Arizona Daily Star from Tucson, Arizona • Page 51

(he Arizona Bailn Slur Tucson, Wednesday, March 14, 1984 BOLE COPY General news 6F In brief BiSTAVfl From wire reports "Anybody that's been (operating a border) business realizes that Mexican devaluations are not something that's new," he said. "They've been going on for generations." During a brief debate on the House floor yesterday, McNulty questioned Olin's assertions, saying the economic upheaval that followed the devaluation could easily parallel the damage caused by a hurricane. Under the legislation, interest rates on loans of up to $100,000 could not exceed 8 percent. The $100 million pool also is to be used to provide loans for businesses hurt by the Agriculture Department's crop-reduction program, and for areas hurt by sudden changes in a region's economic condition. Eckart, who represents an Ohio district hit hard by the recession in basic industries, said the peso program is "special-interest earlier.

The congressional panel "assumed" devaluation played a "significant role" in the upsurge, according to the report. The drive to eliminate the new loan system is spearheaded by Democratic Reps. Dennis Eckart of Ohio and James Olin of Virginia. Both are members of the Small Business Committee and lost similar attempts to block the peso-loan program in committee. Olin said in an interview yesterday that he thinks border businesses deserve some type of federal assistance, but the loan program in the measure is too vague to ensure that the government will be repaid.

"They need help," Olin said. "The question is what's government obligation in that case? Where does it start and where does it stop?" Olin also said businesses should have developed a strategy to limit their dependence on Mexican currency well in advance of the 1982 devaluation. "In northeast Ohio, we don't have a special loan fund to assist our ailing small machine-tool industries being competed against unfairly by the Japanese and other foreign toolmak-ers," an Eckart spokesman said. A Udall spokesman said the intraparty squabble and continuing concern about the size of the federal deficit would make a tough fight for border-state congressmen. "With two Democrats working to delete (the peso program) and the Republicans railing against us, it's going to be a real tough uphill battle," a Udall aide said.

"Some Democrats are going to line up behind (Eckart-Olin) in an election year, but I think we can pull this one out." Standing in support of the peso plan is Rep. Parren Mitchell, chairman of the Small Business Committee. By John Ellement States News Service WASHINGTON Arizona's Democratic congressmen are seeking help to block an attempt to kill a new $100 million program that would provide low-interest loans to small businesses hurt by the peso devaluation. Reps. Morris K.

Udall and Jim McNulty are trying to muster enough votes to save the provision that is included in a $2.8 billion bill the House is to vote on today that would reauthorize and alter operations of the Small Business Administration. According to a report released by a House oversight panel last year, the 1982 peso devaluation cut spending by Mexican nationals in American towns along the border to $450 million, contrasted to $4.6 billion in 1981. Businesses filing for bankruptcy in Arizona in 1982 jumped by 50.3 percent from a year Retail sales edged down 0.2 percent in February, but remained well ahead of sales a year earlier, the Commerce Department said yesterday. The drop was expected after a 3.3 percent increase in January. Federated Department Stores, owner of Levy's, had record profits in its final quarter of $172.7 million on revenues of $2.9 billion.

General Motors contended during opening arguments in a federal courtroom that its 1980 X-cars, which the government says have defective rear braking systems, are among the safest on the highway. The Justice Department seeks the recall of 1.1 million of the cars and $4 million in damages, alleging that GM tried to cover up the problem. Major U.S. manufacturers' bud Detroit can stand alone, Baldrige says -i i il I "it am 'v. a tab? WASHINGTON (AP) The U.S.

auto industry has regained enough strength to stand on its own without a fifth year of limited exports of Japanese cars to this nation, Commerce Secretary Malcolm Baldrige said yesterday. But Baldrige said the steel industry still needs more adjustment quite possibly including consolidation through mergers to become competitive worldwide. Related story, Page 5F. Baldrige, who has criticized the Justice Department's blockade of one recent big steel-merger proposal, said that matter was out of his hands. But he added, "You have to get efficient or something is going to happen.

You close up, go bankrupt." Commenting in a breakfast meeting with reporters, he was much more upbeat about the auto industry, which has come back strongly from the recession with the help of the Japanese limits on their own exports. The Reagan administration, though still proclaiming itself in favor of free international trade, pressed the Japanese to extend the limits to a fourth year, which begins this month. The administration's justification aside from the problems of an important U.S. industry was that Congress would vote even stiffer restraints if the Japanese didn't impose them voluntarily. "I don't think we should renew that" for a fifth year, Baldrige said yesterday.

"I was for this last year," despite the fact that the major auto companies showed clear revival in 1983, he said. "You don't rebuild a balance sheet with one year's earnings," he said. "But the automobile companies have had four years now to come back" and have been able to use some of their profits for modernization programs to help them compete on better terms with foreign companies. "They're all going to have an excellent year this year," he said. On the subject of steel, Baldrige said he was bowing out of the public debate, in which he has criticized the Justice Department's blocking of a merger between LTV Corp.

and Republic Steel two of the industry's giants. zit -if I--. Alan Dorow, The Ariiona Daily Star The brass, the press and the builders check out the new recruit 1 First of 80 Learjet enlistees joins Air Force for light lifting Seattle firm will buy KZAZ for $13.2 million geting for capital spending on new plants and equipment rose in the final quarter of 1983 to the highest level in nearly two years, a survey by the Conference Board said. The survey revealed capital appropriations of $25 billion, up 17 percent from $21.5 billion in the same quarter a year ago. The Mexican government has refused to allow tortilla producers to raise prices by 2 cents a pound to keep pace with the nation's 80 percent inflation rate.

Meanwhile, the government will spend nearly $20 billion for capital projects this year, which represents 37 percent of the 1984 spending plan. Brazil should seek a long-term solution to its foreign debt of more than $96 billion, Samuel H. Arma-cost, president of BankAmerica told Brazilian officials. Brazil recently received a $6.5 billion loan by a syndicate of more than 700 North American, European, Middle Eastern and Japanese banks. mart, the nation's second-largest retailer, has agreed to take over the Associated Hosts Inc.

restaurant chain for $80 million in stock, the two companies announced. A mart spokesman said the purchase is part of an effort to diversify. Standard Oil of California's chairman met with the key Senate opponent to his company's planned $13.2 billion takeover of Gulf Oil Co. The meeting between George M. Keller and Sen.

Bennett Johnston, occurred a day after Johnston introduced a bill to put a six-month moratorium on mergers among the 20 largest oil companies. United Airlines flight attendants overwhelmingly ratified a proposed contract calling for an 18-month pay freeze and a two-tier wage scale for the next five years. The pact was approved, The contract, retroactive to last April, calls for a wage freeze until October 1985 and then a 6 percent increase. Hand-held mobile telephones capable of greater capacity and better voice quality were unveiled by Motorola Inc. in Washington, one of three cities with a telephone system capable of accepting the instruments.

The company said the $3,995 phone is a milestone, providing businessmen with reliable communications wherever they travel. A San Francisco appeals court reinstated charges against three Califomians who allegedly sold IBM computer trade secrets to two Japanese electronic firms. The panel's decision invalidates a 1982 dismissal of the charges in U.S. District Court. Walt Disney Productions' new movie, "Splash," took in nearly $6.2 million during its nationwide opening weekend, toping the $6 million opening weekend figures posted last July by a reissue of "Snow White and the Seven Dwarfs." World trade rules were violated by the United States last year when it drastically cut Nicaragua's sugar-import quota, an arbitration panel in Switzerland said.

A U.S. government official said the government will not change its policy solely on the basis of the report. West Germany's economic recovery is strengthening, said the West German Banking Federation, and fears of lost momentum are vanishing. The West German mark gained strength against the U.S. dollar, reducing fears that inflation would soar, the federation said.

An oil pipeline across the Arabian Peninsula is being considered by the six-nation Gulf Cooperation Council. The pipeline, which would avoid the war-threatened Strait of Hormuz, is one of several contingency plans for dealing with oil disruptions from the Persian Gulf. Baldwin-United Corp. lost $12.4 million in the third quarter of 1983, compared with a $44.4 million loss in the second quarter last year. The company, undergoing reorganization under federal bankruptcy laws, earned $22.3 million in the third quarter of 1982.

By Ed Lopez The Arizona Daily Star With a high school band to provide the musical fanfare, and a solid contingent of Air Force brass on hand, Gates Learjet Corp. held a "rollout ceremony" yesterday for the first of 80 C-21A aircraft to be delivered to the Air Force. "This is a significant milestone in the history of the company," said Gates President B.S. "Bib" Stillwell. Under a $175.4 million contract awarded last September, Gates is to supply and provide support during a five-year lease for at least 80 C-21A Learjets, a modified version of the Model 35A.

The Air Force has the option to extend the lease for three years, lease another 20 aircraft, or buy the airplanes in five or eight years. The agreement marks the first time that Gates has entered into a contract with the Air Force and the first time the Air Force has signed a multiyear lease agreement for aircraft. Starting next month, Gates is to begin supplying the Air Force at a rate of four airplanes a month. Thomas E. Cooper, assistant secretary of the Air Force for research, development and logistics, said the Air Force is pleased that replacement of its aging fleet of CT-39 aircraft will be accomplished in a relatively short time.

"Six months after signing the contract, we're going to see rubber on the ramp," Cooper said. The Air Force plans to use the aircraft for delivery of high-priority cargo, passengers, and to provide new pilots with experience. The C-21A also can used for operational support missions, such as medical evacuation. It seats up to eight passengers and has a crew of two. Gen.

Thomas M. Ryan, commander-in-chief of the Military Airlift Command, said it is too early to say whether the Air Force will exercise any options in the contract. Stillwell said continued growth in employment at the company's Tucson operations will depend on the number of orders received, but he declined to make any job projections because they would be "purely speculative." Stillwell was non-committal about the possibility of shifting to Tucson certain operations now performed in Wichita, Kan. "We will continually look at our organization, because we want to be as economical as we can," he said. "We are continuing to hire in both locations in modest increments, but not in large surges," company spokesman John Meyer said.

There is no estimate of how many jobs may be added in Tucson this year. Meyer said about 250 jobs have been added in Tucson and 800 in Wichita since the C-21A contract was signed. The company's Tucson employment hit a peak of 2,850 in March 1982, and fell to 1,040 in January 1983. Current employment is 1,265. Meyer said any hiring would be done from the ranks of former employees who are now laid off.

General partners in Roadrunner are Gene Adelstein and Edward B. Berger. Partners with smaller shares include Sen. Dennis DeCon-cini, Pima County Recorder Richard J. Kennedy, former Tucson City Councilman Rudy Castro and former University of Arizona basketball coach Fred Snowden.

The television station went on the air in It was purchased by Roadrunner a decade later from IBC Ltd. The television station has its transmitter on Mount Hopkins in the Santa Rita Mountains and a microwave link with its studio on Tucson's northside. KZAZ, the only commercial independent station in Tucson, has petitioned the FCC for permission to move its transmitter to Mount Bige-low in the Santa Catalina Independent television station KZAZ, Channel 11, will be sold to a Seattle media company for $13.2 million, the station announced yesterday. The sale, which is subject to approval by the Federal Communications Commission, was announced Monday in Seattle by Ackerley Communications Inc. and confirmed here yesterday.

Ackerley owns three network-affiliated television stations, an outdoor advertising business and the Seattle SuperSonics professional basketball team. KZAZ, owned by Roadrunner Television is licensed in No-gales, but maintains only a token presence there and does little programming about Nogales. It employs 70 people. A spokesman said no changes in staff and management are planned. Tucson in 10 years: 840,000 folks and $182,000 homes Tucson because of favorable labor costs, the size of the city being neither too big nor too small, a wide range of urban amenities, and a good educational system.

Because of the industrial growth, employment will increase to 303,300 people by 1992 compared with 190,000 now, for an average annual growth rate of 4.8 percent, Sprague added. Between 1972 and 1982, employment increased an average 4.1 percent annually. The study shows that population will grow in the next decade at an average rate of 4 percent per year to 840,000 from the current level of 568,900. Population rose an average 5.1 percent between 1970 and 1980. Sprague said technology won't provide the only stimulus for Tucson's economy.

The tourist and convention industries are expected to grow and Tucson will become a destination for resort-bound travelers, he said. He predicted, however, that the area will lose some of its attractiveness to retirees as living costs escalate and the characteristics and problems of a large urban area take hold. Copper mining eventually could recover from layoffs that began in 1982 and employ 6,000 to 7,000 miners in Pima County, Sprague said, compared with fewer than 3,000 now. But Sprague's study contends that by 1990, copper mining "will be much less important to the Pima County (and Arizona) economy than it was in 1981." terest rate of 11.5 percent for the period and said if inflation drops below 7.5 percent a year, rates could drop to 10 percent or lower. Sprague said he foresees a strong housing market in the Tucson area, considering the influx of more people, mortgage interest rates far below just a few years ago, and expectations that personal income will increase an average 13.8 percent annually.

The average between 1970 and 1980 was 13.4 percent. Sprague said families purchasing homes in the coming decade will spend an average 27 percent of their income on housing, compared with 37 percent of income during the 1982 housing crunch. Even with an anticipated 9 percent annual appreciation for housing units during the coming decade, Sprague said housing prices will remain affordable if smaller units are built in developments of greater densities. In 1992, with a 25 percent downpayment of $45,623 and an 11.5 percent interest rate on a $136,869 mortgage, the buyer of the "average" $182,500 house would have house payments of $1,355 a month. The proposal assumes an average household income of $60,200 annually.

If all this sounds outrageous, he said, consider telling someone in 1970 that his $22,153 house would be worth in 1984. By Bob Christman The Arizona Daily Star Imagine Tucson in 10 years with 840,000 residents, a vastly expanded high-technology industry, and average residential housing costing $182,500, or about $1,355 a month. It's coming, says Willard F. Sprague, assistant economist for the Federal Home Loan Bank of San Francisco. The predictions were made yesterday at a press conference held by the Southern Arizona Home Builders Association.

The Federal Home Loan Bank, Sprague explained, amounts to a "Federal Reserve system" for thrift institutions. The study was done, he said, because Tucson "is an interesting and very dynamic area." Study results are to go to system affiliates in the Eleventh District, which covers Arizona, California and Nevada. Sprague said he was familiar with Tucson's high-tech industry and expansion, but the study's results surprised him because he thought of the community as a "dusty pueblo sort of place." He said the area is fortunate that high-tech industries decided to move here and build, because "high technology is the future of American industry in the 19S0s." Sprague said computer, electronics and communications industries are attracted to Figures provided by the Arizona Department of Economic Security show mining employed 22,500 statewide in June 1981, compared with 11,400 in January. Farming also is expected to diminish because much of the agricultural land is in the path of urban growth, the report states. About 6,000 acres near Tucson are used for pecan orchards.

Long-term development plans for about half of that acreage already have been announced. And farmers and urban development continue a tug of war for water, with existing legislation favoring urban development. Sprague said local water experts say Tucson has "an ample supply" for 200 years at current consumption rates. "Even if consumption increases at 5 percent annually," Sprague said, "there's still a 50-year supply even if nothing is done for conservation or additional supplies. And certainly things will be done." The study was completed last July and its findings are based on an annual inflation rate average of 7.5 percent, compared with 8.7 percent between 1972 and 1982.

Sprague said if he were just completing the study he would propose an average inflation rate of between 5 and 6 percent for the 10-year period. Sprague predicts an average mortgage in.