The Philadelphia Inquirer from Philadelphia, Pennsylvania • Page 48

FRIDAY September 23, 19S8 16-C BUSINESS Detente in Del. for Wanamakers and Strawbridge's ers embarked on expansions into suburban malls, a cold-war mentality has prevailed to keep them apart "It's a unique situation. It doesn't exist in any other part of the country," said Robert Mulligan, vice chairman of Woodward Lothrop, Wanamakers' Washington-based parent. In suburban Washington, Woodward Lothrop stores have peacefully coexisted with those of its hometown rival, Hecht's, for a good many years, Mulligan said. The meeting of Wanamakers and needs refurbishing.

When the Christiana store opens, Wanamakers said, the Wilmington store will be closed. The retailer has signed a letter of intent to sell the store to Wilmington real estate developer Louis J. Capano who intends to convert it to offices. The Christiana Mall, which also houses Macy's and J.C. Penney, is the largest and most successful mall in Delaware.

Its owner, Philadelphia-based Richard I. Rubin intends to built a new wing of the mall to accommodate Wanamakers. Strawbridge Clothier at Christiana, he said, "is a big step forward." Strawbridge Clothier's chairman, Francis R. Strawbridge 3d, was less enthusiastic about the prospect. "Yes, it's a fact.

We've never been in the same mall Beyond that, my response is going to be I'm not going to have one. We don't comment on our competition," Strawbridge said. Wanamakers operates a free-standing store off Route 202 in Wilmington, not far from the Christiana Mall. That store, built in 1950, is the oldest of Wanamaker's branches and badly The new Wanamakers, with an estimated cost of $18 million, will be the first new store in the chain since 1978. Mulligan said that negotiations on a store in Christiana Mall had predated the decision earlier this month to put the Wanamakers and Woodward Lothrop chains up for sale.

"We felt that whatever happens, Wanamakers should have a store in Christiana It was something we felt very strongly was the right decision, and we didnt want to stop," Mulligan said. mm r' in "-1ii 41 1 Him i By Barbara Demick Inquirer SUf) Wrtier Together at last. Whispers of detente were heard around the department-store business yesterday as John Wanamaker announced it would build a store in Delaware's Christiana Mall. When the new Wanamakers opens in September 1990, it will be the first time that it and arch-nemesis Straw-bridge Clothier will have done business in the same shopping mall. Since the 1960s, when both retail- lose $7.5 billion in 1st half Proxmire calls for record VS.

bailout By Dave Skidmore Associated Press WASHINGTON The nation's savings institutions lost $7.5 billion in the first half of the year, the government reported yesterday, as a Senate leader called for the biggest federal bailout in history. The Federal Home Loan Bank Board said lost $3.6 billion in the April-June quarter, a modest improvement over the $3.9 billion loss of the first quarter, i Nevertheless, the industry in i only the first half of the year has i already approached the record post-i Depression loss of $7.8 billion for all i of 1987. Senate Banking Committee Chair- man William Proxmire who is retiring after building a repu-, tation as a penny-pinching legislator i during 31 years in office, said yester-i day that the next Congress would i have to appropriate at least $20 bil-! lion about $81 for every man, 1 woman and child in the country to bail out the industry. Healthy which so far have been paying to close or merge failed institutions, will have to contribute an additional $30 billion, he said. The bank-board report and Prox-i, mire's statement came within a week of several new and larger than previous estimates of the cost of cleaning up the thrift industry.

The General Accounting Office, Congress' auditing arm, says it will cost $45 billion to $50 billion. The American Bankers Association, the trade group for commercial banks, estimates the cost at $74 billion, and some private analysts put it as high as $100 billion. The bank board says it intends to raise its $31 billion projection in October. Meanwhile, Treasury Secretary Nicholas F. Brady on Wednesday directed a top deputy, Undersecretary George D.

Gould, to assess the conflicting estimates. That would be the first step in a possible re-evaluation of the administration's stance, which has been that the Federal Savings and Loan Insurance Corp. (FSLIC) has as much "money as it can efficiently spend well into next year. At a time when the administration 'is struggling to reduce the federal 'budget deficit, the question of how much must be spent on is be- coming increasingly critical, Since mid-August alone, the bank 'board has pledged $13 billion in aid to resolve the cases of more than 50 institutions. Because the FSLIC lacks the 'cash to complete rescue packages, its is coming in the form of promis-isory notes and guarantees against cer-I (See THRIFTS on 21-C) Wanamakers is negotiating with the Rubin firm to build a new store in the Willow Grove Park mall to replace an old one in Jenkintown.

That again would make neighbors of Wanamakers and Straw-bridge Clothier, which will open a store in Willow Grove in early October. As with many an ancient feud, the origins of the mall standoff between Wanamakers and Strawbridge Clothier are rather murky. But certainly, the standoff seems to (See WANAMAKERS on 230 PNC says it'll buy Del. bank Deal is valued at $230 million By Janet L. Fix Inquirer Stall Writer PNC Financial Corp.

proved its continuing penchant for growth yesterday by announcing its plan to acquire the Bank of Delaware Corp. The deal has a market value of $230 million and comes only seven months after the Pittsburgh parent of Provident National Bank completed an acquisition in Ohio. Under terms of the deal, each outstanding share of Bank of Delaware common stock will be exchanged for a share of PNC's common stock. In addition, PNC has an option to purchase up to 1.6 million shares of the Delaware company's stock at 70 percent of the market price on Sept. 21.

If the deal is approved by regulators and Bank of Delaware shareholders, PNC, the nation's nth-largest banking company, will have more than tripled its assets to $38 billion by merging eight banks in the five years since it first acquired the Provident. But PNC's chairman, Thomas H. O'Brien, said growth was not the motivation behind the Bank of Delaware deal and the other acquisitions that have given PNC five banks in Pennsylvania and one each in Kentucky and Ohio. He said the bank and its managers, headed by chairman Jeremiah P. Shea, were a "natural fit" for PNC.

"We're not interested in size; we never have been," O'Brien said. "We would be perfectly happy to run this company going forward with no mergers, but where we find a compatible management, an excellent partner, we consider it." O'Brien said acquisition of the Delaware bank, which has $1.8 billion in assets and traces it roots back nearly 200 years, will expand PNC's presence in Delaware. Currently, PNC has a bank that issues credit cards only in Delaware, but has not been able to tap into the commercial lending and consumer markets. "This bank fits completely and consistently with the PNC philosophy of finding high-quality banks in good markets with good management," O'Brien said. O'Brien said that the $230 million deal, when completed in early 1989, is expected to cause only a 2 percent dilution in PNC's earnings per share and that "we'll be very disappointed if we can't earn it back in a two-year period." While industry analysts generally have reacted favorably to the deal and the minimal dilution, some have expressed concern that PNC's far-reaching growth eventually would (See PNC on 23-C) Ted Century (left) of Philadelphia and Joe Pili of Blackwood, N.J., examine the drafting How will it look in the Dechiqn Industries of Horsham held a 'corporate garage sale for the remnants of one of its factories.

OSS-DOVE By Valerie Reitman liutuirer Sraff Writer Robert Holland, manufacturing manager of K-Byte in Gaylord, came to Horsham yesterday for one thing only. He wanted Item 100 on the auction list: "1 Amistar AI6448 Axial Auto Inserter wSensors." In other words, he was eyeing some automated insertion equipment used to make printed circuit boards. He got it for a song $90,000 "half-price," Holland said. About 150 other bidders from places such as West Germany, California and South Carolina also were lured to Horsham by the prospect of bargain-basement prices for oscilloscopes, GenRad strobotacs, impedence bridges, digital voltmeters, monolithic systems microprocessors and other stuff with names just as imposing. The electronic testing equipment, along with robotics, warehouse equipment and machine tools, constituted the remnants of Decision Industries factory, which was auctioned yesterday in a sort of corporate garage sale.

Decision Industries laid off about 175 workers when it phased out its manufacturing operations after being acquired by Onset a group of private investors who also own Momentum Technologies Inc. Onset opted to consolidate production of computers and peripheral equipment at Momentum's plant in Herkimer, N.Y. Momentum and Decision Industries were merged, creating a company called Decision Data which has its headquarters in Horsham and which will continue to operate a service center there. But Decision Data has consolidated four Horsham plants into two. Yesterday, next to the makeshift stage and auction site in the former factory building, about 60 Decision Data work-(See DECISION on 21-C) 1 1 il KN Dove (left) and Kirk Dove conduct ill 1 iH i Ttw PrtilwMptM Inquirar MICHAEL MAU.Y arm on a drawing table.

den? IN i 1( 4 bidding at the auction. pated an operating loss of $9.88 million for the fiscal year. The updated financial information for the fiscal year ended June 30 is contained in an official audit prepared last month by Arthur Young a Big Eight accounting firm. The audit, commissioned by the Port Corporation, was released yesterday at a meeting of the agency's board. Port Corporation officials said the difference between the $12.5 million operating loss cited in the audit and the $9.88 million suggested by the budget document could be explained, in part, by the fact that the budget document did not include 10.49 Declining issues outnumbered advances by about 8-to-5 in nationwide trading of New York Stock Exchange-listed stocks, with 556 up, 881 down and 518 unchanged.

Volume on the floor of the Big Board came to 150.67 million shares, up from 127.40 million Wednesday, when activity was curtailed somewhat by the observance of Yom Kip-pur, the Jewish Day of Atonement. Nationwide, consolidated volume in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the- Ross Big companies that paid no federal income tax in 1987 IFewer firms beating U.S. taxes, group says Port 1988 operating loss a higher-than-feared $12.5 million Company 1 987 profit in millions IBM $2,9300 General Motors 2,400.0 Aetna Life 1,010.0 Goodyear 573.7 Carolina Power 536.3 Hewlett-Packard 405.0 Consumers Power 384.3 Illinois Power 344.5 Gulf States Util. 273.2 Baxter Travenol 233.0 Ashland Oil 158.5 Corning 122.6 Pennzoil 76.8 Greyhound 62.9 Ogden 55.7 Sequa 42.3 By Gary Cohn Inquirer Stall Writer The Philadelphia Port Corp. had an operating loss of $12.5 million for fiscal 1988, a significantly higher operating deficit than it had anticipated.

It was the 10th consecutive year that the agency has had an operating deficit. Even after including more than $5 million in government subsidies, the agency had a net loss of $7 million, its sixth consecutive net loss. The Port Corporation, which oversees the city's docks, had indicated in a budget projection provided to board members in June that it antici Dow drops from Inquirer Wire Servfcea NEW YORK Stock prices declined yesterday in selling apparently prompted by investors' impatience over the market's recent sluggish performance. Analysts also blamed computerized program trading as well as government figures showing a large federal budget deficit in August. The Dow Jones average of 30 industrials, down more than 18 points at its midafternoon low, closed down 10.49 loss, to 2,080.01.

critical test of its effectiveness," said Robert Mclntyre, director of the organization. "Tax reform may not have have made things less complex or cut everyone's tax bill," Mclntyre said. "But tax reform has made great strides toward a system that puts all profitable corporations back on the tax rolls. And that should, over time, help restore public confidence in our tax system." Sens. Bob Packwood Ore.) and Bill Bradley N.J.), key authors of the 1986 law, voiced the same sentiments.

Packwood said he was surprised that the number of legal tax avoiders had dropped so quickly. Some companies reduced tax paid in 1987 by using deductions left over from previous years. Packwood predicted that as those deductions, or tax-loss carry-forwards, were used up, the number of companies paying no tax would continue to dwindle. But there may never be a time when every profitable company pays tax, he said, because "companies may come up with things that we didn't think about" The biggest factor reducing corporate taxes is still accelerated depreciation, which allows companies to recapture through the tax system part of the money spent for plant and equipment. The tax-cutting strategies used by corporations are legal under various 'By Jim Luther Auociated Prtu WASHINGTON The number of 1 large, profitable corporations that legally paid no federal income tax was 'cut to 16 in 1987, less than half as jmany as in the year before, according to a new study.

The 16 companies were among 250 i profitable corporations surveyed by Citizens for Tax Justice. The number 1 of big companies able to wipe out 'their entire federal income tax li-'ability shrank from 40 in 1986 and 72 I in 1982, according to the Washington tax-research group, which is financed by unions, churches and so-icial groups. Some of the 16 disputed 1 the report. Paul Huard, vice president of the 'National Association of Manufactur-'ers, criticized the report for what he called its "horror-story type of argu-, ment." It is unfair to look at a company's taxes for just one year, he said. "The nature of corporate profits and tax accounting being what it is, you 1 are going to get these cyclical varia-1 tions from year to year," he said.

Citizens for Tax Justice said fewer 'companies paid no tax in 1987 because of the sweeping tax changes enacted in 1986. The Tax Reform Act of 1986 cut tax rates as it reduced or I removed several deductions and tredits previously available to individuals and corporations. "Tax reform has passed the most $1.2 million in depreciation for port facilities. Higher-than-anticipated expenses associated with the operations of the city's Packer Avenue and Tioga Marine Terminals also contributed to the difference. The audit is the latest in a long series of financial setbacks for the Port Corporation.

Over the last 10 years the agency's operating losses have totaled more than $35 million. By comparison, competing ports along the North Atlantic coast, including New York and Wilmington, generally have had operating profits. (See PORT on 23) to 2,080.01 counter market, totaled 177.06 million shares. Wall Street has become concerned about a recent rise in short-term interest rates in the bond market, analysts said. "Short-term rates been a real thorn in the market's side," said Brian Luedtke, a technical analyst at Piper Jaffray Hopwood.

"If the rates would come down, that would be a focal point and would let people get committed to the stock market." "There's no compelling reason to (See STOCKS on 21-C) SOURCE: Crtueni for Tax Justice tax-code provisions most of which were enacted as incentives for business investment. The 16 companies listed on the report as paying no federal income tax last year are General Motors IBM Aetna Life Casualty Baxter Travenol Laboratories Carolina Power Light Illinois Power Corning Glass Works, Hewlett-Packard Ashland Oil Greyhound Ogden (See TAXES on 21-C) I.