The Baltimore Sun from Baltimore, Maryland • 121

THE SUN BALTIMORE, SUNDAY, NOVEMBER 9, 1975 Finance Transportation K7 Westinghouse's Kirby 'pleased' by '75 gains nr. i 4 By JESSE GLASGOW Financial Editor of The Sun 4 -'4 will be purchased by several European countries as well as the United States. N. V. Petrou, president of the Westinghouse installation adjacent to Baltimore-Washington International Airport, says a decision from the Defense Department is expected about December 1.

Neither he nor Mr. Kirby says their company should get the radar contract simply because Hughes Aircraft got the last two, but Mr. Kirby did say that if Westinghouse misses out on this one, "the Department of Defense could be left with only one supplier of fire-control radar," adding that this "would not be a healthy situation." The new Westinghouse chairman says his company "went into this competition very well prepared. We made a large investment of our own money and we think the product that resulted is an excellent one." If Westinghouse does participate in the F-16 production, there would no contribution to earnings in 1976 and the con tract would have no effect on local employment next year either. If the company fails to get the contract, there would be no layoffs until 1977 and, by the same token, any small increase in employment would not come until then.

In 1974 Westinghouse's sales rose to an all-time high of $5.79 billion, but net earnings were off sharply, to 31 cents a common share from $1.82 the year before, due principally to costly write-offs connected with discontinued operations. When Mr. Kirby took over nine months ago, he said 1975 would be another difficult year, but in each of the first three quarters the company's operating earnings have exceeded those for all of last year. Revenues after the first 9 months were $4.2 billion and may not exceed last year's for the full 12 months, but profits will be vastly improved. Mr.

Kirby smiles easily and at the mention of the improvement thus far this year, he grins. He confines his com- Westinghouse Electric is having a good year, and an extra fine year compared with its poor results in 1974, all of which makes traveling about the country more enjoyable for the former Baltimore engineer who now runs the company. Robert E. Kirby, who took over as chairman and chief executive in late January, was here last week to look over the Westinghouse Defense Center, where he worked for 15 years, and to speak at a dinner honoring several hundred retired employees. Old friends found Mr Kirby cautiously optimistic.

One reason is that Westinghouse likes its chances of landing the radar equipment contract for the Air Force's new F-16 fighter, a plane that ROBERT E. KIRBY Former Baltimore engineer now heads Westinghouse Electric Corporation. Global interdependence prompts 2 conferences Regulators not flattered by study By BRADLEY MARTIN Sun Stall Correipondent mentary to the understatement: "We're very pleased with 1975." He says one of Westinghouse's "gigantic strengths" is its diversity. As an example, it will produce upwards of 16 million motors this year, "some small enough to run your washer and a few big enough to run the largest bar mill at Sparrows Point." In answer to a newsman's question about the pace of improvement in the nation's economy, Mr. Kirby says it looks to be "a long, slow pull" with one of the two most important industries construction lagging behind some others.

Part of the improvement in Westinghouse's fortunes is due to its focusing on its most profitable areas, but in the case of one of them, nuclear power, the company finds itself in a ticklish situation. Westinghouse is being sued by some of its electrical utility customers, who claim the company has defaulted on its contracts to deliver uranium. With the matter now in court, Mr. Kirby has to be circumspect in his comments. Westinghouse is stressing the doctrine of commercial impracticability, and its chief executive says, "We've never turned our back on a contract and we're not in this case." Whatever the decision in the dispute, Mr.

Kirby looks at his company's involvement with power-generation equipment, and nuclear power facilities in particular, as highly promising. He remarked that most nations, the U.S., Canada and Great Britain excepted, have adopted policies providing that future expansion of their electric generating capacity shall be accomplished through nuclear power. Sales to foreign customers who had such equipment on order have helped Westinghouse during the business recession, and perhaps as many as 20 per cent of the company's Maryland employees are involved in some way with these overseas sales. Other than the thousands it employs in the Pittsburgh area, where its corporate headquarters are located, Westinghouse's largest concentration of employees anywhere in the world is in Maryland. It has 12,500 persons on its payroll here, about 11,500 of that number at the defense center.

The Maryland payroll amounts to $180 million a year and the company spends another $60 million a year for the purchase of goods and services here, which means its stake in the Maryland economy approaches a quarter-billion dollars a year. It is fitting that Mr. Kirby and Westinghouse should be so optimistic just now about the local facility's connection with radar, because that is where the company chairman began his career in electronics. The son of a plant pathologist, Mr. Kirby graduated from the university where his father taught, Penn State, and took a job with West Virginia Pulp and Paper Company before he learned, 35 or so years ago, that the Navy was looking for young engineers to go into something new in the field of electronics.

The something new was radar, and it was so new the word was still "classified" by the military men involved with the technology. In the months to follow, the Navy sent Mr. Kirby to Princeton, later to the Massachusetts Institute of Technology's radiation laboratory and, for a time, to the Bell Laboratories for advanced training. He served in various electronics posts until the end of World War II. He recalls that he joined Westinghouse in Baltimore on the day his terminal leave expired and, with time out to attend the Harvard Business School, he held posts of increasing responsibility here until mid-1963.

That was when D. C. Burnham became Westinghouse's chairman. One of the new chief executive's first moves was to ask Mr. Kirby to become vice president-engineering.

They worked well together and, when Mr. Burnham reached the mandatory retirement age a dozen years later, the former Baltimorean succeeded him. end among like-minded people, the Conference on International Economic Cooperation is something else. Although the atmospherics have been greatly improved since the acrimonious breakdown of a preparatory conference last spring, the elements of confrontation between the rich nations and the poor remain. Two observations might be made about the meeting with the developing nations.

One point would register surprise that the U.S. has come so far diplomatically with so little to offer. The other would register concern over the abilityor willingness of the West to meet the aroused expectations of poorer countries for the more equitable distribution of the world's wealth. "I fear we must make far more concessions than we now plan," an American official said. "There is no easy road ahead and who knows where it will lead The prime objective in the U.S.

dealings with the third world has been to obtain a reduction of oil prices. But the third-world countries are more concerned about maintaining the purchasing power of their export earnings. The support of the oil producers for the demands of their poorer cousins resulted in a breakdown of the Paris conference last spring. Subsequently, the U.S. shifted its position, and Henry A.

Kissinger, the Secretary of State, held out the olive branch in speeches in Kansas City and Paris during the spring, and at the United Nations special session of development co-operation in September The submission of 41 initiatives in the speech to improve the lot of the poor, including a proposal to protect export earnings, has defused the confrontation. The Paris conference next month is expected to give inspiration and direction to four study commissions suggested by Mr. Kissinger on energy, raw materials, development and financing. It is. unclear how long the developing countries will be content to study the problems.

The stakes, of course, are enormous. Prices on the New York Stock Exchange finished with almost no change last week in slightly heavier trading. The Dow Jones industrial average was down 0.24 point for the week to 835.80.. The market's main impetus continued to be declining interest rates. Prices moved higher primarily because many major banks reduced their prime interest rate to 7V2 per cent from 7 per cent.

Friday, First National City Bank cut its prime rate to 7. At the beginning of the year, the prime rate was 10 per cent. New York Timet New Service New York. There's a certain agreeable defiance to the notion, "live alone and like it." But nations, like people, simply can't afford it. Specialization, the division of labor and the random distribution of natural resources have created an interdependent world economy in which American wheat, German machinery, Arabian oil and Korean textiles are traded in the interests of mutual prosperity.

Two international conferences in and near Paris over the next month or so represent a response to that interdependence. The first conference looks harmless. The second could be dangerous. The first is an economic summit of six industrial powers at the Chateau Rambouillet near Paris November 15 to 17. President Ford will join the leaders of Britain, France, West Germany, Italy and Japan in a seminar on economic recovery, trade and monetary problems, energy and raw materials, and relations with the third world.

No substantive developments are expected. The second is a 27-nation Conference on International Economic Co-operation beginning in Paris December 16 and bringing together in a triangular affair the foreign ministers of the industrial nations, the oil-rich developing nations and the poorer developing countries. Preparatory meetings of this group have been billed as conferences of oil producers and consumers. But the name has been changed to erase the appearance of confrontation. The six-nation summit is rooted in the French-American rivalry and the French-German entente.

President Val-ery Giscard d'Estaing of France, apparently fearful that a downward-floating dollar would give the United States a preferred position in world trade and recovery, this summer urged a return to fixed exchange rates and called for a monetary conference. Then he enlisted the support of Chancellor Helmut Schmidt of West Germany for harmonization of economic policies to spur the lagging recovery. Mr. Schmidt has urged Washington to stimulate faster growth to lift the industrial countries more quickly out of the recession. President Ford stalled and then apparently decided there was no harm in attending if the Europeans wanted it so much.

Besides, the recent strengthening of the dollar and the strong 11.2 per cent American growth rate in the third quarter make it easier to fend off French and German advances. All sides have been at pains to play down any expectation of initiatives from the conference. But if the summit conference entails mostly a pleasant French country week FTC, 13 of 20 former members of the SEC, and 3 of 5 former administrators of the FDA. Victor H. Kramer, professor of law and director of the Institute for Public Interest Representation at the Georgetown University Law Center, zeroed in on how regulatory commissioners are chosen, studying the process by which 51 people were appointed to the FTC and the FCC between 1953 and 1974.

He said the study, based on interviews with the commissioners themselves, presidential advisers and others, showed that "federal regulatory agency appointments are part and parcel of the patronage system in its rawest sense "Commission seats are good consolation prizes for defeated congressmen; useful runner-up awards for people who ricochet into the appointment as a result of a strong yet unsuccessful campaign for another position, appropriate resting berths for those who have labored long and hard in the party vineyards; and a convenient dumping ground for people who have performed unsatisfactorily in other, more important government posts." Most of the appointments, Professor Kramer said, were "the result of well-stoked campaigns at the right time and with the right sponsors. Most commissioners wanted the job so badly their teeth hurt." The selection process, Mr. Kramer said, "usually rejects the so-called 'controversial' person for commissionerships. The controversial person is one who has, by his or her prior conduct or writing, demonstrated that he or she has a point of view a philosophy, if you will toward the agency's work, toward the administrative process or toward the industry to be regulated." Consumer groups have to wait until a candidate has been nominated and thus publicly named before they may oppose his confirmation by the Senate, he said. But "such is not the case with the regulated industries.

With occasional exceptions the White House allows and, at times, has actively solicited their reaction to a proposed commissioner in the critical period beore a nomination is announced." Being a regulatory commissioner, Mr. Kramer said, "rarely leads to higher office, whether appointive or elective; commissioners almost never become judges or Cabinet members or congressmen. The vast majority do remain in Washington and, in one fashion or another, end up serving the interests they once regulated. But relatively few become wealthy and some find that their influence ends the day they leave office. As such, the subsequent careers of many commissioners is a significant reflection of the quality of people we select as regulators." Corwin D.

Edwards, a former chief economist for the Federal Trade Commission and another speaker at the symposium, suggested that those who choose and confirm top regulators underestimate the responsibilities of the jobs "and consequently aim too low in what they seek." In addition, he said, "the jobs of top regulators have been so defined in law and in public esteem that they are not sufficiently attractive to people of top quality." Regulators actually have more discretion than judges, Mr. Edwards said, in that they may initiate their own proceedings and often must establish priorities concerning which sorts of cases they will concentrate on. But they are not appointed for life, like federal judges, but merely for terms of years so that "no commissioner can be, like a judge, oblivious of the impact of his current activities upon his opportunities for later private employment." Another speaker, Theodore J. Lowi of Cornell University, See REGULATE, 10, Col. 5 ashington.

Federal regulatory commissioners, sitting in what often have been obscure corners of the government, are finding these days that people actually notice them. This attention cannot be wholly welcome, however, bringing with it as it does frequently unfavorable pronouncements on both the quality of individual regulators and the types of regulation they administer. As for the types of regulation, the Ford administration continues its big push to reform the structures and functions of federal regulation of business. Meanwhile, public and congressional opinion is divided over whether the "reforms" proposed would lead to an increase in healthy business competitionor merely help already powerful corporations remove some of the few remaining barriers to their complete control of American economic life. Congress has indicated by its actions, if not its words, that it recognizes the existence of problems, but would rather tinker with the regulatory structure and pressure the agencies involved into relatively gradual modifications of their own rules and practices than adopt the immediate and sweeping changes suggested by the administration and others.

Thus Congress contents itself with drafting fairly minor changes in regulation such as the provisions in pending legislation that would allow railroads to raise or lower their rates by several percentage points without having the new rates immediately suspended by the Interstate Commerce Commission. More fundamental changes are held up pending a study that may take months or years to complete. As for the individual regulators themselves, they have the distinction, or the misfortune, of having been the subject of the first phase of the congressional study. At a two-day "symposium" held last week, members of involved committees of both the Senate and the House of Representatives heard summaries of research results generally reinforcing the stereotype of federal regulators as political hacks, either innocent of basic knowledge of the industries they regulate or closely tied to those same industries through past employment or prospects of employment. James H.

Rieger, a General Accounting Office auditor on assignment to one of the congressional subcommittees, reported on a survey concerning 120 regulatory commissioners and administrators. The 120, he said, were all the commissioners and administrators confirmed since 1960 for appointment to 9 agencies: the ICC, the Federal Communications Commission, the Federal Power Commission, the Securities and Exchange Commission, the Federal Trade Commission, the Consumer Product Safety Commission, the Environmental Protection Agency, the Food and Drug Administration and the National Highway Traffic Safety Administration. Mr Rieger said the survey showed that less than 10 per cent of the regulators had prior significant experience in consumer affairs. On the other hand, he said, nearly 30 per cent had come from the industries they would regulate and this percentage recently "appears to have been increasing dramatically Of the 45 persons appointed in the last 5 years, 24 more than half-came from regulated industry." In addition, he said, "of the 85 persons who have left the agencies during the period, 32 have, at some time during the immediately subsequent 5 years, been employed in the regulated industry." This applied to 6 of 13 former members of the Koppers Company chairman works on 'why' of decisions 1 I 3 -MM 2 I "We all believe that decisions should be made at the lowest level by people who have the facts without having somebody up the line directing Koppers's people," Mr. DeVries explained.

In addition to the Metal Products Division, Baltimore is also the home of the company's Environment Elements Corporation subsidiary. Koppers has 3,800 employees in Maryland, 3,600 in Baltimore. Mr. Byrom comes to Baltimore at least once a month to hold seminars with the young management of local plants. It was from a speaker's podium that Mr.

Byrom launched his appeal for a constitutional convention. "I don't think our system is working today," he says. "I don't think we're capable of making choices that are becoming more difficult all the time." One big problem, he says, is that members of the nation's Congress are elected to terms of two and six years. way he runs Koppers. He describes it as "after-the-fact management." "Most chief executives think their most important function is to be the top decision-maker This sounds like a very self-serving statement, but I look upon myself as a leader and I think my job is to lead.

"I'm supposed to set the tone, the philosophy, the ethical concerns, everything that relates to those things that cause a person to decide to do something one way or another." Mr. Byrom says this has given him the time to devote to public speaking, where he raises questions that reach beyond the world of big business. In Baltimore, Donald L. DeVries, vice president and general manager of Kop-pers's Metal Products Division, has said that local management is given complete responsiblility and held accountable for their performance. In addition to his other duties, Mr.

Byrom serves as chairman of the Conference Board, chairman of the President's Export Council and vice chairman of the Committee for Economic Development. But the way he runs his business, and his views on government and the nation's future, do not entirely fit the tradition of board room conservatism. Among other things recently, Mr. Byrom has: Called for a new "Constitutional Convention" to consider changes in the nation's political institutions and to consider where the United States and the world are headed. Initiated seminars for young executives where the discussions are apt to concern the property rights of a starving peasant in Pakistan.

One reason that Mr. Byrom has the time for his extensive activities is the "So, he has to think in terms of those things that will get him re-elected every two years. "The difficulty is the complexity of our problems. The leadership, in order to avoid continually being in some kind of a mess, should be thinking in a time frame of every 10 years or so, but their election pattern is 2 years." Mr. Byrom suggested that "we ought to be convening a convention to set up a series of study commissions which would try to anticipate the nature of the world in 25 or 50 years from now.

And to try to understand what the mission of his particular sovereign nation would be." Mr. Byrom also would change existing political boundaries. "State boundaries today act in many cases more as obstacles to progress than as the means by which you accomplish progress. For ex-See BYROM, 11, Col. I Pittsburgh.

The first hint that there is something different about Fletcher L. Byrom is his office. Like the offices of most corporate executives it is spacious, carpeted and well-furnished, and removed from the noise of the building and city around it. But the traditional mark of a chairman of the board is missing. Mr.

Byrom has no expensive desk and padded chair. Mr. Byrom, the chief executive officer of Koppers Company, conducts business standing up. When he needs a desk, he uses a high, specially built piece that resembles a draftsman's table. Mr Byrom runs a corporation that did a billion dollars in sales last year, one of a half-dozen billion-dollar companies with headquarters in Pittsburgh.

Koppers produces chemicals, plastics, architectural and construction products. FLETCHER L. BYROM Presiding at the company's annual stockholders meeting here in 1972..