The Baltimore Sun from Baltimore, Maryland • Page 45

THE SUN THURSDAY, AUGUST 20, 1992 BUSINESS 13C FINANCE Employers rethink retiree benefits Talks to resume Talks between Bell Atlantic Corp. and two labor unions representing 52,000 workers were scheduled to resume at 1 1 a.m. today. Talks were discontinued Monday night. The Communications Workers of America, which represents about 40,000 workers 8,500 in Maryland and the International Brotherhood of Electrical Workers, which represents about 12,000 Bell Atlantic workers, have been talking with Bell Atlantic to try to agree on terms for a new three-year contract since mid-June.

Unionized employees are working under terms of the old contract, which was scheduled to expire Aug. 8. By Leslie Cauley Staff Writer Long-term employees at Maryland companies once could look forward to fully paid health-care benefits in their twilight years, something retirees on fixed incomes expected and employers gladly provided. Times have changed. Pummeled by health-care costs that are rising 15 percent to 20 percent a year, many companies are scrutinizing retiree benefits and deciding they can't afford them.

The upshot: Companies are asking retirees to shoulder more of those costs. "Companies used to pay for their retirees forever," said Pennle Hinds, senior consultant practice manager with Corroon-Herget Division in Baltimore, an international health-care consultancy. "Now they're saying 'We'll pay dollars towards benefits, but no The contract dispute between Bell Atlantic Corp. and two labor unions has focused attention on the benefits issue. Retiree health care Is a percent of health-care cost increases.

And many more companies in Maryland and across the nation are likely to face such fights. Nearly two-thirds of the companies that offer retiree health-care plans have taken steps to limit benefits in the past two years or plan to do so by 1993, according to a study released this week. That's the case at Baltimore Gas and Electric which Instituted a new benefits program July 1 for people who retire after that date. The program also is available to current retirees on an optional basis. Under the program, retirees are given an allotment of benefit dollars, issued as a monthly credit, that can be spent on any health care plan available through the company.

Retirees who choose the more expensive plans will have to cover some costs. Those who choose less expensive plans will wind up with a surplus of credits, which the company will reimburse with cash. Before the new plan, the company covered all See PHONES, major sticking point In negotiations on a new, three-year labor contract Bell Atlantic wants new retirees to eventually pay as much as 50 -rr are bristling, Justifiably or not, at the idea of someone coming in and targeting wealthy customers. They note that Goldman, with a mere 200 brokers, tended to assign new customers to a specific broker, according to his or her specialty or geographical region. Legg has close to 10 times as many brokers and the company's attitude is closer to every man for himself.

Mr. Shelly will have the leeway to seek customers nationwide, and some brokers suggest he'll need it, because Just about everyone In Baltimore with $10 million to Invest already has a broker to Invest it. MNC deal raises hopes at Baltimore Bancorp Last month's proposed acquisition of MNC Financial Inc. by NationsBank Corp. still leaves at least one local banking company In play.

Baltimore Bancorp hasn't tried to hide the fact that Its health regimen, In many ways mirroring MNC's own continuing recuperation, could lead to the sale of the parent of the Bank of Baltimore. That Is, if anyone considers It a prize worth winning. The MNC deal could help Baltimore Bancorp in two ways, Investor relations chief David L. Spil-man argues. First, any out-of-state bank that still wants to enter the wealthy Baltimore-Washington market now has one choice fewer.

Baltimore Bancorp, with almost $1 .9 billion in assets, is still one of the few independent banking companies of any size In the region. But with a whopping 7.9 percent of Its assets classified as non-performing on June 30 (vs. 3.2 percent for Salomon Brothers' 50-bank Index on Dec. 31, 1991), the company still has much primping to do before it'll be ready to entertain potential suitors. Second, the complicated "stakeout merger" that MNC's Alfred Lerner and NationsBank's Hugh McColl negotiated could inspire a similar deal for Baltimore Bancorp, which, like MNC, must reduce its portfolio of troubled assets and, unlike MNC, raise its capital ratios substantially before anyone will take it seriously as a merger candidate.

Danz picking winners at Oxford Capital John G. Danz chairman of Towson-based Oxford Capital Management, may not be prophetic, but he apparently knows now to pick and hold a good stock or two. His company, which manages about $300 million in assets for Institutional and individual clients, ranks No. 1 among the nation's balanced portfolio managers for long-term investing, according to Pensions Investments magazine. The company's 10-year rate of return (as of March 31, net of fees and transaction costs) was 21 .9 percent.

Mr. Danz is an alumnus of the former Baker, Watts and of First National Bank of Maryland and Mercantile Safe-Deposit Trust Co. By David Conn -i: ah I 1 1 -tVK it- i $30,000 to the client and pay for an apology ad, but Mr. Evans kept the client. "He handled It extremely well," said Mr.

Schnably, who resigned as a result of the incident but remains a friend and admirer of Mr. Evans. During that career, Mr. Evans became one of the most influential and respected advertising executives In Baltimore at a time when the city was evolving from an advertising backwater to one of the most important regional centers In the Industry. "He was regarded as the creative guru, certainly in the region, if not nationally," said Roger Gray, president and chief executive of See EVANS, 1 BARBARA HADDOCKSTAFF PHOTO Bill Evans, just retired from Gray KlrkVanSant ad agency, relaxes on his dock in Grasonville.

ADMAN BILL EVANS TAKES FIVE Trade gap narrowed in June Plane sales help set export record, shrink deficit 7.7 Associated Press WASHINGTON The U.S. trade deficit narrowed by 7.7 percent In June, to $6.59 billion, as sales of U.S. aircraft abroad helped set an export record, the government said yesterday. But analysts cautioned that aircraft sales are volatile and that weakness In the economies of major U.S. trading partners continues to threaten overseas sales.

The Commerce Department said exports, which had fallen In the previous three months, totaled $38.28 billion in June, up 7.2 percent from $35.72 billion In May and surpassing the record of $37.65 billion set In February. Imports hit a record too, partly because of the rising price of petroleum. But the 4.7 percent advance, to $44.88 billion, was not as steep as the gain in exports. The previous high was $43.47 billion in April. In addition to the increased exports of capital goods, which Include aircraft, other major export categories automobiles, agricultural and consumer goods and industrial supplies posted modest gains in June.

The report cheered the Republican administration as President Bush awaited his party's renomlna-tion In Houston last night amid Democratic criticism of his handling of the nation's economy. "This Is good news for the more than 7 million Americans employed In export-related activities," said Commerce Secretary Barbara Franklin. Exports have provided what little strength the economy has shown for the last three years. Analysts have said the recession would have been twice as severe if growth In overseas sales had not picked up part of the See TRADE. 15C.Col.

1 MMoney never goes out of style, but spending it sometimes does. FORTUNE MAGAZINE Failed Calif. REIT may have silver lining Edward Taber, who until last month was T. Rowe Price's fixed-income guru, will take over Legg Mason's asset-management division after Labor Day. If he ultimately succeeds Legg's Chairman Raymond "Chip" Mason, as some predict, Mr.

Taber may look back to the 1990 bankruptcy of a California real estate investment trust as the spark of his recent success. The Prime Reserve Fund, which Mr. Taber Indirectly supervised as head of the fixed-Income division, was one of several Price funds that bought $64 million of debt in Mortgage Realty Trust during the two years before MRT's Chapter 1 1 filing in April 1990. Neither Mr. Taber nor the fund's manager sat on the T.

Rowe Price credit-approval committee that OK'd MRT as a suitable investment. And, by all accounts, the bankruptcy came out of the blue. Still, in the wake of MRT's troubles, the fund's manager was dismissed, Mr. Taber's pay was cut, and he was removed from Price's six-member management committee. The board of directors also authorized an assessment of Mr.

Taber's management of the division "lax" and, though the company did not kick him out the door, several observers agree that his departure was inevitable from that point. Price Chairman George Collins Insists that MRT had nothing to do with Mr. Taber's departure, either from the management committee or from the company. Only the pay cut which Mr. Collins and three other top executives also suffered was MRT-related, according to the chairman.

Mr. Taber, on vacation, said through a spokesman that his departure from Price was unrelated to MRT. And Legg Mason officials say they're happy to have him and that he was wooed by at least two national finance powerhouses but chose to remain in Baltimore. Back at T. Rowe, only one person Is still at the company who sat on the credit-approval committee during the MRT saga: George Collins.

Shelly is Legg man for wealthy investors Legg Mason Is borrowing from Goldman Sach's playbook. Actually, Chairman Chip Mason went out and stole a player from his New York competitor. Last month, Goldman broker Thad Shelly Joined Legg to start a new service strictly for high-net-worth customers, those with at least $10 million to invest, according to an internal memo that Introduced the rest of Legg Mason's troops to Mr. Shelly. (A spokeswoman said the fine details of the program haven't been worked out yet and that the memo shouldn't have been that specific about what constitutes net worth.) By all accounts Mr.

Shelly, 39, Is a talented broker and likely will have a staff of assistants and researchers devoted solely to him. But some of Legg's retail brokers 1 Beginning this week, The Sun is introducing redesigned Business sections that include: New local columns each weekday: today's column Is about banking and finance. Summaries of the day's business news and stock market activity on the back page of this section. More than a page of additional news space. Consolidated stock tables combining the three major exchanges into a single, alphabetized listing.

Options, corporate bonds, commodity futures contracts, corporate earnings, government securities and dividends listings have been eliminated or pared back. These Items can be ordered each day for free from The Sun's new SunFAX service, described at the bottom of Pagel6C. Questions or comments about these changes can be directed to the Business news department at 332-6400 or to The Sun'a reader representative, Ernest Imhoff, at 332-6495 or toll-free at (800) 829-8000. Ext. 6495.

i i Agency chairman who gave city Vharm' retires Joke. He was the guy who caught the flak and delivered the abject apologies that saved his agency after that Incident. The "fun and games affair was only one Incident In a colorful 37-year advertising career that came to an end this month when Bill Evans retired as chairman emeritus of Gray KirkVanSant, one of Baltimore's largest advertising agencies. "At the time, It wasn't very funny for me," said Mr. Evans, 61.

Evans Schnably had to return SETH SCHOFIELD Chairman of USAir Group Inc. ta Air Lines have all criticized the USAir-British Airways agreement. The airlines say USAlr's agreement cedes the British carrier far too much access to U.S. markets without equal opportunities being granted to U.S. carriers to compete In Britain.

American and United have called on the Transportation Department to obtain more route access and other opportunities for U.S. carriers from British aviation authorities In return for U.S. approval of the See USAIR, 15C.Col.5 't fid World's richest people are cutting back spending USAir chairman defends deal with British Airways Other U.S. airlines unhappy with pact By Michael Dresser Staff Writer After a life spent in the advertising business, Bill Evans has only one ad hanging on the wall of his home office on the Eastern Shore. It's a large cartoon with the headline "Suddenly It's All Fun and Games Under the JFX." Anybody who lived In Baltimore In 1987 will remember It.

People all over the city roared as they scrutinized Don Schnably's intricate, detailed cartoon in The Sun and found the tiny drawing of a couple engaged in some particularly explicit "fun and games" on a carousel at the City Fair. Mr. Evans, Mr. Schnably's partner, had nothing to do with the ty provision, which would cover such Issues as the election of USAir officers and the approval of major spending Items. "I Just view that In very simple terms," said Mr.

Schofleld, who is also USAlr's chief executive officer. "If I were making a major Investment, I'd want to have some say In how the funds are being spent." Mr. Schofleld said It would not be in British Airways' best interest to stalemate USAlr's decision-making. He added that as members of the board, the four British Airways directors would have a fiduciary responsibility to act In the best Interest of the majority of shareholders, who would hold 56 percent of USAlr's equity. U.S.

law limits foreign ownership of a U.S. carrier to less than 25 percent of the voting stock and less than 50 percent of the equity. Mr. Schofleld also said the deal would assure the viability of USAir for Its shareholders, employees and the cities It serves. He said USAir could exist without the British Airways deal but that it would have been a "survivor" rather than a "truly meaningful competitor." "This Is an airline that will fly into the 21st century," Mr.

Schofleld said. AMR American Airlines, UAL United Airlines and Del- Associated Press NEW YORK They're not clipping coupons, eating at home more often or trading their Rolls-Royces for Hyundals, but the world's wealthiest people are showing some moderation In this era of fiscal sobriety, Fortune magazine says. In Its 1 992 ranking of the world's billionaires released yesterday, the average wealth of the supremely affluent remained the same as In 1991, $2.7 billion. But in 1991, the average wealth was up by $100 million from 1990. "Money never goes out of style, but spending it sometimes does," the twice-monthly business glossy said in the lead story of its Sept.

7 Issue. The magazine said the many of the richest "seem to be cooling It a bit and turning to other pursuits." For example the sultan of Brunei, a tiny tropical Pacific island-nation sitting on a vast pool of petroleum, remained the richest person on Fortune's list for the sixth straight year with a hoard worth $37 billion. Nonetheless, Fortune said, the Muslim monarch showed signs of financial restraint. He made three trips to Mecca, where prayer takes priority over his favorite pastime, polo. Though he remains the slngle- Reuters ARLINGTON.

Va. Seth Scho-fleld, chairman of USAir Group which Is under fire for a proposed deal with British Airways PLC, says the deal Is the best way to assure the airline's long-term viability. Under the terms of the deal, British Airways agreed to Invest $750 million In USAir In return for 21 percent of USAlr's voting stock and 44 percent of Its equity. The deal Is subject to approval by the U.S. Transportation Department.

Other airlines have assailed the deal, saying It gives a foreign carrier too much control over a U.S. airline. Under the deal, British Airways would appoint four of USAlr's 16 directors. Under a "super-majority" provision, crucial decisions of USAlr's board could be vetoed by 20 percent of its board. Mr.

Schofleld said in an interview this week that British Airways would not be involved in the dally operations of USAir, the largest carrier at Baltimore-Washington International Airport. But he defended the biggest customer of Rolls-Royce, with a fleet of 153 limousines, the sultan reportedly wants to sell some other ostentatious assets. USA Today columnist Dan Dorfman said this week that the sultan was trying to unload his swank Beverly Hills Hotel. No. 2 on Fortune's ranking is America's richest family, heirs of the Wal-Mart store chain's late founder, Sam Walton, with a combined stash worth $24 billion.

But the magazine said Mr. Walton's descendants avoid flashy living Just as he did, renting subeompact cars and staying at budget motels. No. 3 on Fortune's list Is Talki-chiro Mori of Japan, who made the most of his $14 billion in real estate. His wealth actually grew $4 billion since the previous year's survey, despite Japan's economic tallspln.

Still, Mr. Mori, 88. lives modestly and goes to his office every day. He See BILLION. 14C.Col.

1.