The Los Angeles Times from Los Angeles, California • Page 344

B2 FRIDAY, SEPTEMBER 20, 1991 5D LOS ANGELES TIMES Companies Increasingly Turn to Auction Block Steve Trotter submits bid Thursday for electronic equipment. Photos by DAVE GATLEY Los Angeles Times Auctioneer Ross Dove points to a bidder, signaling that a sale is final during General Dynamics' auction. liquidating firms. Auctioneers also are working to eliminate the widespread belief that auctions are only for "distressed" companies, said Steve Comly, chairman of the Certified Auctioneers Institute and vice president of William P. Comly Sons, a Philadelphia-based auction company founded in 1834.

The "stigma" surrounding auctions is gradually changing as "more and more Fortune 500 companies discover auctions as a smart business decision," Comly said. And, as Steffes noted, even the federal Resolution Trust Corp. "is seeing that auctions work, both in rising and falling economies." Auctions are particularly well designed for the kind of older equipment and raw materials that General Dynamics offered for sale Thursday because competitive bidding quickly sets a fair market price for even the most obscure items, auctioneers said. "Everybody knows what something costs new," Steffes said. "But nobody knows the value of used.

What is the value of a 15-year bld Caterpillar tractor or a 10-year-old crane an auction tells yjou that value almost millions of unused parts from the company's Electronics, Convair, Space Systems and Data Systems divisions. Auctioneers caution that auctions aren't a suitable tool for the disposition of every unneeded asset. Much of what fills corporate America's garages continues to be sold through "tag sales" or through garage workshop. Miller, who had set $200 as his absolute limit, seemed confident that he would find the right piece of equipment at the right price. At the high end, buyers paid hundreds of thousands of dollars for tons of raw materials, aging machine tools, a wide range of outdated computer equipment and Business: Process allows General Dynamics jtD unload unneeded Equipment quickly and for ijash.

fly GREG JOHNSON JtMES STAFF WRITER -Shortly after the auctioneer -closed bidding on Item 43 during Thursday morning's auction at a San Diego hotel, Tonv Hartford anded over a deposit and walked f.irut the door with a receipt for a piece of used electronic equipment. rent these things out to peo-'jie," said Hartford, a Santa Barbara resident who paid $630 in cash the power source that previ-hiisly was owned by General Dy-Tiamics' electronics division. "It cost me about $3,000 new -loday. I got a good deal." -I Hartford was glad to have the iised equipment. But General Dynamics, which authorized the auction, was equally happy to have Hartford's cash.

The company won't discuss specific numbers, but the auction at the Sheraton Harbor Island Hotel, along with recent auctions in Pomona and Ft. Worth, generated millions of dollars in gross revenue for General Dynamics, which is trying to trim operating and maintenance costs as its Stream of Pentagon dollars slows. With the recent auctions, General Dynamics joined the growing ranks of corporations that are finding auctions a fast and relatively inexpensive way to move excess and surplus assets out the door. Auctions have long played key i'oles in the agriculture and livestock industries. Some corpora-; tipns, including Black Decker, General Motors and Campbell ISbup, have long used auctions to outdated inventory and assets into cash.

IWalt Disney World is one of a of companies to have a staff auctioneer who supervises the Sale of excess equipment and inventory, including cars, trucks and restaurant equipment. Auctions at "Orlando-based Disney World can generate up to 50 more revenue Ihan the use of liquidators or sealed ItMs, according to Don Shearer, bjsney World's auctioneer. 1- Auctions are gaining in popularity among corporate customers because companies "can sell items at a given date in time for cash and ichow that it's going to be gone," 9id Ken McCormack, president of San Diego-based McCormack Auction Co. can sweep the floor and jblose the door," McCormack said, 'jit's not like using a piecemeal liquidator, which can go on for Jnonths. And you know that every jfcm goes to the highest and best Jjd, in cash." Auctioneers are hesitant to estimate the value of inventory sold by iprporations through auctions each "year.

However, the dollar volume of residential, commercial and agricultural real estate sold in auctions during the past decade has grown to $26.5 billion, up from $10 billion in 1980, according to figures sup- M(sy JirB (SaiirdleirDeirsS plied by the Gwent Group, a Bloomington, consulting firm. Although public awareness of auctions has grown in recent years, auctions "have been a pretty well-kept secret as far as the general public is concerned," said Bob Steffes, a Fargo, N.D.-based auctioneer who serves as president of the National Assn. of Auctioneers. Auctioneers are bolstering public awareness of auctions by dramatically increasing their advertising and marketing budgets, said Richard Rubenstein, a vice president with Ross-Dove, the San Francisco-based company that is running General Dynamics' auctions. Ross -Dove, which created slick, four-color brochures for General Dynamics' San Diego auction, also advertised heavily in newspapers and used its own, proprietary mailing lists to draw customers.

Among the more than 500 bidders at Thursday's auction were representatives of the nation's largest liquidating firms and first-time buyers. They were attracted by an auction catalogue that included everything from Apple II computers and office desks to thousands of pounds of titanium and a $2-million robotics assembly line. Bruce Miller, a San Diego-based General Dynamics employee who was attending his first auction, bid on several oscilloscopes for his Win D(f For the Record Body mlsldentlfled A body found Wednesday in a car in Mission Hills was incorrectly named in a Thursday article as being that of David Lodge. David Lodge is the investigator from the county medical examiner's office who is looking into the death. The body found was that of Lance Penny, a 29-year-old man from San Diego.

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