The Los Angeles Times from Los Angeles, California • 34

Trade Gap Shrinks; Dow Index Jumps 8 i 1 i r- -3t1 1 111 4 I -jjjv --55 ft 7 ml 'HaSB i --rn tin mm i mmm A.f jj tm. mm mummmmmmff mmimmmm fen I s.3 I mi urn i t'-'" i -i ii mi iiiiii i rn iiiiiiiiiiiiii-liiiiiM REASONS PERPLEX WORKERS Tire Makers Quit L.A. Top U.S. Market BY HARRY ANDERSON Times Staff Wrllw "There's no place for us to go," said a sad-eyed tire worker at the Uniroyal plant in City of Commerce. "Seniority don't mean anything if they close up the industry." After more than 50 years, the tire industry is deserting Los Angeles.

Uniroyal which said last week it plans to close its plant here after more than 46 years, is the latest to end tire production in the local area. B.F. Goodrich Co. closed its plant in 1975. Goodyear Tire Rubber Co.

ceased passenger tire production last year. Once the Uniroyal plant closes, nearly 2,500 local rubber workers will have lost their jobs in the past 2lA years. Only the Goodyear truck tire facility in south central Los Angeles and the Firestone Tire Rubber Co. plant in South Gate will remain, at least for now. And for the growing number of unemployed rubber workers faced with the prospect of starting all over again in a new industry, the future may be bleak.

The situation at the Uniroyal plant is an example. The 23-acre facility was built in the late 1920s by the Sampson Tire Co. Its facade is a replica of an ancient Babylonian temple. The landmark factory, which Uniroyal acquired in 1931, broke with industrial patterns of its day by having all manufacturing on one floor, under a single massive roof. Its employment for most of the intervening years fluctuated between 1,000 and 1,500.

"It was as steady a job as you could ask for until the gasoline shortage," said Lew Paul, president of Local 44 of the United Rubber Workers of America and a 33-year veteran at the Uniroyal plant. Since 1974, however, things have been anything but steady. A massive layoff during the recession, followed by a lengthy strike, meant that most younger employes, who are not protected by seniority, have worked only about 14 or 15 months in the past two years. Growth in sales of imported cars with imported tires; a swing toward radial tires which last longer than the bias tires the Uniroyal plant made, and the trend toward lighter cars and lower speed limits which reduce tire wear have hurt passenger car tire sales. Most of the U.S.

tire makers now have excess capacity. And, as all the companies look for their least productive factories in order to eliminate unneeded production facilities, many-including Uniroyal have eyed their Los Angeles plants. Please Turn to Page 10, Col. 1 December Puts Year's Total Well Below Estimates Fram Tbim Win Scrvtcti WASHINGTON The nation's trade deficit eased in December for the second straight month, the Commerce Department said Monday. As a result, the total deficit for the year, while a record $26.7 billion, was well below the $30 billion widely projected last fall.

The December deficit, adjusted for seasonal fluctuations, was $2.03 billion, down from $2.08 billion in November. Administration officials are projecting only modest further improvement, however, in 1978. The previous record trade deficit was in 1972, when imports exceeded exports by $6.4 billion. In 1976, the trade deficit was $5.9 billion. The nation's heavy reliance on imported oil more than accounts for the trade deficit.

Oil imports alone last year were $42.1 billion, 29 of total U.S. foreign purchases. In 1976 the nation bought $32.2 billion of foreign oil. The relatively strong economic recovery in the United States, coupled with slow growth abroad, also has contributed to the large trade deficit. A growing economy creates demands for foreign goods.

U.S. demand for imports grew from $120.7 billion in 1976 to $146.8 billion in 1977. Exports grew only $5.3 billion from $114.8 billion to $120.1 billion-over the same period. Because most foreign countries are growing more slowly than the United States, demand for American goods has been increasing very slowly. Foreign manufacturers also have tried aggressively to sell products in the United States because of slack demand in their home markets.

The Administration has been pressuring major world economies principally Japan and West Germany to take steps to boost their economic growth rates, in part to stimulate demand for U.S. goods. After oil is taken out of the U.S. trade ledger, the trade balance is in surplus by $15.4 billion for 1977, smaller than the $26.3 billion surplus the nation recorded after oil was taken out of the 1976 trade figures. Commerce Department chief economist Courtenay M.

Slater said the continued reliance on foreign oil means that "a large deficit must again be expected in 1978." The large U.S. trade deficit has been the major reason behind the sharp decline in the dollar in recent months. As foreigners' dollar holdings increase, the price of the dollar in other currencies especially the Deutschemark and yen declines. Please Turn to Page 16, Col. 4 END OF AN ERA The Uniroyal plant in City of Commerce, above, has been a Los Angeles landmark since the 1920s.

Its facade is a replica of an ancient Babylonian temple. Workers, below, enter plant a scene that may soon end. Firm plans to close the plant. Times photo by Art Rogers Slow and Steady Rally Gets Help From Deficit Cut Fran Tinwt Wlr Strvku NEW YORK-The stock market, aided by better-than-expected trade figures, staged a slow but steady rally Monday that carried the Dow Jones industrial average to its best gain so far in 1978. The Dow average of 30 blue chips climbed 8.32 to 772.44, for its best single-session advance since it rose a similar amount last Dec.

9. Gainers outnumbered losers by about a 5-3 spread on the New York Stock Exchange, and the exchange's composite index of more than 1,500 common stocks was up 0.39 at 49.45. The pace of activity was unimpressive, however. Big Board volume totaled 17.40 million shares, down from 17.60 million Friday and was the lightest total for a full six-hour session since 16.75 million shares changed hands Dec. 27.

Nationwide turnover in NYSE-list-ed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 19.84 million shares. Standard Poor's index of 400 industrials gained 0.93 to 98.44, and 500-stock composite index was up 0.76 at 89.34. On the American Stock Exchange, the market value index was up 0.58 at 121.42. The Nasdaq composite index for the over-the-counter market closed at 100.97, up 0.35. The NASD reported volume of 7.21 million shares.

At mid-afternoon the government reported that U.S. imports exceeded exports by $2.03 billion in December, bringing the total trade deficit for the year to a record $26.72 billion. But analysts noted that the news had been widely advertised in advance, and that the actual figures came in below advance estimates of about $30 billion. Brokers also said the market seemed to benefit from buying by in-, vestors who had been holding back until the trade-deficit news was out of the way. Just as some traders like to time their selling to coincide with favorable news, they suggested, investors who had recently been planning to buy decided the trade deficit news would provide an opportune time.

The U.S. dollar likewise moved up in late foreign-exchange trading, apparently benefiting from a similar psychology. Wide trade deficits have been cited as a drag on the dollar in recent months. Hewlett-Packard was actively traded, losing 1 to 66. A secondary distribution of 1.05 million of the company's shares was completed.

United Technologies climbed 1V6 to 34V4. The company reported higher Please Turn to Page 16, Col. 3 SURPLUS 1973 1971 1972 I g- no 21 I I U.S. TRADE I Small Oil Firms Being Forced to Quit, Independent Says BY TOM REDBURN Tlmti Stiff Writer Dimness riiiiim 8 Pt III TUESDAY, JANUARY 31, 1978: and Slavick's, a Los Angeles-based retailer, of conspiring with each other and others to restrict trade and fix prices of the Swiss watches. The suit alleged that the defendants have violated California antitrust laws.

The complaint asks for treble the amount of damages allegedly suffered by each plaintiff and for the court to enjoin the defendants from the alleged POSITION Tl 1 I 15 traced back to the government's complex entitlements program, under which refiners with access to low-cost domestic crude oil must make compensatory payments to refiners dependent on expensive foreign crude. The purpose is to equalize the cost of crude oil for all U.S. refiners and thus avoid unfair competition. Ever since the federal entitlements program went into effect in November, 1974, however, California oil producers have complained that they have been placed at a disadvantage. As a result, oil production in the state has slumped.

Only last month producers of so-called "lower-tier" oil (oil that was already flowing from old wells) received a crucial shift in crude oil pricing that encouraged refiners to start buying more oil from them. But "upper-tier" producers such as Hodges, who have drilled more expensive additional wells in previously discovered fields to boost production, didn't receive the bonus. The lower-tier oil is cheaper than the upper-tier, but the entitlements program is intended to balance out the prices so that both are equally attractive. The pricing shift threw that balance off. So even though there is no quality difference between the variously priced oils, fuel oil refiners who buy most of the heavy, high-sulfur California crude have turned to the lower-tier oil as a better deal.

"I don't understand how the government determines what the prices will be," says Tim Fait, president of West Coast Oil which has just canceled a contract to buy 60,000 barrels a month from Century Oil. "But I do know it is the majors (the big oil companies) that sell most of the lower-tier oil and the independents who sell most of the upper-tier." But according to a spokesman for the Department of Energy in Washington, the government didn't intend to benefit the majors at the expense of the independents. "It is certainly our policy to keep all domestic crude oil on line," says Ed Vilade. "We haven't abandoned the independents. We want to encourage them to present data explaining their situation." A Department of Energy policymaker, who asked that his name not be used, said the agency recognizes the problem, has tried to deal with it in the past, and is working on a new plan now.

"This just underscores the Please Turn to Page 16, Col. 1 DEFICIT Everett (Red) Hodges is angry. The independent oil producer, who describes himself as "six feet tall and every inch a wild, red-headed Irishman," claims he is being forced by the federal government to shut down most of his oil wells in California at a time when the government says it is trying to reduce costly foreign oil imports. "Our friends in Washington," he says sarcastically, "are beating the hell out of the independents. There is a glut of oil in California, but the government won't allow us an escape valve for our distressed California crude.

We are in danger of going out of business." Hodges, 45, president of Century Oil says his company is capable of producing almost 3,500 barrels of oil daily but that most of it will stop flowing today because no refinery will buy it. The root of the problem can be 3-Martini Lunch Curb Gets First Tax Study Fire BY ROBERT A. ROSENBLATT Tlmtt Stall Writer WASHINGTON A skeptical House Ways Means Committee formally received President Carter's tax program Monday and the members immediately sank their rhetorical teeth into a controversial topic: the three-martini business lunch. They worried about restaurant owners who might be forced out of business and expressed compassion for workers in eating places who might be unemployed if the present tax deduction for business dining is cut back. Treasury Secretary W.

Michael Blumenthal countered their concern with the cases of an individual who claimed business lunches 340 days a year, and the dental surgeon who deducted $14,000 a year for entertaining other dentists on his yacht. The proposal to cut the meal deduction to 50 of the check and to wipe out any tax allowances for theater and sporting tickets was most frequently mentioned as the committee began hearings on the President's plan to cut individual and corporate income taxes by $25 billion next year. The committee members were cordial as the Treasury secretary answered their questions about the tax package, but they made it clear that the final bill may differ considerably from the original Administration blueprint. "I am concerned that, in this election year, Congress will enact much too large a tax cut," said Rep. Al UU-man the chairman.

"Doing this would eliminate any chance for us to balance the budget and get inflation under control." Ullman and several other influential members, including Rep. James Corman suggested that the President might not get all the tax "reform" provisions he wants, and will have to settle for a smaller bill. Please Turn to Page 15, Col. 4 National Treasury bill interest rates rose at the latest weekly sale. The average rate on 91 -day bills was 6.44, up from 6.429 at the previous auction.

The Treasury Department said it was the highest rate since the 6.535 on Jan. 16. The average rate on 182-day bills was 6.715, up from 6.709 and the highest since 6.759 on Jan. 16. The Treasury sold $2.4 billion of 91 -day bills and $3.5 billion of the longer-term issue.

Machine tool orders rose 10 last month, a trade group said. The National Machine Tool Builders' Assn. said December orders for machine tools increased to $314.7 million in December, up from November's $286.1 million and 37 above the $229.3 million in orders in December, 1976. The association said machine tool orders for all 1977 totaled $2.99 billion, up 34 from $2.23 billion in 1976. It said the greatest improvement was in orders from domestic users, which rose 36 to $2.71 billion from $1.99 billion a year earlier.

Shipments for all of 1977 totaled $2.28 billion, up 11 from $2.06 billion in 1976, the association said. California Sears, Roebuck plans to market pay TV in the Los Angeles area. Eugene W. Weldon, general manager of Sears' Los Angeles-Orange County retail district, said the Chicago-based retailer will sell and install National Subscription Television pay TV service beginning immediately in the San Fernando Valley. National Subscription Television is a partnership between Oak Industries Crystal Lake, 111., which manufacturers the subscription television equipment, and Chartwell Communications Group of Los Angeles.

Under the arrangement, Sears Roebuck will offer the subscription service through its customer convenience departments at its Canoga Park, Glendale, North Hollywood and Northridge stores. Pacific Far East Line Inc. will sell 3 ships and 800 barges. Directors of the financially troubled San Francisco-based company authorized the sale to correct its current operating problems. A spokesman for Pacific Far East said the company is in the process of negotiating for the sale with a number of companies and individuals.

The vessels are the luxury liner SS Monterey, retired from service in January, the luxury liner SS Mariposa, to be retired in April, and the barge-carrying ship Thomas F. Cuffe. John' I. Alioto, president, said in a statement that the sale could make available $18 million to pay current debts. Pacific Far East currently owes the Port of San Francisco $1 million in back rent and it also owes a reported $1 million to a union pension fund and several million more to creditors.

A class action suit was filed against Rolex and Slavick's. James Kaplan filed the suit in Superior Court here accusing Rolex Watch Co. Rolex Watch U.S.A. World The EEC has placed additional antidumping duties on steel. The European Economic Community's new duties apply only to three categories of steel from Spain, Japan, East Germany and Romania.

It was the first time that the two Communist states have been hit by these duties since the EEC began applying its temporary antidumping duties on Jan. 1. Spain and Japan were among seven countries penalized by EEC last week. The EEC's executive commission said it has evidence that the latest countries penalized made at least one shipment into the community this year below base prices fixed in December. The antidumping measures are a temporary step being applied until the end of March.

Japan wants an airline to buy European instead of U.S. planes. Transport Minister Kenji Fukunaga told Parliament the government feels it advisable that Japan's privately operated TOA airline buy the European A-300B Airbus instead of the Lockheed Tristar and the McDonnell Douglas DC-10. He said the European Economic Community had asked that Japan choose the Airbus to help reduce its huge trade surplus with the community. Fukunaga said the government is studying the EEC request "with understanding" and added, "If there is no difficulty, I believe it would be advisable to buy the European Airbus." But ministry officials pointed out that the government could not order the airline to buy specific aircraft.

TOA said it will place an order for aircraft later this year. Briefly Told Sony is expanding its color television production facility in San Diego. The $14 million project will add 200 jobs at the plant, which now employs 1,000 Kaiser Industries said the American Stock Exchange advised that its common stock will continue to be listed following payment of the previously announced third liquidating distribution on March 9 Western Airlines- is seeking authority to fly from Los Angeles and San Francisco to Guadalajara, Mexico, beginning July 1 Hughes Airwest will begin daily service on that date between Phoenix and Des Moines and Milwaukee Steel production in. the week ended Jan. 28 totaled 2.2 million net tons, down 5.9 from the previous week, the American Iron Steel Institute reported Jos.

Schlitz Brewing said it held "exploratory discussions" with senior management of R.J. Reynolds Industries, but the talks have been terminated Gannett bought News-Journal Co. for $60 million cash FMAMi IAS0ND 1977 BILLIONS OF DOLLARS 1975 BILLIONS OF DOLLARS -10 1976 1977 r-5 -10 -15 h-20 -25 -30 NOTE Curb Inflation Someday, Burns said, Americans will take inflation as seriously as he does and "get on energetically with the job" of fighting it. "I only hope this will come through a growth of understanding, not from a demonstration that inflation is the mortal enemy of economic progress and our political freedom," he said, recalling the way inflation had devastated Germany between the world wars. GAP NARROWS The 1977 trade deficit set a record at $26.72 billion but December's deficit of $2.03 billion on a seasonally adjusted basis (see inset) was second straight monthly improvement.

BOWS OUT AS FED CHIEF ON GLOOMY Burns Doubts U.S. Will to man of the Fed and was characteristic of the views he has expressed in 25 years of service, which began as an adviser to President Dwight D. Eisenhower. Burns, 73, a Republican economist, will step down as soon as the Senate confirms G. William Miller, a businessman and a Democrat, as his From Timts Wirt SarvicM WASHINGTON Raising the specter of Germany in the 1920s when a barrel of money could not buy a loaf of bread retiring Federal Reserve Board Chairman Arthur F.

Burns questioned Monday whether Americans have the will to combat inflation. His gloomy speech, to the National Press Club was his last one as chair.