Reno Gazette-Journal from Reno, Nevada • Page 32

Today's tip Bus 10B Friday, August 1, 1986 Reno Gazette-Journal ines Freelance illustrator Bruce Wolfe will be the speaker at the noon luncheon meeting of the Reno Ad Club at the Holiday Inn on Sixth Street. Tickets are $11. For details, call 359-CLUB. State's major lenders say lock-in rates locked out Warning by McKay apparently too late By Susan VoylesGazette-Journal Many lenders apparently have quit issuing 60-day, Iocked-in interest rates for mortgages, making Nevada Attorney General Bryan McKay's stiff warning on Wednesday almost a moot point for now. In his letter to financial institutions Wednesday, McKay said that under his agency's enforcement policies, lenders who can't show that at least 75 percent of their recent loan closings occur within their advertised lock-in periods are violating the state's deceptive trade practices act." lenders have allowed the 60 days to lapse so loans could be issued at current higher rates.

Those charges have been repeatedly denied by the industry, with officials saying the refinancing frenzy caught appraisers, credit history reviewers and the mortgage industry off guard. "We have no evidence at this time of pervasive fraud," Walshaw said. The complaints focused on a "wide spect-trum" of financial institutions with no single institution getting more than its share of complaints, he said. Some institutions have negotiated with consumers after the complaints were filed, he said. "Consumers basically want to get loans through.

Some of the licensees have been very good about this it's not worth bad customer relations, no matter whose fault it is. "Other licensees have not taken that approach. In talking with individual consumers, where there have been problems, there is, to date, a dozen complaints. We've initiated investigations on each one of these. There may of may not be action taken on the individuals.

But there is no type of massive fraud of the type described by the attorney general." McKay said he issued his warning "because of the complaints we received and conversing with colleagues in other jurisdictions where this has been more of a problem. "We sent out this letter as preventive medicine more than anything. I made it clear we're not accusing anyone of any- See MORTGAGE, page 7B He said violators can be punished by civil penalties of up to $10,000, plus lawyers' fees and court costs. Criminal charges in cases of willful deceptive trade practices could lead to prison terms of up to six years and fines of up to $5,000. But McKay acknowledged on Thursday that the state's major lenders no longer guarantee set interest rates over a 60-day period, the time it normally took to process a loan.

The institutions have given up locking in loans because it now takes at least 70 days to process them a time lag spurred by the unprecedented number of people refinancing mortgages at low interest rates. More than 100 consumers have complained about lock-in rates to Scott Wal-shaw, Nevada financial institutions commissioner. Their complaints allege Market loss in July totals 117.4 points NEW YORK The stock market closed out its worst month of the year with a small decline in quiet trading Thursday. The Dow Jones average of 30 industrials dropped 4.08 to 1,775.31, finishing July with a loss of 117.41 points. Volume on the New York Stock Exchange slowed to 112.66 million shares from 146.69 million Wednesday.

The Dow's point decline in July was its biggest for a month since November 1973, when it plunged 134.33 points as the country confronted the onset of the energy crisis and a recession that lasted into early 1975. In Thursday's session, analysts said investors felt some relief over the government's quarterly borrowing plans announced after the close on Wednesday. Factory orders fall again WASHINGTON Orders to U.S. factories for manufactured goods dropped 0.3 percent in June, the fourth decline in the past six months, the government reported Thursday. The Commerce Department said orders, which were held back by a steep decline in demand for defense equipment, totaled $191.5 billion, $586 million below the May level and 4.9 percent below their high of $201.2 billion in December.

Since December, orders have posted an increase only in April, a miniscule 0.1 percent advance which did little to offset weakness in other months. Orders fell 0.5 in May. $34 million face li ft for Vegas hotels Ik ftf Stardust, Fremont get housecleaning from Boyd Group By Jane Ann MorrisonGazette-Journai LAS VEGAS A $34 million renovation project for the Stardust and Fremont hotels was announced Thursday by the Boyd Group, the parent company for five southern Nevada resorts. The privately held company bought the two resorts in March 1985 from Trans-Sterling which was forced out of gaming for failing to stop a skimming operation at the two casinos. After the purchase 16 months ago, Boyd officials said they would be upgrading the two properties, which had become shabby and run-down over the years.

The Boyds spent $6 million to improve 1,000 rooms at the Stardust and $3 million to bring up the Fremont to the prevailing fire safety codes. Another $5 million was spent to add new slot machines to the two resorts. Recently, the Boyd Group sold $135 million worth of debentures to raise $34 million for the upgrade. The other $101 million will be used to restructure their existing debt, company president Bill Boyd said, squelching speculation he might want the money to buy yet another southern Nevada property. About $8 million will be spent on the Fremont for interior improvements, including upgrading its 450 rooms.

The race and sports book will be remodeled, as will the buffet, lounge, bar, casino, and keno and poker areas. The exterior is already receiving a new paint job. The bulk of the remodeling will be done at the Stardust, where $26 million will be spent. The additions include a new Gambling Hall of Fame and a new shopping arcade. The hall of fame will consist of different rooms with gambling equipment dating back to the 1930s.

One room will house an old-fashioned casino from the '30s or '40s. Asked if the Stardust and Fremont were being spiffed up to prepare them for possible sale, Ruthe said, "The Boyd group are buyers, not sellers." "If anything, we'd be buying more hotels, not selling," Boyd chimed in. He said later there are no plans now to buy a specific hotel. Although no more rooms are presently planned at the Stardust, Ruthe said long-range plans call for two towers. The Stardust on the Strip is one of the few large properties without a tower.

The reconstruction will start in ugust and take 18 months to complete, officials estimated. During construction, the Stardust's seafood restaurant, the Moby Dick, and Tony Roma's will be closed. The themes of the new specialty restaurants have not been decided. The Boyd Group also owns the California Hotel in downtown Las Vegas, Sam's Town on the edge of the city, and Sam's Town Gold River in Laughlin. Mark rmooa vjcmeutdournai TOP PLAYERS: James Toreson, left, president of Xebec, lobby in Carson City after announcing the proposed merger and Ed Chapin, head of Stride Micro, pose in the Xebec of the companies.

Xebec sets eye on Reno computer firm rOUDFr a mucwffiom staDle market. It will make for a healthier Xebec. 5 James Toreson Xebec president OPEC can't agree on cuts GENEVA The Organization of Petroleum Exporting Countries failed Thursday to reach unanimous agreement on voluntary production cuts to halt the oil price slide and, instead, is making another attempt to break its long deadlock over revised production quotas for its 13 member-states. This fourth OPEC ministerial meeting of the year is now likely to drift on into next week, with virtually no chance of any concerted action to bring down crude oil production, which is pouring more than 20 million barrels a day into an already glutted market. At the end of a three-hour Thursday meeting, Nigerian Oil Minister Rilwanu Lukman, the cartel's current president, emerged to tell reporters that "nine or 10 countries" had made pledges of voluntary production cuts which would total 1.925 million barrels per day.

"We have now concluded our work on voluntary cuts and we are now going back to take up the question of quotas," he said. "The more important thing is that we come to new permanent arrangements." Casino's income falls LAS VEGAS Golden Nugget Inc. reported increased operating revenues but a 17 percent drop in operating income for the second quarter of 1986, blaming the decline on losses at its Atlantic City resort. Operating revenues for the quarter ending June 30, 1986, were $98,582,000, up slightly from $98,339,000 in revenues for the same period a year ago. Operating income, however, was $11,183,000 for the second quarter of 1986, compared with $13,527,000 for the second quarter of 1985.

The $2,344,000 drop primarily reflects a decline in the table games win percentage at the Atlantic City hotel-casino, a company statement said. Net income for the quarter ending June 30 was $2,889,000, compared with $796,000 for the same quarter a year ago. Operating expenses for the quarter were $87,399,000, compared with $84,812,000 for the same period a year ago. Railroads to ship free hay Two railroad companies have offered to ship hay to drought-stricken farmers in the southeastern United States. Southern Pacific Transportation and Union Pacific Railroad have each pledged equipment and transportation services at no charge.

Union Pacific is offering to move hay from any point in its 21-state system to connecting railroads at St. Louis and Memphis for the next 30 days. Southern Pacific's services will be available to its 14-state operating territory. including offices, plants and laboratories in Carson City, Gardnerville and Reno. It employs between 700 and 800 people, most in Nevada, according to Toreson.

Stride Micro, formerly known as Sage Computers, has a work force of about 45 at its South Rock Boulevard building. Stride Micro reported a loss of $100,000 on sales of about $6 million for the quarter that ended March 31. Chapin said he expects to report a "small but positive profit" for the current quarter. The merger gives Stride Micro access to Xebec's extensive manufacturing facilities and the ability to capitalize on a "fairly large and growing" market, Chapin said. Xebec gains the capacity to reduce its dependence on the personal computer market.

Toreson said he hopes to cut the company's personal computer-related sales to less than half of Xebec's By Mike NorrisGazette-Journal CARSON CITY Xebec officials announced Thursday they have signed a letter of intent to acquire Stride Micro, Reno's only computer manufacturing firm. The merger is one of a series of actions being taken by Xebec to cut its dependence on the unpredictable personal computer market and capitalize on the first black-ink quarterly report it has produced in a year. Xebec officials expect the merger to be completed within a month. They declined to release the terms of the deal, but Xebec President James Tore-son did say it was likely Stride Micro would be consolidated with Xebec operations in Carson City. In a related move, Xebec has established a "strategic business unit" to increase sales of products for use in the burgeoning industrial computer market.

Toreson, 44, and Ed Chapin, 51, who recently took over troubled Stride Micro, announced the acquisition at a joint press conference in Xebec's Carson City executive offices Thursday. A day earlier, Xebec had reported net earnings of $25,000 on revenues of $29.9 million for the quarter that ended on June 27. It was the first profit the publicly held company had earned since the quarter that ended in March 1985, although the company had experienced a series of severe losses since late 1984. Xebec, based in Sunnyvale, has most of its operations in Nevada, revenues. Sea MERGER, page 7B AASk USX steel workers contract runs out, 42,000 start strike has 171 AIRCRAFT: Republic planes, mostly short-haul McDonnell-Douglas DC-9s and Boeing 727s.

Northwest has more than 120 aircraft, including 38 Boeing 747s and 20 McDonnell-Douglas DC-10S. THE PRICE: $884 million. HUB CITIES: Minneapolis-St Paul, Detroit, Memphis, Tokyo. RENO: Northwest would assume Republic's service at Reno Cannon International Airport Northwest-Republic merger deal OK'd by Secretary Dole WASHINGTON (AP) The Transportation Department approved the largest airline deal in history Thursday, giving Northwest Airlines the go-ahead to buy Republic Airlines and create the nation's third-largest air carrier. Transportation Secretary Elizabeth Dole, in approving the $884 million merger, acknowledged concern about the potential for reduced competition, but concluded the two airlines would not have the market power to unfairly raise prices.

The ability for a combined Republic and Northwest to raise fares above competitive levels is the "key question" and other competitors would continue to be "in a position to deny the newly merged com-, pany such market powers," Dole concluded. The merger, which more than doubles Northwest's domestic operation, had been opposed by the Justice Department, which argued that the two airlines so dominate traffic in some areas, such as Minneapolis-St. Paul and Detroit, that competition could have "substantial anticompetitive effects." The Justice analysis said the merger could cost travelers $64 million a year in higher fares. Mark T. Sheehan, a spokesman for the Justice Department's antitrust division, said Thursday that no appeal is planned of the Transportation Department's deci- PITTSBURGH The first work stoppage in 27 years by steelworkers at USX Corp.

began as a contract expired at midnight Thursday, with the union calling the action a lockout and the company saying the 42,000 workers are on strike. The labor dispute was prompted by the company's refusal to continue bargaining under the old contract. The United Steel-workers had offered to continue working under the old contract, but USX said work could continue only under the terms of the company's last offer. Negotiators for both sides reportedly met late Thursday afternoon, but failed to reach agreement. Top union negotiators were meeting with local union presidents at 11 p.m.

EDT to update them on negotiations and advise them on picketing. "The lockout is on. We're in for the long haul," union spokesman Gary Hubbard said late Thursday night. "It's going to be a long fight. Nobody wanted this strike." Company spokesman Michael Koff said the steelworkers had terminated the labor agreement and had authorized a strike, so the company, which until recently known as U.S.

Steel Corp, ordered a shutdown. "Operations at all struck facilities have ceased," Koff said late Thursday night. At midnight United Steelworkers president Lynn Williams joined about 150 workers outside USX's Clairton works, shaking hands and offering encouragement. Steelworkers held signs that read, "USWA Local Union Locked Out by USX." The union asked Thursday to continue working under a 40-month-old contract and give USX a 48-hour strike notice while talks continued. But USX chief negotiator J.

Bruce Johnston flatly rejected the offer. "The real purpose of your offer seems transparent: It attempts to convert the coming strike by the United Steelworkers into a legal fiction of lockout, thus aiding union-member claims for unemployment compensation during the strike," Johnston said. Johnston said the union's last offer represented "a substantial retreat" from the union's position Tuesday night which, he said, included a suspension of cost-of-living provisions and a small reduction in USX's hourly employment costs. The union had no immediate comment on the letter. "We were so desperate to reach an agreement we were willing to risk our tradition of no-contract, no-work," said union spokesman Gary, Hubbard.

Associated Press sion. The approval could have been appealed to the U.S. Circuit Court of Appeals for the District of Columbia. Dole concluded that while there is an "extensive overlap" in Northwest and Republic routes, the markets "could be effectively disciplined by other carriers' services" because there are few entry restraints at the Minneapolis-St. Paul airport.

Her decision still must be reviewed by President Reagan, although the president may only reverse the approval on foreign policy or national security grounds. In Minneapolis, Steven G. Rothmeier, president and chief executive officer of NWA the airline's parent company, said steps would begin immediately to prepare a joint flight schedule for the two airlines. Frontier purchase on hold CHICAGO United Airlines put on hold Thursday its $146 million deal to buy financially ailing Frontier Airlines, citing a lack of progress in contract talks with Frontier's pilots. The airline said it was postponing indefinitely its application for federal approval of the Frontier deal.

Union officials called United's announcement a negotiating tactic to pressure the 4,700 Frontier employees into accepting extensions of their current salaries, which are below those of United workers. Wire service and staff reports.