The Des Moines Register from Des Moines, Iowa • Page 38

-i Dow Joocs lad-ttriab closed Wednesday at 1,20733 DOUtl 0.03 in nm SS a ft fc esoaer? LrmiirLi 4 r.f tv Fi lli til 14 4 i -J LiHi "C- i b1 17 9 Ferd Meter Ce. Chalrmaa Philip Caldwell, left, and hands after sigaiag a new 3-year cw tract The pact was United Ante Workers President Owen Bieber shake ratified by mJm members earlier tads week. Ford, AW sign new GENEVA. SWITZERLAND AP) -OPEC pledged Wednesday to create a temporary world oil shortage this winter in a bid to reverse a downward trend in prices. Analysts questioned, however, whether all cartel members would resist the temptation to pomp more oil when demand picks up during the heating season.

Tor now it's a paper agreement because it cant be tested" until the oil producers are faced with turning away their oil buyers, said Walter Levy, an oil consultant in New York. The 13 members of the Organization of Petroleum Exporting Coun-' tries agreed on the third day of an emergency meeting to cut their production ceiling by nearly 9 percent starting Thursday. The cartel said in a final communique that cutting overall daily production from 17.3 million barrels to 16 million barrels would be shared by 11 of the member countries. Nigeria and Iraq were deemed to be hardship cases and thus were exempted from the reduction. Ahmed Zaki Yamani, the Saudi oil minister, said OPEC projected that demand for its oil during November and December would jump to nearly 19 million barrels a day because of the usual increase in heating oil requirements during those months.

By restricting its output to 16 million barrels a day, OPEC will create a temporary shortage in the market and drive up prices, he said. "Our decision today is to create the necessary shock in order to increase the price faster," Yamani told a news conference after the oil ministers completed their talks in a Geneva hotel. "We think the action will be felt in the market the minute the oil companies try to find a barrel of oil and are not able to find it easily," he said. "We now are in a position to fight back and to put the price back up where we want it to be," he added. Yamani stressed, however, that the cartel did not want to drive prices higher than the official OPEC level of $29 a barrel.

He said that if prices on the open market moved "much" above OPEC official level, the cartel would meet again to loosen its grip on supplies and temper the price rise. "We are not interested in driving prices to uncontrollable levels," said Ali Khalifa Al-Sabah, the oil minister of Kuwait Prices of crude oil for future deliv ery rose Wednesday on the New York Mercantile Exchange, with the December contract gaining 24 cents barrel, to $28.46, following a 19-ceot decline Tuesday. But futures dealers said the price gain reflected more the "short covering" by some traders rather than OPECi action, which the market had already taken into account Short covering is when traders buy contracts they earlier had sold. In such a transaction, a dealer sells a contract waits for its price to fall, "covers" himself by buying the contract back and pockets the price difference. OPEC began devising this plan after Norway and Britain, which art not members of OPEC, cut their oil prices in reaction to a slump in the open-market price.

OPEC member Nigeria then cut its price without OPEC approval, and the emergency meeting was called. Nigeria, depending on oil sales for more than 90 percent of its revenue, told the Geneva meeting that it would not immediately rescind its price cut even though it gave the West African nation a substantial price advantage over other OPEC members. Tarn David-West Nigeria's oil minister, said prior to the start of the talks that it would be "suicidal" for Nigeria to cut its oil production. The OPEC agreement Wednesday is designed to drive up the price of oil on toe open market where oil not under contract is sold to the highest bidder and thereby allow Nigeria to restore its price without risking a loss of customers. Some analysts said that while the agreement was likely to carry OPEC through the winter without a major threat of a price collapse, it would face another crisis next spring when oil demand slackened.

"They're going to have problems next spring, but this agreement, anyway, might ease the pressure a little bit" said Phil Prince, chief economist for the energy group at Royal Bank of Canada in Calgary, Alberta. Under terms of the agreement, Saudi Arabia will accept a cut of 647,000 barrels a day in its self-imposed production quota of 5 million. Because the Saudis now are producing only 4 million barrels a day, the agreement will not mean a cut in their actual production, Yamani acknowledged. But other countries will actually lose sales immediately. pany.

Up to $1 billion was set aside for the program by GM and up to $280 million by Ford. The Ford contract, unlike the one at GM, also contains a three-year ban on plant closings. "We have just completed the second major negotiation in which we have had neither a strike nor a strike target date set." Caldwell declared. But while Caldwell spoke, the UAW was announcing in Toronto a strike target date against Ford Nov. 9 as the company and union bargain for a contract covering 14,000 workers.

A strike against Ford in Canada is considered unlikely at this point however, given Monday's overwhelming UAW ratification of a Canadian GM pact and Ford's willingness to settle under a general GM pattern in the United States. Timber bailout generates tales WASHINGTON, One of the things meat sorely mined here when Congress learn the city is our steady diet of fox-iihtbe-chicken-coop stories. While Coacresi is in session its mem-bers reguUrly warn that letting some official or other handle a problem is like letting the fox into the coop. Usually, the fox is of a different political persuasion than the congressman, whose prof essed aim in life is the well-being of the chickens. And since there are more chickens than foxes, there's some political benefit, too.

Assistant Agriculture Secretary John Crowell, who played a role in a timber industry bailout bill, has frequently borne the brunt of ox-uvcoop attacks. Crowell formerly was general counsel of Louisiana Pacific a large timber firm. As part of his USDA duties, Crowell supervises the Forest Service, from which Louisiana Pacific had bought a tot of timber. After the housing market sagged in 1889, timber companies were left holding unprofitable contracts to buy logs from the Forest Service. The companies asked the administration and Congress for legislation to allow them to "buy out" their contracts at a fraction of the price they had agreed te pay for the timber.

At stake was several billions of dollars worth of log! Early in 1983, northwest area members of Congress pushed a bill to allow the companies to cancel their federal contracts, at a cost to the taxpayers of more than 82 billion. The Congressional Research Service reported that the SO largest buyers of federal timber would get two-thirds of the savings. there are reports of a fractious Cabinet Council meeting on the issue, with Crowell arguing the industry's position, and White House Budget Director David Stockman contending the cost was too high. There also are reports that former White House chief economist Martin Feldstein rebuked Crowell for backing the industry in private conversations with congressmen. And there are reports, too, that Agriculture Secretary John Block sided with Stockman and Feldstein.

There was strong opposition to the bill from Senator Howard Metzenbaum Ohio), who objected that it provided too much relief for big timber firms. Metsenbaum said he would back a bill geared to small companies, butthat measure died in 1983 when, according to an aide to the senator, "the big companies torpedoed it." Metzenbaum was a foe to be reckoned with because he previously had fili DEARBORN. MICH. (AP) Ford Motor Co. and the United Auto Workers onion signed a new three-year labor contract Wednesday patterned after the UAW agreement signed two weeks ago with General Motors Corp.

Philip Caldwell, who retires Feb. 1 as Ford chairman, called the second contract negotiated under his 4 -year reign an example of "the new labor relations" in America. The three-year GM and Ford contracts, covering 350,000 and 115,000 American workers, provide income protection on a scale unprecedented in U.S. industry. Covered are workers with one year or more seniority who are displaced by automation, negotiated productivity gains or the subcontracting of work outside the com wr AP PHOTO East Coast trio buys (GDR-TV for $9 million By DIANE GRAHAM The owners of Iowa's first independent television station, KCBR-TV of Des Moines, said Wednesday that the station is being sold for about $9 million to three East Coast investors.

Raymond Gazzo, one of the partners in Independence Broadcasting Corp. of Des Moines, confirmed Wednesday that his company plans to sell the station to Philip Lombardo of Bronxville, N.Y., and Joel Hartstone and Barry Dickstein of Hartford, Conn. Lombardo, who will be the licensee, was the president and chairman of Corinthian Broadcasting Co. before he left in September 1982 to begin acquiring his own stations. Citadel Communications, the company Lombardo formed in partnership with Hartstone and Dickstein, now owns WVNY, an ABC affiliate in Burlington, Vt, and WUTV, an independent station in Buffalo, N.Y.

The KCBR sale is subject to the approval of the Federal Communications Commission. The deal to sell channel 17 apparently developed quickly, over the last 30 days. Dickstein said his group was approached by a broadcasting broker from the Chicago office of Blackburn VT contract Intcrllortli says third-quarter earnings higher By JERRY PERKINS RNbtar Buttons WrtHr InterNorth Inc. of Omaha reported earnings in the third quarter of $35.6 million, or 52 cents a share, compared with $30.1 million, or 49 cents a share, for the same period a year ago. Revenue for the most recent quarter was $1.74 billion, compared with $946.1 million a year ago.

InterNorth is the parent company of Northern Natural Gas Co. of Omaha, which provides about two-thirds of the natural gas used by consumers in Iowa. It also owns Peoples Natural Gas Co. of Council Bluffs, a retail gas distribution company. InterNorth's nine-month earnings totaled $219.6 million, or $4.12 a share, compared with $164.2 million, or $3.50 a share, for the same nine months a year earlier.

Revenue in the most recent nine months was $4.5 billion compared with $3.3 billion for the first nine months of 1983. The most recent quarterly and nine-month earnings include a $6.3 million, or 14 cents a share, writeoff of InterNorth's investment in the Energy Transportation Systems Inc. (ETSI) coal-slurry pipeline project, which was terminated July 31. Sam F. Segnar, chairman and chief executive officer of InterNorth, said a sizable earnings gain was reported by InterNorth's Belco Petroleum subsidiary, which was acquired by Inter-North last year.

Northern Natural Gas listed quarterly operating earnings of $9.7 million, compared with a loss of $29,000 in the third quarter a year ago. Peoples reported operating earnings of $828,000, compared with a loss of $2.9 million in the same period a year earlier. Segnar said Northern's improved earnings were caused by an increase in gas volumes transported for others and reduced operating expenses. Peoples' improvement came from increased industrial gas sales, Segnar said. "Pressure on profitability was exerted on InterNorth's other business lines during the third quarter," Segnar said.

"These included lower product prices for both Northern Liquid Fuels and Northern Petrochemical Companies." Northern Liquid Fuels' operating earnings were $1.7 million in the latest third quarter, compared with operating earnings of $10.9 million in the year-earlier third quarter. Northern Petrochemicals' operating earnings were $7.3 million, compared with $6 million in the previous year's third quarter. ex' vise6 Home sales, construction make big recovery in DM Des Moines, IA. Enteriatnmmti For Etmyom It Co. But Gazzo said things actually began moving when a friend and fellow broadcasting executive from Lansing, told Gazzo he knew of someone interested in buying the station.

Blackburn learned from the Michigan friend that the Des Moines group was considering selling the station, and contacted Gazzo's group about brokering the sale. Gazzo said he and his partners sold the year-and-a-half old station because "it seemed to us a very attractive offer. "On the one hand, it was an exciting experience putting on the first independent TV station in Iowa. What this really means is we're all going to get a good return on our investment," said Gazzo, who estimated that Independence Broadcasting spent about 82.8 KCBR Please turn to Page 10S ber came in March, when 502 units were sold. Annual sales through October totaled 4,640, up 6.6 percent from the 4,353 units sold during the first 10 months of 1983.

Sales volume reached $29.5 million in October, up almost 33 percent from 322.2 million in October 1983 and slightly higher than September's $29.1 million. The average unit price was $56,709 compared with $62,645 a year earlier and $59,344 in September. John Lundstrom, president of the Greater Des Moines Board of Realtors, said October sales initially were boosted by Housing Finance Authority money, which was being offered to eligible buyers at a fixed rate of just under 11 percent for 30 years. "Then about 10 days ago we had a little downtick in interest rates, and I think that helped. It doesn't take a lot" he said Veterans Administration loans HOUSING Please turn to Page 7S 1 bustered timber bailout legislation to death.

'Metzenbaum has this to say about Crowell's role: "It was obviously im proper for him not to recuse himself on the decision on timber industry relief since his former employer stood to gain millions of dollars in benefits. "His failure to disqualify himself suggests either a total lack of integrity or a great deal of insensitivity. It also goes without saying that Crowell's major interest was to help and protect the major giants in the forest products industry rather than the truly needy in the industry and the taxpayer Crowell is not your ordinary bureaucratic shrinking violet. He can dish it out "He's got a hell of a nerve," Crowell shot back, referring to Metzenbaum and noting that the senator had gotten a 1250,000 real estate finder's fee for "making a couple of phone calls" involving the sale of a hotel. Metzen baum returned the fee after the deal was publicized.

Crowell said he actually opposed the timber industry bill on grounds the administration's plan to simply extend the contracts would have provided relief. Crowell said he also doesn't believe there would have been widespread failures in the industry because of the firms' government contracts. And he emphasized that he's sold all his industry stock and placed his assets in a blind trust In September, the Senate approved a compromise bill backers said would provide more relief to small and medium-sized firms than to big companies. The large firms accepted a sliding scale that ties benefits to how much timber a company has contracted to buy and whether the firm is financially healthy. The Reagan administration went ilong, observers say, because of fear thai some key northwest Republicans, Including Oregon's Mark Hatfield, might suffer politically if they couldn't deliver on the issue.

By GENE ERB Housing sales in the Des Moines area hit their highest level of the year in October, topping 500 for the second time in ,1984 and outpacing October 1983 unit sales by a healthy 47 percent The area's residential construction industry has experienced a strong comeback, too, with the number of building permits climbing 72 percent to 1,190 through September from 690 issued during the first nine months of 1983. Much of the increase was due to a boom in multifamily construction activity, but construction of single-family homes was up substantially, too. Officials said mortgage money from the Iowa Housing Finance Authority and a recent decline in mortgage interest rates combined to spark the year's best sales performance. Unit sales hit 521 in October, which was 167 more than the 354 sold a year earlier and 30 more than the 491 sold in September. The year's best sales prior to Octo World Trade Center A hot-air balloon painted to look like a globe stood tethered in a parking lot as officials in St Paul, broke ground Wednesday for a $100 million World Trade Center in downtown St Paul.

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