that Congress soon must appropriate more money for the bailout agency, the Resolution Trust Corp.

"If loss funds run out and the RTC is unable to close money-losing thrifts and pay off their depositors, the costs of the cleanup will simply grow, and we would risk creating runs," Robson said. Seidman said the RTC, which he supervises, has spent $67 billion of $80 billion appropriated since the agency was established in August 1989. Through August of this year, it had seized 646 failed closing or rescuing 511 of them, he said. The agency plans 85 rescues this month and next at a cost of $12 billion to $13 billion. Robson said an additional $80 billion is needed to finish the cleanup program in two years.

Seidman said he sees "no reason to believe that this estimate is too low" and said the See RTC, page F6 3jiH i 1 Victoria BucknerThe Arizona Republic Ex-rival gets Circle helm 7-Eleven veteran brings savvy to job, creditors praise move Kodak to sell CD system Fuji Photo Film Co. has applied for a license to use rival Eastman Kodak Photo CD technology in Japanese photo labs, Kodak officials said. Spokesman Paul Allen said Thursday that Kodak plans to issue Fuji a "To get a person of Antioco's experience is a very positive develop ment for Circle Chairman Bart Brown said. Brown said 100 resumes were reviewed and 20 convenience-store executives were interviewed. Antioco replaces Robert Dearth, who resigned under pressure in June after failing to meet financial projections he had given to creditor groups.

The Phoenix- See 7-ELEVEN, page F6 Antioco, who left Southland last year as senior vice president of store operations, most recently was chief operating officer of Pearle Vision in Dallas. "He has grown up in the business," said William A. Franke, one of three Circle directors on the search committee. "His strong convenience-store background, with specific operating and marketing experience those are the two most important qualities he brings," Franke said. "Plus, he's young, energetic and has strong leadership qualities." By Barbara Deters The Arizona Republic Circle Corp.

named a president Thursday who knows the convenience-store chain's competition well. He helped run it. John Antioco, 41, who spent 20 years at the Southland parent of 7-Eleven stores, was hired as president and chief operating officer of Circle Corp. He starts Sept. 23 and will handle the company's day-to-day operations.

license for the technology, which allows the transfer of pictures from film to compact discs. Kodak, which plans to start selling the system next U.S. firms told of 'huge' Mexico potential Melinda Carrell, an aide to Rep. Jim Kolbe, R-Tucson, said there are opportunities for U.S. jobs and services in such areas as architecture and environmental data.

Border stations will have to be expanded and new roads and railroads may be needed, she said. Carrell advised firms considering expanding into Mexico to do as much homework as if they were planning to expand in the United States: Find out about the cities, what products and services their people want, and who are the competitors. "Many people are already developing joint ventures," she said. "There's a tremendous market share to be developed." Arizona exported $832 million worth of goods to Mexico in 1990, Carrell said. If Congress approved an accord before the 1992 elections, it would take effect in January 1993 at the earliest, he said.

Montgomery said the pact is expected to create a net gain in jobs for the United States as the disposable income of Mexicans rises and they buy more U.S. goods. Talarico agreed, citing the case of a firm in Hermosillo, Sonora, that underwent seven unsuccessful attempts to repair its leaky roof, and finally hired a Phoenix firm to install a new one for $200,000. "There is a tremendous opportunity to increase U.S. jobs, to provide services and products to Mexico," he said.

"The Mexicans have capital, but they don't have technology and management at the same level as we do." summer, sata other pnotograpnic companies also are interested in using the technology. Oil price declines The October futures price for light, sweet crude, the world bench-mark crude oil, fell 11 cents a barrel, to $21.53, on the New York Mercantile Exchange. Financial markets The dollar fell Thursday, ending in New York at 134.08 yen, down from 134.65 Wednesday; and at 1.6845 marks, down from 1.6875. At the New York Commodity Exchange, gold for current delivery was quoted at $344.30 a troy ounce, off $1.10, while silver closed at $3,952 a troy ounce, up a penny. The federal funds market rate, the interest rate on overnight interbank loans, ended Thursday at 5.50 percent, up from 5.44 percent.

At a glance Intel Corp. asked a federal judge in Texas to prevent upstart competitor Cyrix Corp. from selling its speedy math-computer chips because they allegedly use some of Intel's patented technology. The Agriculture Department estimated the 1991 corn-crop harvest at 7.3 billion bushels, down 8 percent from last year. First of America Corp.

of Kalamazoo, said it will merge with Security Bancorp Inc. of suburban Detroit in a $552 million stock swap that will create a banking company with about $19 billion in assets. Colgate-Palmolive Inc. will eliminate 2,000 jobs and close or modify 25 of its 91 factories worldwide in an effort to continue double-digit profit growth, the consumer products giant said. Compiled from reports by The Arizona Republic, The Associated Press and Knight-Ridder.

agricultural family of Sonora, buys products from 1,200 U.S. companies and has provided $50 million in goods to Mexico since starting with a load of Amana refrigerators three years ago, Talarico said. Sales opportunities abound, he said. For example, Talarico said, while U.S. households have an average of 3.2 televisions, fewer than 20 percent of Mexican households have even one.

Over time, the proposed agreement would do away with most barriers to U.S.-Mexican trade, especially tariffs. Mexico's tariffs are 2.5 times higher than U.S. tariffs, said Frederick Montgomery, private-sector coordinator for the Office of the U.S. Trade Representative in Washington, D.C. By Betty Beard The Arizona Republic FLAGSTAFF A possible free-trade agreement with Mexico is more than a year away, but smart U.S.

companies won't wait to do business in Mexico, several speakers said Thursday at the Governor's Rural Development Conference. "Mexicans have a huge appetite for American products," said Luigi Talarico, president of MH of Arizona a Tempe trading company that serves as buyer for outlets in Mexico. "It's (Mexico) not the same environment as it was two or three years ago. It's changing dramatically." MH of Arizona, a U.S. subsidiary established by the Mazon retailing and Intimidators beat up on green negotiators THE MARKETS Trading activity for Thursday.

Dow Jones industrial average Th Th JAYM. KAPLAN Special for The Arizona Republic This was my first exposure to negotiation by intimidation. This owner never intended to be fair or to compromise. He saw in me a young and relatively inexperienced negotiator whom he could beat up on. He was right, but fortunately I was backed up by an objective team that prevented me from making a tragic mistake.

Oddly enough, I met the same man in a tennis tournament in Arizona several years later. It came as no surprise to me that his behavior on the tennis court was the same as it had been in his office. He swaggered, he stared, he growled. I beat him anyway. You see, it was easy for me to ignore this kind of behavior on a tennis court.

I hadn't been expecting it, however, when the player was wearing a suit and sitting behind a mahogany desk. Negotiating tip: People who scream at you in a negotiation are seldom truly angry with you. Their anger is a ploy. Ask them to outline how they'd like to structure the deal, and get back to them later. began to feel worse and worse, like a rank beginner.

I also began to fear that as soon as I left the office, this man really would call everyone in town and tell them what an imbecile I was and that our company made flaky offers. Wanting to placate him, I asked him what kind of an offer he'd like to see. As gruff as ever, he growled out a price that was nearly 25 percent higher than my first offer. Beaten into uncertainty, I agreed to his demands and signed a letter of intent. Calm assessment of price When our management team later did its due diligence on the property, it came back with a strong negative recommendation.

We never did buy that complex. The price I had agreed to was just too high, the team said, and in a more peaceful setting I had to agree. When I called the owner to tell him we would not be buying his property, he snorted with great disgust that he should have expected this kind of behavior from a company such as ours and hung up on me. tiently, "Just give me a price. If I like what I hear, we can get around to the rest of the deal later." Reluctantly, I went against all my better negotiating instincts and gave him my price.

'You're wasting my Immediately, the owner shouted, "You're wasting my time! If that's the best you can do, this meeting is over. Is this the way you and your lousy company do business? You won't find anyone in this town to do business with that way." This meeting wasn't going very well. I began to doubt myself. Had I really missed the mark that much? The first thing I did was apologize to the owner for misunderstanding the property's value. Then I explained how our company did business, how large and successful we were and what nice people worked there.

I did everything but beg him to give me another chance. I was wasting my time. I just hadn't seen through his game yet. The owner continued to be abusive. In the course of this shakedown, I Several years ago, after searching for several months, I found a property in Massachusetts that I wanted to buy.

I hopped a plane to go meet with the seller in his office in Boston. From extensive preliminary research, I knew exactly the price I wanted to offer, and I had a good feeling where the deal would end up. I anticipated a smooth negotiation. I was wrong. No sooner had I sat down than the owner jumped all over me.

"You know," he said, "I had one of you California syndicators here in my office a couple of weeks ago, and he made a real, dumb offer on my property, so I threw him out. I hope you're not going to insult my intelligence like he did. So tell me, what do you have in mind?" This was a pretty aggressive opening salvo. I had planned to get all of the important issues resolved before I even mentioned price, but this owner wasn't about to let me run The show my way. I sat quietly, contemplating my response.

"Look, kid," he demanded impa NYSE Composite volume 202,524,150 Issues traded 2,091 Advanced 950 Declined 604 Unchanged 537 New highs 68 New lows lO 3,100 3,050 3.000 2,950 2,900 2,850 2,800 2,750 2.700 3,007.831 I 2080 I I fgn I LOW It 13 a is Sept. Amex Comp. NYSE 2.25 to 212.42 I LJ36622 387.34 The Arizona Republic Elf.