The Los Angeles Times from Los Angeles, California on July 13, 2001 · Page 54
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The Los Angeles Times from Los Angeles, California · Page 54

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Friday, July 13, 2001
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C2 FRIDAY, JULY 13, 2001 LOS ANGELES TIMES California IN BRIEF Southland EarlScheibtoShut26 of Its Shops to Cut Costs Earl Scheib Inc., owner of a chain of auto-body paint shops, plans to close 26 of its stores in the next three years as part of an effort to reduce costs. The Beverly Hills-based company will close 41 of its least profitable 155 stores to concentrate on business in California, Arizona and other states where winter weather doesn't keep customers from seeking new paint jobs. The step could eliminate as many as 328 jobs, or 33 of its staff, said Chief Financial Officer Charles Barrantes. The firm's loss in the fourth quarter ended April 30 nearly tripled to $2.7 million, or 63 cents a share, from $931,000, or 21 cents, a year earlier. Earl Scheib's business has suffered as manufacturers use better-quality paint on their automobiles, reducing demand for its services. Earl Scheib shares were unchanged at $2.55 on the American Stock Exchange. Bloomberg News DOE Grants $3 Million to Capstone Turbine Capstone Turbine Corp. has been awarded $3 million by the Department of Energy to develop more energy-efficient power generators. Chatsworth-based Capstone manufactures refrigerator-size mi- Denso to Shut Long Beach Facility, Fire 225 Workers By MARLA DICKERSON TIMES STAFF WRITER Japanese auto parts maker Denso Corp. said Thursday it will move its Long Beach manufacturing operation to Mexico next year and fire 225 local workers to cut costs. The affected facility, known as Denso Sales California Inc., makes tubes and hoses for vehicle air conditioners and builds portable industrial air conditioners. The planned cuts represent 2 of the company's North American work force, according to spokesman Mark Jonas, who said the company is under pressure from customers to slash costs. Denso supplies auto parts to every major auto maker. Its principal customers in North America are the Big Three auto makers and Japanese transplants. Its majority shareholder is Toyota Motor Corp. "We have been faced with some fairly severe requirements ... to Delivery Workers Settle Overtime Suit for $8 Million The people who deliver Spark-letts and Alhambra bottled water in California settled a class-action overtime lawsuit with their employer Thursday for $8 million, including attorneys' fees and costs. The case is one of hundreds alleging California employers are cheating workers out of overtime. In this case, more than 800 delivery people alleged they were improperly classified as salespeople and wrongly exempted from overtime pay. Under the settlement, more than 700 delivery people will receive 6.6 of their total earnings between April 1996 and April 2000, when the first of two lawsuits was filed, said Dennis Moss, the lawyer I HEARD A RUNOR THAT THERE NIGHT BE LAYOFFS ON FRIDAY. IS IT TRUE? ABSOLUTELY NOT. NOWAY. NOPE. NEGATORY. NO, NO, NO, NO, NO. Times Business News on the Radio Get up-to-the-minute reports on the markets, entertainment kfwb15 00 Angeles (ftmeg , - - - n il croturbines that produce 30 to 60 kilowatts of electricity enough to power a fast-food restaurant, a hotel or a small office building. The DOE grant will fund research to develop a generator that can recapture its discarded heat and use that energy for climate control inside office buildings, company spokesman Keith Field said. The DOE handed out a total $18.5 million to various companies for similar generator projects. Honeywell International Inc. received the largest grant at $4.2 million. Capstone stock was unchanged at $19.05 on Nasdaq. Sam Kennedy Watson, Glaxo Reach Deal in Patent Suit Watson Pharmaceuticals Inc. said it settled a patent-infringement lawsuit with GlaxoSmith-Kline, which had accused it of infringing patents on the British drug maker's Wellbutrin antidepressant Glaxo sued Corona-based Watson in December 1999 and February of this year for allegedly infringing its patents by seeking U.S. regulatory approval of a generic version of Wellbutrin before the patents expired. Watson disclosed the settlement in a Securities and Exchange Commission filing. Its shares rose $1.09 to close at $61.53 on the New York Stock Exchange. Bloomberg News reduce costs as much as 30 over the next few years," Jonas said. "Our profit margins here are fairly low, so we needed to look at alternative locations." Denso will shift the manufacturing of its air-conditioning products to Frontera, Mexico, where it is building a new facility projected to employ 400 workers. Jonas said the layoffs are expected to occur next April but that the company will retain 225 sales and distribution workers at its Long Beach facility. He said fired workers will be given outplacement assistance as well as three weeks' severance pay for each year of service. He said the average Long Beach manufacturing employee has been on the job for 10 years. Denso is based in Tokyo and employs 85,000 worldwide. Southfield, Mich., is its headquarters in North America, where it employs 13,000 people at 21 locations. who represented the workers. Under California law, businesses may avoid paying overtime to workers who spend more than 50 of their time selling, Moss said. Danone Waters of North America Inc., a Pasadena-based firm that owns Sparkletts and Alhambra, issued a statement Thursday, saying, "We believe settling the lawsuit was in the best interest of the company and the employees." The company also said that shortly after the first lawsuit was filed, it converted several types of positions to nonexempt status subject to overtime premiums and began paying the deliverers hourly wages. Lisa Girion DILBERT GREAT. CAN I TAKE OFF FRIDAY? rAONDAY WOULD BE BETTER. industry, Southern California business and other news that affects your job, company and personal finances on the KFWB-Los Angeles Times Noon Business Hour, every weekday on KFWB-AM (980). V n i -iTfi i --niiiT Enron Reports 40 Energy: Sales nearly-double in North America and rise fivefold in Europe compared with the year-ago quarter. From Bloomberg News Energy trader Enron Corp. said Thursday that second-quarter profit rose 40 as its sales of natural gas and electricity surged in California and elsewhere. Net income rose to $404 million, or 45 cents a share, from $289 million, or 34 cents, in the year-earlier period. Revenue almost tripled to $50.1 billion. The Houston firm sold almost twice as much power in North America and five times as much in Europe as it did in the year-earlier quarter. The company was expected to earn 42 cents. Though the prices of electricity and natural gas have soared in California over the last year, Enron Chief Executive Jeff Skilling contended that the state "is just not a big factor" in Enron's increasing profit. The company boosts earnings by increasing sales of energy and other commodities such as lumber and steel rather than by raising prices, analysts said. But Enron's stock has fallen about 30 in the last year. Skilling said the political rhetoric surrounding the California energy crisis, and negotiations over possible power- ,tc' . J" KIRK McKOY Los Angeles Times The 264,474-square-foot Glendale Fashion Center has been sold for $57.2 million. Glendale Fashion Center Sold to Encino-Based Investors Real estate: The $57-million sale is part of a recent trend away from public and institutional buyers. By JESUS SANCHEZ and ROGER VINCENT TIMES STAFF WRITERS The recently renovated Glendale Fashion Center has been sold for $57.2 million to a family business based in Encino. The sale is part of a string of recent deals that illustrate the bigger role private investors are playing in the commercial real estate market after years of being pushed aside by public and institutional rivals. "It's the return of the private investor," said Cushman & Wakefield Inc. broker Carl Muhlstein, who was involved in several recent deals where private investors came out on top. Glendale Fashion Associates LLC, which is headed by Marianne J. Moy, beat out bidders SAG President Won't Seek By JAMES BATES and CLAUDIA ELLER TIMES STAFF WRITERS Screen Actors Guild President William Daniels confirmed Thursday that he won't seek a new two-year term and will instead endorse actress Valerie Harper for the job. In an interview, Daniels, 74, said he chose to wait until now to make the decision public because he wanted SAG to conclude its negotiations on a new contract with Hollywood studios. "This is not a career job for me," Daniels said. "When I took the job on, I said I'd give this two years of my life, which I did." Harper could not be reached for comment, but Daniels confirmed she submitted her name this week to SAG's nominating committee. Best known for starring in the TV series "Rhoda," Harper is in New York rehearsing to take over for I r - -i I- - hnnnnm Flagging Energy Enron's stock has lost about 30 of its value over the last year despite steadily increasing profit and sales of electricity and natural gas. But the company's broadband business has been lackluster. Thursday: $49.55, up 45 cents $90 60 50 40 Enron, monthly closes and latest on the New York Stock Exchange :. Ill II II J ASONDJ FMAMJ J Source: Bloomberg News cost refunds, have hurt the stock price. "All this noise from California has obscured the performance of the company," Skilling said. California is seeking $8.9 billion in refunds from Enron and other traders and generators for power bought in the last year. Skilling said that under the formula used by California to derive that figure, Enron is owed $44 million because it bought more power than it has sold since May 2000. On Thursday, Enron shares rose f Jim- A y x Tsui h 2f W 77.1 - ' rmamll mstfrtfl: . "'' that included institutional firms to purchase the nearly nine-acre, Glendale Fashion Center from a partnership of Vestar Development Co. and Lend Lease Real Estate Investments. The 264,474-square-foot complex on Glendale Boulevard at Wilson Avenue is fully leased to Ralphs supermarket, Longs Drugs, Barnes & Noble, Nordstrom Rack and other national retailers. "Very often now sellers are starting to pay attention to private investors," said Randall Lee, president of Lilly Enterprises Inc., who represented the buyer. "This is an example of a private investor off the radar screen who had the ability to properly evaluate a complex real estate investment opportunity and had the sophistication to do a transaction." Real estate experts said sellers prefer to deal with larger and well-known real estate investment trusts and institutional investors before considering a more obscure private bidder. "It's all about credibility and relationships," said CB Richard Ellis broker Hamo Rostamian, who also represented the buyer of Linda Lavin in the Tony Award-nominated comedy "The Tale of the Allergist's Wife." Daniels' choice to go public with his decision comes after actress Melissa Gilbert became the first high-profile member to announce her intention to seek the position. Others running include members Eugene Boggs and Angeltompkins. Ballots are expected to be mailed in October, with results announced in early November. Daniels was drafted to run for the presidency two years ago by a group of dissidents at odds with then-President Richard Masur. During the campaign, Daniels pledged to take a tougher stance during negotiations. Daniels led SAG on a controversial six-month strike last year against advertisers. During the strike, he frequently came under fire from critics inside and outside the union who believed a settlement could have been reached sooner. r-i-ii- t - A WT444UU r , 1 MM 1 IVA r i 'Tf Increase Enron CEO Jeff Skilling says that despite California's energy woes, the state "is just not a big factor" in the firm's rising profit. 45 cents to close at $49.55 on the New York Stock Exchange. Investors question whether Enron can continue to post huge gains in sales in its energy and commodity businesses, analysts said. Also, its broadband telecom business has k, ' V i m tmm nml inff WS I It- -'J Glendale Fashion Center. The seller was represented by Larry Krasner of InsigniaESG Inc. But the slowing national economy finds many of the large REITs and institutional investors reluctant to enter the market as rents and values peak. Some property types, such as suburban office parks and hotels, have fallen into disfavor with buyers who must answer to shareholders and clients. Also, larger REITs and pension funds tend to buy entire portfolios and companies instead of individual buildings. As a result, current conditions give private investors more opportunity to strike a deal with sellers of small and mid-size properties, according to brokers. "Because the opportunity funds, REITs and all-cash buyers are not in the market right now, it makes room for the smaller guys," said commercial real estate mortgage broker Paul Brin-dley at Holliday, Fenogllo, Fowler. Many owners "are selling suburban office holdings, which is creating buying environments for private investors," Muhlstein said. 2nd Term SAG statistics show that in the wake of the strike, earnings by actors from commercials have dropped by at least $100 million. But Daniels insists the advertising contract won hard-fought gains in payments to actors, adding that the separate contract SAG members are expected to ratify with studios also will put significant money into the pockets of journeymen actors. SAG's Eastern directors voted unanimously late Thursday to approve the contract. Daniels has had a long career as an actor, with key roles in such films as "The Graduate," "A Thousand Clowns" and "Reds." He won best actor Emmys for playing Dr. Mark Craig on "St. Elsewhere." Daniels plans to move to Santa Barbara, where he and his wife, actress Bonnie Bartlett, have a home. He said he has no plans to retire. "Actors never retire. Your phone just stops ringing," Daniels said. . . . . . ..-...At jkjmo m . in Profit ft X ; - r' I Associated Press been lackluster, and the unit lost $102 million in the second quarter, compared with an $8-million loss a year ago. Enron said it is firing broadband staff to reduce costs. ' Enron was expected to make. 42 cents a share in the quarter. , Districts t to Plot Economic Strategy Development: East, northeast L. A. are latest to start crafting plan. Millions in federal grants are at stake. By LEE ROMNEY TIMtS STAFF WRITER More than 120 residents, business owners and elected representatives for East and northeast Los Angeles gathered in Eagle Rock on Thursday to begin crafting a comprehensive economic development strategy for the region. Los Angeles must complete the plan to cash in on millions of dollars in potential grants from the Department of Commerce's Economic Development Administration. The process is expected to take four months. The eastern and northeastern communities include some of the city's most neglected Boyle Heights, El Sereno, Glassell Park, Cypress Park, Lincoln Heights, Highland Park and Eagle Rock among them. But they also offer valuable resources including a large work force and momentum from several developments now underway, said City Council officials who attended the event. "We have a multimillion-dollar Blue Line being developed, as well as the whole East Los Angeles Sears Tower complex and Taylor Yard," Councilman Ed Reyes told the crowd. "We have many opportunities in the form of catalysts. The question is: Are we prepared to take advantage of them?" The region has suffered plenty of bruises. Over the last decade, it has lost as many as 13,000 jobs, partly because of the exit of national retailers and some transportation employment centers. In addition, stricter air quality rules and other changes chased out some manufacturing, said David Wilcox, senior vice president of Los Angeles-based Economic Research Associates, which is helping to craft the strategy. But Wilcox said those figures aren't bad when compared with some of Los Angeles' other neighborhoods. Downtown, for example, lost 53,000 jobs and South Los Angeles lost 30,000, he said. The eastern and northeastern communities are the fourth city region to begin crafting the mandated strategy. Downtown, the Valley and South Los Angeles are finished. Hollywood still must complete one. The plans eventually must be approved by Mayor James K. Hahn and the City Council before being submitted to federal officials, said Ralph Carmona, economic development specialist for Barrio Planners Inc., which received . an $80,000 city contract to put together the eastern and northeastern strategy. Among the themes to be explored: how to lure industries with good jobs to the region and train the work force for those jobs.

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