Star Tribune from Minneapolis, Minnesota • Page 37

Business I Up 24,21 jlVHF- February 161994 Health euro Column six VI II icrGssGs prS6nc6 in South i iraiuiwaic ii Minnetonkafirm buying Florida's Ramsay-HMO Inc. United Healthcare Corp. goes shopping of HBlthCr HMO purchases over the By Glenn Howatt 1m mm it shock German automaker attempts to prepare workers for move to rural Alabama price was partly caused by bricks and mortar. With the Ramsay purchase, it will be buying clinics, which were not involved in the Chicago HMO purchase. The Ramsay deal is United's second purchase of an HMO firm in the Southeast A month ago, the Minnetonka-based health care management firm said it would buy Complete Health Services based in Birmingham, which has health maintenance organizations serving seven Southern states.

That deal is still pending. Koppe said the two deals aren't the result of a company strategy toward that region. Instead, both companies operate in markets that are relatively underpenetrated in managed care, which makes them attractive buys, he said. Koppe said both transactions will result in charges to second-quarter earnings, but the size of those charges has not yet been determined. The Ramsay HMO differs from most other HMOs United has bought or operates because it is a staff model plan, meaning the HMO employs the doctors it uses, rather than contracting for their services.

"They operate a very good staff model in that market and we'll be able to United continued on page 6D Staff Writer United HealthCare Corp. continued its march through the South with Tuesday's announcement that it will buy Ramsay-HMO which serves Miami, Fort Lauderdale and Palm Beach in Florida. The stock deal is valued at about $507.4 million. The Ramsay deal would be United' most expensive HMO purchase to date, even though Ramsay's enrollment is slightly less than half the size of HMO Illinois, a Chicago-based HMO that United bought in August for $394 million. David Koppe, United's vice president and treasurer, said the increased I HMO I No.

of I Purchase Date Headquarters members price Pending Ramsay-HMO Inc. 172,000 $507 Coral Gables, Fla. Pending Complete Health Services Inc. 240,000 207 Birmingham, Ala. Aug.

1993 HMO Illinois 300,000 394 Chicago Jan. 1993 Western Ohio Health Care Corp. 185,000 100 Dayton, Ohio Jan. 1992 Physicians Health Plan ol Ohio 154,000 84 Columbus, Ohio Aug. 1991 Ocean State Physicians Health Plan 136,000 26 Warwick, R.I.

"You want to reduce those slightly awkward moments when there's a bit of a'' culture gap." Steve Cannon, U.S. marketing executive By Rick Atkinson Washington Post Stuttgart, Germany Airlines Summary lhey haven't picked up Southern drawls vet or started servina ffrits in the corporate cafeteria, but employ ees at Mercedes-Benz AG are learn Federal officials award contract for new courthouse A monumental new federal emirthnuce HAcionivt ku Ci ing to speak 'Bama. With less than a month to go before groundbreaking on a $300 million William Pedersen will nse across from Minneapolis City Hall beitinnina una apmig. i ik iiuiuun contract 10 aesign ana ouiid the court- Northwest and KLM seek to lure travelers with new business class Marketing effort aimed at transatlantic passengers nouse the most significant local building of the decade beat out at least One less-exnensive hrnnncal hmniA foHaral nffiioi. r- i ivuvini uiiiviaia aaiu, 11 offered the greatest value.

The General Services Administration, the auto plant in Vance, Ala. (population 350), Mercedes not only is designing a new car and a new factory but also is preparing executives for the cultuf-al upheaval of moving from urban Germany to the rural American ftimii itutiai uiai manages government property, announced the decision and unveiled the design to a crowd of local officials including federal judges who will move to the building from the present cramped facility. The development team is headed by an affiliate of BPT Properties of Washington, D.C., and includes Kohn Pedersen Fox of New York Citv as lead architect and the Alliance nf Mln.a,i;. South. About 40 German engineers arid managers, along with their families', are assiduously studying the strange v.

aa associate architect. Page 1A. U.S. takes first step toward tariffs against Japan The Clinton administration accused Japan of a "clear-cut and serious" violation of a cellular phone trade agreement and took the first step naoits ot the strange land they will soon call home. During seminars at a Mercedes retreat in the Black Forest; they have discovered that their new American neighbors call perfect strangers by their first names, insist on keeping their office doors open By Neal St Anthony Staff Writer New York, N.Y.

Northwest Airlines and its foreign partner Tuesday launched the most significant marketing effort in their five-year relationship: an international business class aimed at lucrative business travelers. Northwest and KLM Royal Dutch Airlines have dispensed with traditional first-class service on all but some of their long-haul flights in favor of a new business service. The new seating plan, called "World Business Class," offers nearly as much seating space, in-seat televisions, fine dining and other amenities at about half the cost of first class. Toon Woltman, KLM Royal Dutch Airlines vice president for North American operations, said there are fewer business travelers willing to pay $3,200 to fly first class between New York City and Amsterdam for "a little more room and extremely expensive champagne." "That service has disappeared on KLM since November, he said. Instead, Northwest and KLM, which jointly schedule and market flight operations to 350 cities in 80 countries, will have 20 percent more World Business Class seats than first-class seats.

It will charge about $1,900 for the New York City-Amsterdam round-trip flight "We are guessing there will be a number of our coach passengers who are willing to pay the difference for the new business-class product," Northwest Chief Executive John Dasburg told a group of New York travel executives and the press. In an interview, Dasburg said that passenger loads in first class have been "relatively low, and a lot of people in first class are flying on discounted tickets. We didn't manage itwell.1' Moreover, fewer companies are willing to let even top brass fly for four NWA continued on page 6D luwaiu iiupuMug muiions 01 aouars 01 punitive tantts. U.S. officials made clear that the retaliation planned in the telephone case was just the first in a series of hard-line actions that could be taken after the breakdown of market-opening "framework" talks Friday.

U.S. Trade Representative Mickey Kantor refused to discuss what other retaliation was being contemplated but he left no doubt that the administration planned to keep pressure on Japan to lower its $60 billion trade surplus ana navent a clue about pubue transportation. iui mc uiiiicu ouues. rage m. With help from some native Alabam- lans, flown to Stuttgart for a "crossJ Viacom seals victorv in takeover battle for Paramount cultural encounter group, the Ger Viacom Inc.

clinched a hard-fought victory Tuesday for Paramount mans also are learning such key local lAiiuuiuuikaiiuiis scnumg nvai suitor uvl NetworK inc. to deteat f. i oiici a iivc-iiioiiui orawi. uui viacom, a caoie cnannei operator, now faces more nrohlems company while completing a planned merger with video retailer Block- Gaming Medical seed-capital firm thrives bv havina a focus ri it.m.:-.. i i.i- 0.

vnm uumy over neaun-care reiorm nammerea medical stocks last year. And lengthy delays in FDA flnnrnvnl havp tha nam avir Grand Casino's annual revenues soar with opening of casino in Mississippi 2S tence of some high-tech medical companies. Nevertheless, Medical Innovation Partners, a i r- gWI 1 11 accu-capnai lirm specializing in rXSTi medical devices, appears to be thriving. The mmiIhmJ kev: a focus on technnlnov that nrnmicoc Inuer cents per share. There are 22.275 DickYoungblood costs and better patient outcomes.

Paae 2D. construction or in development, including one in Tunica County, two in Louisiana, one in California and one in Las Vegas. 4th Qtr. pet 12 1993 1992 chng. WINDOW ON THE MARKETS Feb.

15, 1994 By Josephine Marcotty Staff Writer Grand Casino Incorporated's new casino in Gulfport, boosted the company's annual revenues by almost $100 million, contributing to a six-fold increase in net income, the Plymouth-based company said The combined operations of the Gulfport casino, which was open for 7'i months in 1993, and the company's Biloxi, casino, which opened Jan. 17, are expected to add a total of $300 million in revenues to Grand Casinos in 1994. For the year ended Jan. 2, Grand Casinos reported total operating revenues of $117 million, up from $9.2 million in 1992. Net earnings rose to $18.7 million, or $1.06 per share, up from $2.7 million a year ago, or 20 muuon snares outstanding.

Income included a fourth-quarter gain of $2.9 million, or 16 cents per share, from the sale of a portion of the company's stock in Casino Data Systems. Net income in the fourth quarter rose $8 million to $7.7 million, or 34 cents per share, compared with a loss of 3 cents per share for the year-before period. However, on an operating basis, excluding the gain from the sale of Casino Data Systems stock, net income was $4.7 million, or 21 cents per share. In addition to the casinos in Mississippi, the company manages Grand Casinos, Hinckley, and Grand Casinos, Mille Lacs, for the Mille Lacs tribe of Chippewas. Grand Casinos has five additional properties under flwenue $426 $1.4 2987 OpsNet 4.7 (0.3) Xtr 2.9 g.itf-S Net 7.7 (0.3) NtShr jWfgM (.02) I SffS Year End Revenue $117.0 $92 1188 OpsNet 1S.8 2.7 485.2 Net 18.7 2.7 592.6 NetShr 1.06 .20 430.0 1 lNBlfi 1 1 4-iLMMi Oose24.2ito 3923.27; 0.62 4000-: swt jj bja tasooj jL 3850' 1 I jllpll f3800! EiZE 'MS I 3650 3600i iHIII f3K0 I I fr 'a V- 1 Last Nat Pet iChrnmed 28'4 2'4 8.7 IQSteaks 5'A 7.7 1 UltraPc 7'2 V4 7.1 Losers 1 IntlGame 5'e I i Regit 12 i SunLeas 6Va -5 8 tMost active -1 Vol.

(000) urn Net ContrlDt 1180 9H Vs I GrdCasna 839 28V4 1 Lasrmastr 619 18 Gain from sale of Casino Data Systems stock. Figures in millions except for earnings per share. Figures in parentheses are negative. Jan. Feb.

WThiFWrj Exercise firms Dollars pen'roy ounce, i N.Y. Commodity Exchange idioms as -yau" ana "howdy." And they now know that "Crimson Tide" is not an ecological disaster. "It's those little things that can cause small cultural rifts. The question is; how can we minimize them?" said Steve Cannon, a U.S. marketing ex-' ecutive for Mercedes involved in the new plant.

"You want to reduce those slightly awkward moments when there's a bit of a culture gap." vn Roland Folger, who will move to Vance this year as head of sales and marketing for the new car, added: "We don't want a German enclave in Alabama. We want a real cultural mixing." ri Such efforts reflect both Mercedes "globalization" strategy of building vehicles where the markets are and the increasing inclination of German manufacturers to escape the crushing cost of doing business in Germany by moving abroad, cultural challenges notwithstanding. -v At an average $23 an hour for wages' and benefits, German labor costs are the highest in the world, far higher than the $15 average in the United States. A survey of 10,000 business-" people in November by the German Chamber of Commerce and Industry indicated that 30 percent of those-polled are considering shifting part of their production outside Germany. In Europe's automobile industry, suffering through its worst slump since' World War II, that migration has begun in earnest.

German automakers are about two-thirds as productive as their U.S. counterparts wheni measured in terms of output per hour worked, according to a recent study by the management consulting firm1 McKinsey and Co. Inc. Lured by relatively cheap U.S. labor and a new respect for the prowess ot American workers, BMW is prepare ing to open a plant near S.C.

Mercedes has followed suit withi its Alabama factory, scheduled to be- gin turning out 60,000 "sport-utility" vehicles a year beginning in 19974 Currently, only 2 percent of the more, than half-million Mercedes sold an nually worldwide are assembled out" side Germany, but the company ex pects that to grow to 10 percent in the next few years. The choice of Vance, announced Sept. 30 after an eight-month search, "was a big surprise for all of us," said, Andreas Renschlcr, 36, who headed the Mercedes site-selection team and-will run the new factory. "When you think about Alabama, well, what do-you think of? Even when you ask a lot of Americans they say, Oh, God." But then you ask them if they know Alabama, and they say no." Mercedes figures the cost of buildingj the car in Vance will be about 30i percent lower than it would be in, Germans continued on page 4D 'tt 4401 I 7.5 Yesterday 1 7.0 1 week ago 1 ft NordicTrack Inc. and Solof lex both claim victory in court decisions over their advertising dispute 430 li Ji iii i 1 i if1' if.

u.sj an wmnui ago 6.0 I I Pi i ii ri 410 SJS 1 50 I- 3. I 390 45 I .5 380 as XZ21Z2 36(1 3.0 a. I 2.5 i 1 I 330, 420 410 1 400 i 370 3) 350 34() 330 To sell "short" is to borrow stock from a brokerage and sell it in the ooen market. The bet is that the nrice 1 1 1 1 nues exceeding $426 million. NordicTrack had produced home fitness machines that simulate crosscountry skiing before it began marketing a strength-training machine called the NordicFlex Gold in 1991.

will plunge, allowing the trader to ULUJ i a a 7 10 30, mo. yr. nov. oec. jan.

hen, i winF repay me loan later witn snares purchased at the new. lower nrire and J.I 5y(ema. keep the difference. The shorts get squeezea wnen tne price ot the stock moves up sharply and they have to buy in a rising market to Looking ahead cover tneir positions. TODAY Dorfman said that there is a short position of 7.9 million shares and MONEY magazine releases its annual "Americans and their Money" that Sands Bros.

which owns 1.5 million CML shares, predicts By Josephine Marcotty Staff Writer NordicTrack Inc. and Soloflex both have claimed victory as a result of court decisions in an advertising dispute. A federal magistrate issued an injunction Friday preventing NordicTrack, based in Chaska, from referring to the price of a Soloflex strength-training machine in a NordicTrack "infomercial," and denied it the right to use a drawing based upon a famous Leonardo da Vinci illustration that Soloflex also uses, NordicTrack prevailed on four other issues in the dispute, and claimed that the decision by U.S. Magistrate John Jelderks was a major legal victory. Soloflex, however, also claimed victory because NordicTrack was banned from using the infomercial.

Soloflex, founded by Jerry Wilson, is based in Hillsboro, Ore. It has sold about 450,000 strength-training machines since entering the home fitness market in 1978, with total reve- those short positions will be under pressure when the company reports better-than-expected second-quarter pon. Housing permit figures for January are released. LATER THIS WEEK Thursday The consumer nrire inHen fnr lanunrv onH the rVivmhar muf.Un. earnings March 2.

The two companies had filed suits and countersuits in federal court in Oregon and Minnesota before the cases were consolidated in U.S. District Court in Portland in November. Soloflex had claimed in a $25 million suit last April that NordicTrack copied a Soloflex advertising campaign, making false and unfavorable comparisons. NordicTrack responded in May with its own suit alleging false advertising, unfair competition and product disparagement. The stock of NordicTrack's parent company, CML Group rose 7.6 percent to $21.25 Tuesday, for reasons unrelated to the company's legal dispute with Soloflex.

Dan Dorfman, CNBCi financial correspondent, reported a money manager's prediction that "the mother of all short squeezes" soon will affect the price of NordicTrack's stock. Sands exoects the company to earn WW. 1 1 1 'J. 1 IIIWIVI1MII dise trade figures are released. Consumer prices rose 0.2 percent in $1.40 per share in 1994 and $1.75 in Lctcmucr; me iraue ucncii was iu.z oillion in INOvemoer.

1995. The company said it is comfortable with predictions in the $1.30 range for 1994. The Associated Press and the Dow Jones News Service contributed to Index Earnings 2D Mutual funds 6D For executives only 2D Regional briefs 3D For your information 4D Markets update 4D this report..