The Evening Sun from Baltimore, Maryland • 35

THE SUN, Friday, July 9, 1982 C7 Grand Prix is added to line at GM plant here Business World By Ted Shelsby In mid-August, Pontiac production is expected to account for about 40 percent of the plant's total output. Concerning the visit of Mr. McDonald, GM's president, Mr. Summers said it is "a routine visit. He visits all the assembly plants once a year and this just happens to be our time." He said he did not anticipate any announcement by Mr.

McDonald concerning the future of the Baltimore plant. Two years ago this month, GM announced plans for a multi-million-dollar renovation and expansion of the Broening highway facility that would have enabled it to build a new front wheel drive car for the 1983 model year. Under the original schedule, that expansion would now be nearing completion. Unfortunately, work on the project was halted last September and GM has since said it could not say when, or if, the reno See PONTIAC, G-series for both Chevy and Pontiac. It diversifies our product mix and gives us a better chance of building something that is selling well." According to Mr.

Summers, the first of the first two-door Grand Prix sedan is expected to roll off the line here on about September 7. This would mean the car would be built for the 1983 model year. The plant closes on August 10 for changeover to 1983 output which begins on August 16. With the introduction of the Grand Prix, the plant's production will consist of approximately 60 percent Pontiac and 40 percent Chevrolet on a one shift basis, Mr. Summers said.

When the plant first began building the Pontiac Bonneville on June 21, the production rate was only IV2 cars an hour. A week later output was doubled to three units per hour. GM officials and leaders of the United Auto Workers union. "While this does not mean an emr'ny-ment change at this time it, hopefully, could lead to something down the road," said Jack R. Summers, personnel director at the plant.

"It's definitely good news," said an official of UAW local 239 who has served as an official spokesman for the union in the past, but asked yesterday that his name not appear in print again "until we formerly recall the second shift or this plant shuts down completely." The UAW executive explained that addition of Grand Prix output along with Bonneville output that began last month, gives the Baltimore plant the entire Pontiac G-line of cars. "We are already building the Chevrolet G-line with the four-door Malibu Classics and Monte Carlos. This gives us the full General Motors Corporation announced yesterday that later this summer it will add the Pontiac Grand Prix to the line of cars assembled at its plant on Broening highway. In making the announcement, which comes on the eve of a visit to the plant by GM's president, F. James McDonald, plant officials stressed that the production shift would not involve the recall of any urloughed workers.

Approximately 3,500 autoworkers are currently on layoff. Of this number, about 2,300 have been off their jobs for more than two and a half years. Although it will not involve a major recall of employees, the shift of Grand Prix production here, the second Pontiac product to be added to the line since June, is seen as a favorable development by both IRS ruling sets back 'universal life' policies Ford omits payout again Detroit (AP) Ford Motor Company has decided not to pay a third-quarter dividend. The No. 2 U.S.

automaker has not paid quarterly dividends since the fourth quarter of last year, when it paid 30 cents a share. This marks the third time since the company went public in 1956 that Ford will not pay a dividend. Ford spokesman Edward G. Snyder said the move was a "continuation" of the board's decision in January not to pay because of the troubled economic times in the U.S. auto industry and at Ford.

The automaker lost $1.06 billion last year and $355.4 million in the first quarter of this year. Analysts said omitting the dividend helps the company conserve cash and that the move had been expected. Suburban earnings climb Suburban Bancorp reported yesterday that its second quarter earnings this year were the highest for any quarter in the company's history. Income before securities transactions amounted to $5,204,000, or $1.09 a share, compared to $4,443,000, or 93 cents a share, for the second quarter of last year. Second quarter income after securities transactions amounted to $4,967,000, or $1.04 a share, compared to $4,246,000, or 90 cents a share, for the same period in 1981.

For the first six months of the year, Suburban reported income before securities transactions of $9,838,000, or $2.07 a share, compared to $8,602,000, or $1.81 a share, for first half of 1981. Net income after securities transactions amounted to $9,517,000, or $2.00 per share, compared to $8,276,000, or $1.75 a share, for the first half of 1981. Suburban reported it reduced its provision for loan loss reserves by $979,000 for the quarter and by $2 million for the first half of the year. Suburban's total assets were $1.7 billion at June 30, an 11.2 percent increase over the same period last year. Loans were $846.4 million and deposits totaled $1.3 billion at the end of June.

From Wire Services tfr'" ik IRS that he doesn't use his car for work, and wants the IRS to tell him that he can't take a deduction on the use of his car," said Mr. Disharoon. At the moment, the welter of private rulings on universal life policies has muddied the waters, but Mr. Disharoon noted that there is legislation wending its way through Congress that could settle the tax question. "This is not something that is just being talked about.

There is a bill and it is part -of the tax package that Senator Robert J. Dole Kan. has put Mr. Disharoon noted. He said the bill would be enacted, soon because, in his opinion, the administration needs the revenues the bill would gener-' ate.

"I know the government needs the $2.5 billion that the life insurance industry will pay under this bill," he said. As the legislation is presently constructed, both stock and mutual life insurance companies would be able to sell universal life policies. Mr. Disharoon said the legislation would preempt private IRS rulings made the past year and a half, including the la-; test, that would seemingly have a negative impact on universal life policies. The ruling dealt with tax-deferred annuitiesa type of retirement insurance but industry officials said it had implica-- See INSURE, C10, Col.

1 similar plan, and by the end of 1981 about 30 companies were marketing a form of universal life. Universal life accounted for 2 percent of the life insurance industry's $5,121 billion in new policy premiums last year, or about $103 million, according to the Life Insurance Marketing and Research Association, an industry group. At the end of the first quarter of this year, according to industry estimates, 125 companies both insurance companies and brokerage houses were selling universal life, promising returns of 3 percent to 4 percent but saying they actually were paying more than 12 percent because of high yields on their investments. Other insurance companies have been holding off on universal life until the Internal Revenue Service issued a formal ruling on whether the policies legally can accumulate tax-free interest. A private letter ruling to Hutton said policyholders would not be taxed when interest was credited, but private rulings are not binding on other companies.

A hint of the IRS's feelings on universal life came June 15 in another private ruling, this one to Massachusetts Mututal Life Insurance company, an opponent of universal life whose primary business is whole life. Mr. Disharoon noted that because of the current tax laws, mutual companies Universal life, an innovative insurance policy that has become popular with consumers because it combines death benefits with a type of high-yield savings account, has been dealt a temporary setback by an unfavorable tax ruling. But the companies that have been selling universal life as an alternative to whole life insurance are standing firm behind their product, saying universal life still is a better life insurance investment and will not lose much value even if the tax ruling stands. "That ruling did not come as a surprise," said Leslie B.

Disharoon, chairman of Baltimore's Monumental Life Insurance Company, one of the many companies now selling universal life policies. What has become known as universal life made its debut in 1978 when E.F. Hut-ton Life Insurance Company, a subsidiary of the brokerage house, began test-marketing a policy that separated savings and insurance features. Premiums not targeted for insurance were used to buy high-yielding, short-term bonds that built up tax-free interest around 12 percent compared with 4 percent returns on most whole life policies. About 18 months ago Hutton began selling its policy.

By that time, Insurance Company of Virginia was promoting a 1 1 A. LESLIE B. DISHAROON such as Mass Mutual cannot sell universal life policies profitably. He said some mutual companies are seeking to construct life insurance products that will receive unfavorable rulings from the IRS in order to take some of the luster off the universal life product. "It is kind of like a taxpayer telling the Salisbury TV unit sold Delmarva Broadcast Service, a limited partnership headed by a Maryland broadcaster and a Florida firm with broadcast interests, has acquired television station WMDT, Channel 47, in Salisbury, for $4 million.

The television station, which has been on the air only two years, had financial troubles and has operated under the guidance of a court-appointed receivership the past year, according to Frank Pilgrim, general manager. The station identified the partners of Delmarva Broadcasting as Joseph L. Brechner, a Maryland and Washington area broadcaster and founder of Maryland-District of Columbia-Delaware Broadcasters Association, and Mid-Florida Television Corporation, an Orlando firm with an interest in a television station in that city. Retail sales drop, consumer credit moves up U.S. installment debt soars Stores report lag in June Adams assets decline Adams Express Company, one of the two closed-end investment companies based here, reported yesterday that its net assets were down 13.1 percent during the first half of 1982 and for the 12 months ended June 30, assets were off 14.2 percent to $14.21 a share.

In the year ended June 30, the Dow Jones Industrial Average was down 16.9 percent and Standard Poor's 500 Stock Index was off 16.5 percent. During the quarter ended June 30, Adams Express increased its holdings in Aetna Life, Caterpillar, Digital Equipment, Gulf, Halliburton, Hospital Corporation of American and Mercantile Bankshares, cut back its investment in Baltimore Gas and Electric, E-Sys-tems and GEICO and eliminated its holding in Cleveland Cliffs Iron, Hanna Mining and Standard Oil "I wouldn't read into the May report anything very positive about the consumer," Mr. Thomson said. American consumers worried that pay raises will be small or that they might even lose their jobs are still reluctant to go into debt, and "I think it will be a slow mending process," he said. Yesterday's report said the May increase in outstanding installment debt a gain at an annual rate of 5 percent was the largest since the $2.9 billion of last September.

Gains of $2 billion and more had been common before the recession began last summer. The credit figures are important because greater sales of cars, furniture and other relatively expensive items typically bought on credit are considered necessary if the nation's manufacturers are to pull out of recession. In May, a jump of $959 million in outstanding auto loans the biggest gain for that category since last October led the overall increase. Outstanding auto loans had risen $233 million in April. In all, The report said, Americans took on $29.2 billion in new installment up 1.7 percent from April, while paying off $27.8 billion in old debt, up 1.1 percent.

Washington (AP) Americans took on $1.4 billion more in installment debt than they paid off in May, the government reported yesterday. It was the largest increase in eight months but still a modest gain in comparison to pre-recession totals. Robert Ortner, the Commerce Department's chief economist, called the report encouraging. And he said that "to the extent that it's a reflection of consumer confidence in the future, it could be very important." But he stopped far short of saying yesterday's Federal Reserve Board report indicated imminent, robust recovery from the 1981-82 recession. Mr.

Ortner noted that unemployment remained high in June and that auto sales fell sharply after helping push the consumer credit figures higher in May. Private analyst Thomas Thomson, chief economist for Crocker National Bank in San Francisco, also pointed to recent reports of slumping June auto sales as an indication that credit figures didn't rise nearly as much in June as in May. And the May increase in overall outstanding installment debt, though large in comparison with recent months, was hardly a big number by pre-recession standards, he said. go-based Sears were up 2 percent to $7.8 billion from $7.67 billion. Sears Chairman Edward R.

Telling attributed the June sales decrease to cooler weather that cut into seasonal purchases of such items as apparel and air conditioners. No. 2 mart headquartered in Troy, said June sales slid 1.2 percent to $1.59 billion from $1.6 billion. For the five months, sales were up 5.5 percent to $6.5 billion from $6.2 billion. At J.

C. Penney Company, the third largest retailer, based in New York, sales rose a modest 0.2 percent to $1,033 billion from 1.031 billion. For the five months, sales declined 0.8 percent to $4,308 billion from $4,344 billion. And Montgomery Ward Co. of Chicago, the sixth-largest retailer, said sales fell 1.4 percent to $510.35 million from $517.8 million.

For the five months, sales were down 4.7 percent to $2.1 billion from $2.2 billion. Inflation in the retail industry is estimated at 4 percent. "The weakness, with the exception of video games and toys, was across the board by product line and price point," said Mr. Greenstein. New York (AP) Summer got off to a lazy start at the nation's major retailers, with three of the largest reporting yesterday that they had sales declines in June.

That could mean big summer bargains for shoppers, particularly those looking for designer clothing. The disappointing June sales came as little surprise to many analysts, who said the recession and high interest rates still are keeping consumers away from the stores. Even analysts who optimistically predicted a slight recovery in the retail industry after a pickup in sales in May said the May results were an aberration, benefitting from business that otherwise would have taken place in snowy April. A true recovery is not expected until the back-to-school shopping season. "The consumer still was basically unwilling to buy general merchandise in June," said Monroe Greenstein, an analyst who follows the retail industry for Bear, Stearns Inc.

Sears, Roebuck and Company, the largest general merchandise retailer, said sales tumbled 1 percent in June from the same month a year before to $1.86 billion from $1.88 billion. For the first five months of the fiscal year, sales at Chica Citizens net advances Citizens Bank and Trust Company of Maryland reported yesterday that its earnings for the second quarter of 1982 increased 29 percent when compared to the same quarter last year. The bank reported earnings of $4,493,341, or $2.51 a share, compared to $3,492,172, or $1.95 a share, for the second quarter of 1981. For the first six months of the year, the bank reported earnings of $7,985,513, or $4.46, compared to $6,455,269, or $3.60 a share, for the first half of last year. The bank reported it has $765,447,354 in total assets hat the end of the first six months for 1982.

ecorated cutter to be sold for scrap Dow gains five points in turbulent trading By Peter Meredith New York (AP)-The stock mar Market View DJI close 804.98,5.32 Up 586 Unchanged 447 COAST uno .49 The Coast Guard cutter Spencer, the Coast Guard's most decorated vessel, is being sold for scrap at the Coast Guard Yard at Curtis Bay. The 327-foot cutter, which sank two German U-boats within two months in the North Atlantic in 1943, is being offered for sale by the federal Maritime Administration. Bids are due by August 5. The last time a cutter was sold, in October, 1980, the sale price was $73,333. The cutter was the 254-foot Chautauqua; the buyer was the North American Smelting Company of Wilmington, Del.

The Spencer has been at the Curtis Bay yard since 1974, when it was decommissioned. It served for a while as a steam propulsion training school, and then, briefly, as a temporary berthing facility for other cutters in at the yard for repairs. "It certainly is in kind of terrible disrepair right now," said Dorothy Mitchell, a public affairs spokesman at the yard. "It's kind of sad." The Spencer, launched at the New York Navy Yard in January, 1936, was a cutter of the Campbell class, the largest in the service until ket finished mixed yesterday in a turbulent session marked by speculation that interest rates might be headed lower. After tumbling in early trading, stock prices rallied as rates took a sharp drop in the credit markets.

The Dow Jones average of 30 industrials, off more than 10 points halfway through the day, closed with a 5.32 gain at 804.98. Declines outnumbered advances by about 4 to 3 on the New York Stock Exchange, after leading by as much as 4 to 1 earlier. The market began the day with a wave of selling that hit bank stocks particularly hard, as traders registered their concern over the failure early this week of the Oklahoma City-based Penn Square Bank. But prices bounced back strongly in the latter stages of the session, following the lead of a strong showing by the bond and short-term money markets. Rates on short-term Treasury bills fell by one-half to two-thirds of a percentage point.

Prices of long-term government bonds, buoyed by falling rates, climbed as much as $20 for every $1,000 in face value. Down 818 File photo Coast Guard cutter Spencer arrives at the Curtis Bay yard at dawn on January 17, 1974, for its decommissioning. Thursday, July 8, 1982 N.Y.S.E. volume 63,270,000 timore-area resident who joined up with Mr. Ellers, remembers the U-boat surfacing, too.

"We were three or four days out of Ireland," he said. "We dropped depth charges and it came to the See CUTTER, C10, Col. 8 of German submarines and chased them away from the convoy. "We captured one and took 40-some Germans including the captain," Mr. Ellers said yesterday.

"She came up firing her guns." Herman Fenzel, 63, another Bal 1977. Its glory days came during World War II, first in the Atlantic and then in the Pacific. One of those on board at the time George C. Ellers, of Catons-ville remembers the day in 1943 when the cutter ran into a wolf pack 4 One subject of speculation was the possibility of a cut in the discount rate, the charge the Fed sets on loans to financial institutions. By late yes-Ss MARKET, CI 2, Col.

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