St. Louis Post-Dispatch from St. Louis, Missouri • Page 31

business 7C ST.LDUIS POST-DISPATCH Sept. 30, 19C6 James Flanigan Business Journal, St. Louis Magazine Sold Talks for the purchase began with Vittert about a year ago, Russell said, and have continued off and on. "Mark and I have talked over the years about many things," he said. "I approached him about a year ago.

Philosophically, Mark and I are very close, so that wasn't the problem. This was very hard for him to do, but he had to look at his partners' interests, too." "Mark Vittert has built what have become standards of our industry. We believe this to be the single most significant event in the history of our company." Russell said the legal newspapers being bought from Vittert are a natural outgrowth of the business journal publications and should become a greater part of the company's business in the future. marily by starting similar publications in other cities, though some of its other papers were purchased rather than started from scratch. American City Business Journals now has papers in San Francisco, San Jose and Sacramento in California; Portland, Honolulu; San Antonio, Texas; Denver, Milwaukee; Louisville, Columbus, Ohio; Buffalo, Albany and Westchester County in New York; Connecticut; Jacksonville, Wichita.

Charlotte, N.C.; and Richmond, Va.The company went public last July and is traded over the counter. Russell said that, with the sale, his firm becomes by far the largest publisher of business journals in the country. Scripps-Howard publishes 10 journals and Crain publishes four, he said. County: and a legal publication in Indianapolis. Vittert's company is known as Business Journal Publications Corp.

Russell said he does not expect personnel changes at any of the St. Louis publications because of the sale. More than 100 employees in St. Louis and about 300 nationwide are involved. "There is nothing that needs to be done," he said.

"It is an excellent company with excellent management. Their depth of management is very, very good. There will be no personnel changes, and in fact there may be some promotions. "Mark has some other plans, but we have asked Mark to serve on our board, and he will continue to play an editorial role and oversight role over publications in St. Louis." By Dale Singer Of the Post-Dispatch Staff The St.

Louis Business Journal, St Louis magazine and other publications owned by Mark Vittert and partners have been sold to a Kansas City company for $40 million, new owner Mike Russell announced Monday. Russell is chairman of American City Business Journals, a 4-year-old firm that started with the Kansas City Business Journal and now publishes similar journals in 20 cities. It also publishes Corporate Report, a business magazine in Kansas City, and 40 association directories. In addition to the St. Louis Business Journal and St Louis magazine, the sale includes business journals in Indianapolis, Cincinnati, Pittsburgh, Philadelphia and Baltimore; legal publications in St.

Louis and St. Louis Raises Will Go Further By Paul Wagman Of the Post-Dispatch Staff They may not realize it but executives, professionals and other salaried workers may get one of their biggest inflation-adjusted pay increases in 15 years in 1987, a management consulting firm says. Employers are planning average salary increases of 5.6 percent in 1987 for executives, professionals and administrative and clerical workers, says the management consulting firm, A.S. Hansen Inc. In the St.

Louis area, that figure is 5.5 percent, the company says. It bases its figures on a survey of 2,500 companies nationwide, including 400 in St. Louis. These percentage increases are the lowest in 15 years, Hansen says. They will probably lead many employees to think that their increases are diminishing.

But when adjusted for inflation, the increases will be relatively excellent, the company said. The company expects inflation next year to be in the 2 percent range. Thus, pay adjusted for inflation will likely rise about 3.5 percent next year, the company said. That's just marginally lower than the company's projection for 1986 of a 3.8 percent increase nationwide and 3.7 percent increase in St. Louis, adjusted for inflation.

Employees will need many more years like 1986 and 1987 to make up the losses they suffered between 1969 and 1982, said Howard Lund, president and chief operating officer of the company. During each of those years, employees were losing about 3.4 percent of their purchasing power, he said, even though they were receiving pay increases as large as 10 percent. Companies can also be expected to become more flexible in the benefits they offer, allowing employees to draw more benefit from their pay, said Lund and David Walker, head of Hansen's St Louis office. For example, more employers are offering alternatives to employees in two-income families where benefits, such as medical insurance, are redundant. Employees at such firms can take the cash value of their coverage or use it for such specific purposes as child care or medical-related expense such as vision care, psychiatric treatment and non-smoking clinics, Lund and Walker said.

Lund and Walker were interviewed shortly before a workshop Hansen presented Monday to personnel managers at a workshop here. Hansen, which has offices in 20 cities, is based in Deerfield, 111. Vittert refused to comment on the sale or his future plans. Along with Vittert, major partners in the St. Lou- I is company are An- Hrpw Npwman nf jjvj Louis and John I if')irl Indianapolis.

The St. Louis Busi- ness Journal started in 1QSO nniler TVin Keough. who later left to help start the Kansas City Business Journal in September 1982. model- Vittert ing it after the St. Louis publication.

Keough now is with the Business Journal in San Francisco. American City Business Journals has grown rapidly. Russell said, pri- houses shows six agreeing that such a rate cut will be made by the end of December. The others surveyed said the Fed may drop its lending rate in the October-December period, after receiving evidence on the progress of the economy in the third quarter. They said the rate cut could perhaps take place early next year.

All the economists doubted that the Fed would lower the rate in the next few days to coincide with this week's International Monetary Fund-World Bank meeting. The economists had the following broad conclusions about the fourth-quarter economic outlook: The U.S. economy, which grew at respective inflation adjusted annual rates of 3.8 percent and 0.6 percent in the first two quarters will expand at rates of about 2.25 to and 2.50 percent in the final two quarters. West Germany and Japan in the next few months will bow to U.S. People Express Cuts 1986, Reuters News Service NEWARK, N.J.

People Express said Monday that it will offer 50 percent discounts on all domestic flights between Oct. 2 and Nov. 19 provided Is -v "1- wake is embedded blade tip vortices under the the system may the inflow by the The tests are Langley Research Lasers Light Way An Army researcher aligns an advanced helicopter model before laser-assisted wind tunnel tests. Called a laser velocimeter, this relatively new research tool may help designers predict helicopter rotor performance by unobtrusively measuring complex air flows in difficult-to-get-to places. The research problem is complex.

The rotor with a myriad of rotor arranged in a helical pattern rotor system. The flow into appear to be benign, but characteristics can be greatly affected rotor wake and its complexity. being conducted at NASA's Center in Hampton, Va. New Discount Rate Cut 'Happily Ever After9 Is No More One presumes the irony was unintended when the House of Representatives voted the other day to ban mandatory retirement at 70 years of age. The way things are going in business these days, it's mandatory retirement at any age after 45 and layoffs regardless of birthday that has office workers terrified.

Name a big company and it's certain to be cutting office staff. Outfits such as Eastman Kodak, Xerox and Polaroid that once were known for policies amounting to lifetime employment have pushed people out the door through early retirement or layoffs. IBM is clinging to its no-layoffs policy but transferring staff people out of offices and into the field where they can call on customers. And now American Telephone Telegraph, once regarded as the country's most loyal employer, has asked its divisional executives to compile lists of the expendable from among its 100,000 managers. Those named will be offered early retirement, and if there are not enough takers, theoffer will become an order.

What is going on? A widespread attempt to trim corporate fat and tone up profitability, obviously. But more than simple cost cutting is involved. What is occurring is a shift in U.S. corporate policy that has as much importance for young people starting work as for company veterans. Some implications of this "downsizing" phenomenon are: a) that jobs at company headquarters henceforth will.be fewer but more demanding; b) that you will be responsible for your own career with little chance that a warm and friendly company will be your guide and teacher and a corollary of that last that the idea of spending an entire career with one company will become increasingly passe.

BUT PREDICTIONS are foolhardy because, clearly, the issue goes beyond dollars and cents. "It's a breaking of the psychological contract that said I come to the company and work hard and the company rewards and takes care of me," says Chairman William Morin of Drake, Beam and Morin a firm that does outplacement, as the business of finding work for the corporate dispossessed is called. Why is it happening? So that U.S. business can increase white-collar productivity, says the management consulting firm of Cresap McCormick and Paget, which surveyed 71 big companies in collaboration with the American Productivity Center. The survey found U.S.

business striving to emphasize direct production and sales work called the line function in corporate parlance at the expense of the support services, or staff functions. That means the sales force of the future will need to do its own financial and market analysis, because there will be no one at headquarters to do it for them. So is productivity rising? Not so the statistics yet show because our economy is changing rapidly and unpredictably, says A. George Gols, of the research firm Arthur D. Little Inc.

"Productivity undoubtedly increased at! the firms doing the downsizing," explains Gols, "but elsewhere in the eoonomy the newly employed are being hired in areas where the productivity is not high." Child care is such an area, and business services such as contract computing and accounting is another. These activities tend to hire young people and the work is often part-time. INDEED, the Labor Department reports that 17.4 percent of those employed now work part time, compared with 16.6 percent a decade ago, and 15 percent in 1970. To be sure, increasing part-time work and loyal employees losing their jobs doesn't sound like a description of good times. And the fact that we are not alone is small compensation.

Japanese companies, too, are looking for ways to reduce the expanded staffs that have grown like moss on their corporate organizations. But a tougher environment need not be. a depressing one; indeed it could be bracing. Citibank is telling the young people it recruits these days that while there will be no omniscient company guiding their lives, they will be responsible for their own careers. And for the older employees, job responsibilities and authority will have to be expanded, if companies are not to cease functioning altogether in the emotional wake of their downsizing.

Perspective is essential. These may not be the best of times, but they are not the worst either. It is useful sometimes to read the obituaries of prominent people who started their careers in the depression 1930s. Their stories often teach us that individual effort and luck, frequently overcome difficulties and that life is more random than the phrase career path implies. 1986, Los Angeles Times Syndicate Quaker To Rival Ralston NEW YORK (AP) Quaker Oats successful bid to acquire Anderson, Clayton Co.

and its Gaines pet food unit underscores Quaker's aggressive expansion in the market it knows best packaged foods. By adding Gaines to its Ken-L Ration pet foods, Quaker will shed its also-ran status in the $5 bftlion pet food business and jump to second place behind industry leader Ralston Purina Co. Ralston had also sought to buy Anderson Clayton. Quaker's agreement to buy Anderson Clayton for about $805 million, announced Sunday, also came only a month after Quaker acquired another producer of packaged foods for consumers. Golden Grain Macaroni maker of Rice-a-Roni side dishes, for $275 million.

And Quaker, under the direction of chairman William D. Smithburg, is investing in other packaged-foods markets. Earlier this month Quaker disclosed it purchased a 4.8 percent stake in baby food giant Gerber Products Co. The purchase fueled rumors that Gerber might be Quaker's next takeover target, but both companies denied the speculation. This is not the first time Quaker has used acquisitions to fuel its growth.

In 1983 Quaker bought Stoke-ly-Van Camp Inc. for $238 million, winning a bidding war with Pillsbury Co. In the early 1980s Chicago-based Quaker also acquired companies outside the packaged-foods area on the premise that diversification would help offset any slowdown in some of Quaker's mature markets, such as cereals. The 85-year-old company, which already owned Fisher-Price toys, moved into specialty retailing by acquiring Jos. A.

Bank Clothiers, an apparel producer and retailer; Brook-stone, a retail and mail-order marketer of tools and housewares; and Eyelab, a chain of optical stores. But last month Quaker acknowledged that while the specialty retailing group was profitable, it was not generating the growth Quaker had. hoped, and the company put the operations up for sale. Analysts they should fetch a total of between $150 million to $200 million. In Quaker's fiscal year ended June'.

30, specialty retailing accounted for only $217 million in revenues, or 6-percent of Quaker's $3.67 billion in total sales. By putting its retailers on the auction block, Quaker also made clear it was going back to packaged foods to promote future growth. Quaker has reason to play its. strength. Packaged foods is the company's profit center, helping Quaker's overall earnings climb an average 13.9 percent over the past two years to $179.6 million in fiscal 1986.

Quaker's net profit margin its net income as a percentage of total sales also has climbed steadily, to 4.9 percent in fiscal 1986 from 4.5 percent and 4.2 percent in the two! previous years, respectively. In Boom nualized contract value of $116.1 billion, while contracts for public-works and utility construction declined 3 percent to an annualized rale of $40-billion, primarily because of a drop In' highway work. The firm said it expected residential construction to perform strongly! for the rest of this year due to stability in mortgage rates. With Comsat lion shares of Contel common stock' outstanding, according to Roger Co-chetti, Comsat's director of investor relations. Boards of both companies have already approved the deal.

Shareholders and the federal government must also give their approval. Comsat said its annual dividend will increase to $2 per share to bring it in line with what Contel shareholders now receive. Comsat offers international satellite services, satellite communications facilities for ships at sea, and -specialized communications networks, including the system that transmits NBC-TV programming to local stations, i 1986, Reuters News Service NEW YORK Despite growing pessimism about interest rates and inflation, economists say a Federal Reserve discount rate cut is possible by year's end. They say the Federal Reserve will be forced to drop the rate despite the risk of fanning inflation. The more overriding concerns of stimulating the economy, relieving pressure on the banking system and international debt problems will take precedence, they say.

The drop would be the fifth such one-half-point cut in the basic lending rate this year, one of the most aggressive credit easing chapters in the Fed's history. The current rate is 5'2 percent. "The Fed will accept that it's much more dangerous for the United States to slip into recession than to have a mild uptick in inflation," said Paul Boltz of T. Rowe Price Associates. A Reuter poll of 10 leading economists at major banks and brokerage Business Briefcase St.

Louis Expected pressure to stimulate their economies. But they are likeiy to do so by boosting government spending and other fiscal means, rather than dropping interest rates. According to the average forecast of the economists polled, the Federal Funds Rate, at which banks lend short-term funds to each other, and the interest rate on 30-year Treasury bonds should each fall slightly more than a quarter percentage point by year's end to reach about 5.50 and 7.30 percent, respectively. The survey found less agreement on the prospects for bank prime rate cuts next quarter. Of the nine economists giving specific rate forecasts, four projected a half-point prime rate drop to 7 percent, four saw no change and one expected banks to lift the rate to 8 percent.

Banks recently have been slower to cut prime rates because of financial pressures this year. Fares 50 Percent the tickets are purchased by Wednesday. People Express, the pioneer of low airline fares, recently agreed to be acquired by Texas Air Corp. lized rate of $81 billion, F.W. Dodge said.

However, the firm said the growth was extremely uneven, flourishing in the north-central part of the country but declining in the South and West because of excessive office construction in those areas. F.W. Dodge said residential building, which has slackened in recent months, stabilized in August to an an Contel Merging WASHINGTON (AP) Contel with 2.3 million telephone customers in 30 states and the Caribbean, will become a wholly owned subsidiary of Communications Satellite a company one-fifth its size, under a $2.6 billion stock-swap merger agreement announced Monday. Comsat, based in Washington, sells satellite capacity for international transmission of telephone calls and television signals, while Contel's main business is local phone service. Shareholders of Contel, which is based in Atlanta, will receive, tax-free, 0.94 of a share of Comsat for each share of Contel common stock they own.

That means Contel would pay the equivalent of about $2.59 billion in its owh1stock for the 76.5 mil Construction Seen Still MARSH STENCIL MACHINE Co. of Belleville announced that a cooperative manufacturing and sales agreement with Willett International Ltd. of Slough, England, has been terminated. The agreement involved ink jet printing equipment, ink and related products. Each company will make and sell its own equipment, and each will honor warranties and provide service for equipment already sold.

Nation FEDERAL EXPRESS Corp. said it will end its ZapMail electronic transmission service in mid-November because of an inadequate market. ZapMail has been losing money since it was introduced in July 1984. The move will require a pretax writeoff of about $340 million, the company said. MERRILL LYNCH Co.

announced plans to sell its real estate-related businesses and invest the money into its "core businesses" such as global merchant banking, trading and securities underwriting. Merrill Lynch Realty has 400 offices in 20 states and a staff of more than 14,000 sales representatives and was involved in the sales of more than 100,000 homes in 1985. The company also includes a mortgage corporation and a relocation division, which specializes in selling homes of corporate transferees. CAMPEAU a Canadian real estate developer, offered to sweeten its bid for Allied Stores Corp. to $66 from $58 a share if the U.S.

retailing company's board supports the new bid. Allied, which operates such well-known stores as Brooks Brothers and Bonwit Teller, had rebuffed the lower bid as inadequate. THE CHAIRMAN of Mayflower Group Inc. said Monday that he and other Mayflower managers have proposed acquiring all outstanding stock in the company through a leveraged buyout. John B.

Smith, chairman and chief executive officer, announced the plan to take the household moving company private. NEW YORK (AP) New office projects helped nationwide construction contracts rise 3 percent in August compared with July, showing that the mid-1980s building boom is still alive, a research firm said Monday. The F.W. Dodge Division of the McGraw-Hill Information Systems a major source of data on construction markets, said the value of construction contracts in August amounted to an annualized rate of $237.1 billion, compared with $230 billion in July. The August showing brought the 1986 year-to-date total of construction starts to $163.5 billion, a 5 percent increase over the comparable 1985 period when the total was $155.8 billion, F.W.

Dodge said in a statement. "Renewed strength in contracting for new construction during August shows that the mid-80s building boom isn't over yet," George A. Christie, F. W. Dodge's vice president and chief economist, said in the statement.

"Despite concern about tax reform and federal budget cuts, 1986 is well on the way to breaking all records." Contracting for non-residential building, primarily office space, broke out of a three-month slump in August, risingao percent to an annua.