Chicago Tribune from Chicago, Illinois on February 23, 1976 · 63
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Chicago Tribune from Chicago, Illinois · 63

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Chicago, Illinois
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Monday, February 23, 1976
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63
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(Chicago Tribune Monday. February 23. 1976 By SIH9SS Section 4 Trend Line Appliance makers look for big sales gain in 7 6 . - Jt .. 1 By George Gunset MAJOR APPLIANCE ale were disappointing last year, but manufacturers are counting on a lot of refrigerators, washers, and dryers being scrapped in 1976. "Replacement sales should be good this year if you look back to sales 10 or 11 years ago," said Stephen E. Upton, chairman of the Association of Home Appliance Manufacturers. He noted that the average life of automatic washers, dryers, and dishwashers is 11 years, while you can count on 15 years for refrigerators and they may last up to 20 years. The industry is looking for a 12 to 13 per cent gain in shipments this year from the 1975 level of 24 million units, Upton said, with boosts provided by improved consumer confidence and a brighter outlook for new housing. THIS YEAR won't be without its frus- trations, he noted, particularly on the regulatory front. Two government agencies are formulating regulations to implement new laws on warranties and appliance energy efficiency. Still, that shouldn't mar the sales picture. The year got off to an excellent start as major appliance shipments jumped 17.6 per cent from a year earlier to 1,934,400 units, and included gains in 9 of 11 product categories. ALSO ENCOURAGING is the upward Consolidated tables: a case ! By Joseph Egelhof Chicago Tribune Press Service NEW YORK Pete Haas, a specialist ,U. S. Steel Corp. and 32 other stocks, obolly handles big business amid bedlam cji the paper-littered trading floor of the New York Stock Exchange, t When he turned aside to talk about the stock tables he wasn't quite so cool. T,he new "consolidated" tables being put out to newspapers by the Associated Press are causing problems, he said, brandishing a sheaf of pink slips which IJe said were brokers' "inquiries" about orders of past days. The consolidated tables of stocks list ed on the Big Board come from a computer digesting the day's trading experience in those same stocks in eight snaller markets as well as the Big Board. ; As a result the highs, lows, closes, and net changes developed in the Big Board's enormous volume it does 85't6v 87 per cent of the trading in the stocks it lists can be altered by small trades in other markets. I "IT S LIKE SELLING a used car in Alabama," Haas said. "The price might Political candidates pin hopes on buttons and he supplies them By Leonard Wiener ' "YOU'RE NOT officially running until you have campaign buttons." That's the political advice of Frank Sitzberger, an executive to whom political buttons are very important. Sitzberger's firm, Adcraft Manufacturing Co., is a leading supplier of the buttons and, in big political years such as this one, that means a lot of extra vork and profits. THE COMPANY'S current output includes promotions for such diverse political figures as Ronald Reagan, Sargent Shriver, Michael Howlett, and James Thompson. Adcraft was the prime supplier of buttons for former President Richard Nixon but also made 17 million buttons for Hubert Humphrey when he ran against Nixon. An initial order for 500,000 Reagan buttons has been received this year. ACCORDING TO Sitzberger, initial sales inquiries to Thompson indicated a ' disinterest on his part for campaign buttons but requests for such buttons from voters apparently changed his mind. ' Sitzberger said demand for the buttons, which cost from a few pennies and upward apiece, will peak during August and September. He doesn't want to insult anybody, but one thing Sitzberger said you have to be wary of in the political button business is extending credit. A deposit is required on orders with the balance due on delivery, he said. POLITICAL BUTTONS may be the most publicized aspect of Adcraft's business during election campaigns, but the firm's real "bread and butter" comes from the widespread comnjercial uses for buttons and badges. ! "You can't live on just the political buttons," Sitzberger said. ' One market is the manufacture of identification badges for conventions, he aid. In many cases those badges will te "custom made" with an individual's trend in new-auto sales because, historically, major appliance sales have lagged the auto trend by about six months. New bousing starts will help the industry, but Upton said bis company is not as affected by the housing market as some other companies. He is vice president-consumer and public affairs for Whirlpool Corp. Whirlpool, based in Benton Harbor, Mich., just across Lake Michigan from Chicago, last week reported sharply improved earnings for 1975. THE COMPANY said net income advanced 136 per cent to $58,853,000, or $1.63 a share, from $24,946,000, or 69 cents a share, in 1974, when a strike depressed results. Revenues eased to $1.47 billion from $1.62 billion a year earlier. Sales to Sears, Roebuck & Co. account for about 60 per cent of Whirlpool volume. Upton said Whirlpool concern for consumer affairs predated the general movement of the late 1960s. Particularly, he noted that the company established a "Cool Line" to deal directly with customer complaints, using knowledgeable technical personnel to answer questions on the phone. The service handled about 140,000 calls last year and Upton estimated 90 per cent of the problems can be solved on the phone. HE ALSO pointed to Whirlpool's direct payment of expenses for repairs made be $500 less but that doesn't make the bona fide market." "We can do 200,000 shares in a stock at 50 and then 200 shares are traded on the Pacific Coast Stock Exchange at 49'. The Pacific exchange closes Vk hours later than the NYSE. This causes a great deal of confusion, especially to people who had bought at 50," he continued. The "confusion" might be painful for an investor who puts in a sale order at a specific price, Haas and others explained. The investor picks up his newspaper and finds that the price of the stock got below his selling level. Therefore he thinks he's made his sale and goes to buy a Mercedes-Benz. But the check never comes because the price didn't get that low on the New York Stock Exchange where most orders are sent by brokers. , THE CONSOLIDATED tables were started by the AP Jan. 26 as a follow-up to the introduction of a consolidated tape last June. The tape, a display flashing across the trading floor at 900 characters per minute, added to NYSE trades those taking place on the PBW Philadelphia, Mid name imprinted at the time of manufacture. IT'S IN THE advertising and promotion area that the multimillion commercial orders come, sometimes in campaigns stretching over several years. One such job was the production over several years by Adcraft of "We Try Harder" buttons for Avis Rent A Car. A new campaign for the potato industry features 60,000 buttons with the advice "Anything Goes With French Fries." Adcraft has made buttons for Sears, Roebuck and Co. trumpeting "Coldspot -Freezer Sale" and pieces proclaiming, "Oldsmobile Has It All Together." "All big companies are using buttons," said Sitzberger. "It's an effective, low-cost advertising medium." Orders can range from hundreds to tens of millions. IN ADDITION TO external promotions, buttons are also used by companies internally in sales promotion or other programs aimed at employes. Charities often use buttons as part of fund-raising efforts. Sitzberger said buttons have been included in greeting cards and have been given as souvenirs to tourists. Hallmark Cards and the State of Pennsylvania are two such Adcraft customers, Sitzberger said. Adcraft traces its origin to 1919. Sitzberger, who is 'about 60, took over the family owned company in 1947. IN THAT YEAR, Sitzberger said, sales were about $150,000 a year and the firm used about 6,000 square feet of space. The space has now grown to about 75,000 square feet and sales are "well over $3 million," he said. HE SAID LONGER and added shifts can be expected this year at the plant and offices at 2700 W. Roosevelt Rd., Broadview. He estimates employment at about 150. Sitzberger said two main manufacturing techniques are used. On smaller orders the technique is to print op paper and then laminate with under warranties. The former practice of payment through dealers led to some slipshod service, he said. Warranties are the subject of rules being decided by the Federal Trade Commission which will go into effect by year's end, Upton said. An FTC spokesman said three sections have been completed covering specifics of written warranties, prenotification of customers before purchase, and mechanisms to settle disputes. Still to come, he said, is a "lemon" section covering "reasonable" length of time to repair, replace, or return money. OF MORE concern to Upton are requirements to be set by the Federal Energy Administration governing improved energy efficiency for major appliances. "President Ford had called for a 20 per cent reduction in energy usage by appliances by 1980," he said. "Working with the Bureau of Standards in the Department of Commerce, the industry came up with an acceptable, workable voluntary program that would reach that goal." But, he said at the last minute at the end of last year, Congress tacked on a section in the energy bill that made conservation mandatory and shifted responsibility for enforcement to the FEA. TAKING A slightly different slant on the situation was Robert Hemphill, deputy administrator for transportation and west Chicago, Boston, Cincinnati, Detroit, and Pacific exchanges, and in the dealer "third market" in listed stocks and Instinet a trading net for institutions. The tape indicates the source of off-Big Board transactions. The consolidated tables do not. Asked about the additions to the tape, Pete Haas said, "I know we're the prime market so I don't even look at them." SOMEPLACE ELSE in the uncharted, howling crowd on the trading floor, another key specialist, John Phelan handling Esmark, Harvester and 38 other stocks had kind words for the consolidated tape. "It's good for the public because investors know what's going on in the whole national market picture," said Phelan, who is also vice chairman of the NYSE. But he thinks the new tables should also show the NYSE close when it's different from the consolidated close. THE AP IS sticking by its guns. It says what the confused investor is really finding out is that the price the investor wanted was somewhere else perhaps 1 H.j? ' T " itSf J A quality control inspector examines buttons for current political campaigns at the Adcraft Manufacturing Co. in Broadview. plastic, he said. On large orders it is In addition to buttons, Adcraft also faster and more economical. to print di- does work on displays and signs, rectly on metal and then varnish, he Sitzberger estimates that there are said. about half a dozen major button manu facturers in the country, although there SITZBERGER'S SON, Ken, a 1964 are many more firms selling and dis-Olympic gold medal winner in diving, tributlng the buttons, has his own firm that provides tooling He estimated industrywide sales at and engineering assistance to Adcraft. under $10 million a year. ,Vt w v ;- If V .TV", ; i . V Cabinets are added to Whirlpool washing machines during assembly at the appliances for the FEA. "I don't blame the industry for being miffed, but the FEA is mandated to carry out the law," Hemphill said. "They should not feel that the voluntary effort was wasted because to the extent we can under the law, we will use their plan." He disputed the claim that the section was a last-minute addition to the law, saying it had previously been passed by one house of Congress, "so that you for climbing the available through another broker. Stephen Miller, AP business news editor, said the system of reporting consolidated prices was developed by the Securities and Exchange Commission and the securities industry as a whole-mindful of the broader interest of the investment public coast to coast and not just in New York City. "We think the consolidated price list is a valid idea and our member papers agree, including the New York papers," he said. "We are aware that the New York Stock Exchange opposes the tables, just as it might be expected to oppose any move that might attract an investor to another stock exchange. But we haven't heard any plausible arguments from the point of view of a newspaper or individual investor which would lead us to believe the consolidated table is anything but a step forward," he continued. MILLER ADDED that he'd be a "little suspicious" if an upsurge of complaints from Wall Street to the AP materialized now. Asked for comment on this insinuation that the Big Board might promote a flood of phony complaints, a stock ex- Tribune Photo or Eo Feenoy could hardly call it tacked on." THE LAW covers 13 appliances and requires the FEA to set percentage improvement targets. For 10 it is the maximum feasible, both economically and technologically, by at least 20 per cent. These are refrigerators, freezers, dishwashers, clothes dryers, water heaters, home air conditioners, home heating, television sets, kitchen ranges, and washers. Humidifiers-dehumidifiers, central air conditioners, and furnaces do change source said, "We're too busy answering the telephone." The NYSE source said the exchange has been getting many complaints from brokers, calling on behalf of confused customers, and from investors themselves. One beef has been about a few errors that have shown up in the new AP tables which an opponent blamed on the smaller markets. In the latest of these, the tables for Wednesday's market incorrectly showed Allied Supermarkets dropping a whopping 30 per cent from $3.25 to $2.25. THE $2.25 PRICE, it was learned, arose from a 200-share trade at 3:55 p.m. Eastern Standard Time on the PBW exchange in Philadelphia. When PBW was called, Bruce Calhoun, an assistant vice president, explained that someone had accidentally punched a "2" instead of a "3" in putting a $3.25 transaction orf tbe consolidate apej. It was only a couple of minutes before the exchange close at 4 p.m. when the incorrect price was punched. The PBW cancelled the incorrect version a few minutes later but by that time it was too late for the correction to get on the Gung-ho on ethics SEC's 'Columbo' hot on trail of bribes By Bill Neikirk Chicago Tribunt Press Service WASHINGTON The rumpled hulk of a man casually plops his feet on the table like one at peace with the world, but the deep-set piercing eyes and intense voice tell a different story. "I just don't see the other side," he says. "I just don't see how the government can in any way tolerate dishonest conduct, whether it's in Timbuktu or in Oshkosh." Such a gung-ho attitude about business ethics reveals why Stanley Sporkin, 44, director of the Securities and Exchange Commission's Enforcement Division, is regarded with fear and respect in many of the nation's corporate board rooms. SPORKIN'S SOMEWHAT slovenly appearance evokes many comparisons with television's Columbo, but after more than a year of engineering the SEC's investigations into corporate bribery and illegal campaign contributions, no one doubts his toughness and drive. Sporkin has, with the help of a nationwide staff of fewer than 250, uncovered slush funds, overseas bribery payments, and illegal campaign contributions on a scale unprecedented in American history. The SEC has, as a result, sent a chill through the Fortune 500. "I've been accused of being naive," he said, noting that as a lawyer he has spent most of his professional life at the SEC. "Big corporate lawyers come in here and ask me, 'why is the SEC investigating something that has been going on for 100 years? Everybody knows it's happening.' Well, I tell them, 'You may have known, but I didn't know.' " MANY OFFICIALS in Washington credit the SEC's and specifically Spor-kin's singlemindedness with uncovering much of the wrongdoing originally touched on in the Watergate, bearings,. For months, the SEC was the only federal agency actively pursuing the bribery allegations, until President Ford stepped in a few weeks ago. Sporkin made up his mind to investigate the bribery allegations when he was watching the Senate Watergate hearings. When one executive was testify St. Joseph (Mich.) plant. not have to meet the specific 20 per cent minimum improvement. Hemphill also is not satisfied with the law in certain parts. "Congress gave us specific dates for each appliance by which we must draft test procedures and make preliminary efficiency targets," he said. "But in each case, they want us to set the targets before we come up with test procedures. It's a little like the cart before the horse." walls? tape and the world. '$2.25" went out to the WATCHING THE AP-Big Board clash closely is, of course, United Press International, the AP's competitor in stock tables. Between June and January, both AP and UPI had their tables computer programed to delete the off-NYSE trades from the consolidated tape, which had the effect of keeping ttt closing prices strictly NYSE. UPI didn't join the AP in the move to consolidated tables. Now, it was learned, UPI is about to take a major new step, possibly involving consolidation along with identification of off-NYSE closes. Meanwhile, sales of the Newark Star-Ledger, the largest newspaper in the New York metropolitan area using UPI tables, have shot up at the World Trade Center in the financial district. Arnie Braeske, Star-Ledger financial editor, said, "We've got a great many phone calls from as far as Houston, Milwaukee, and Pittsburgh, seeking to confirm that we're printing New York closings, and about half of them want subscriptions." '- - fiw J f-i 21 Stanley Sporkin ing, he said, he wondered how major corporate executives could "traipse around Europe" with a lot of unaccounted money without disclosure to stockholders. "It raised a very serious question," he said. "I made up my mind that something had to be done about it." YET, SPORKIN said, the SEC felt lonely in his probe for many months. "It has been a very wearing kind of thing. I'm convinced we're right. We're certainly right under our laws. My concern is that we do not have people in the country who influence other people helping. "You take the organized bar in all this. They're dead. They're too busy defending their clients for wrongdoing." And Sporkin, himself a certified public accountant as well as a lawyer, said the accounting profession. ihasnft provided much support ottheroiiyn-ii inHfn SpoTtina'PW'Beti Rappr''wo graduated from VaU-iLDwHtJehoolm '1957, JoinW thC'SEChvlWI after tlerf tog" as a law clerk in Delaware. He worked his way up through the ranks and was appointed director about two years ago. He said that he doesn't know how far Continued on page I, col. 1 FT. ': n

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