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The Los Angeles Times from Los Angeles, California • 37

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Los Angeles, California
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37
Extracted Article Text (OCR)

I 'X wmm'" i is i. iWWxi w- 3 Hike Home Loans to 1 5 V2 Jo Cos Angeles Slimes Business -J LEYLAND'S SHARE OF BRITAIN'S r5 BRIGHT SPOT-Leyland's Rover 3500s are shown in the finishing area at the new Solihul plant. These modern facilities are an exception. Outdated plants, labor strife and bad management have steadily reduced the company's share of the British auto market. British Leyland Future Hinges on the Success of Its Streamlining Effort Rate Hike Follows News of Record Interest on T-Bills By JOHN A.

JONES Times Stiff Writer The nation's three largest savings and loan associations Monday raised their lowest home loan rate to a record 15V4, up a full percentage point from the 14Va rate they quoted last Friday. At the same time, Bank of America, San Francisco, the nation's largest commercial bank and one of the heaviest real estate lenders, raised its prime fixed-rate home loan charge to 15 from 14. The three raising their rates are Home Savings Loan Los Angeles, Great Western Savings Loan Assn. and American Savings Loan both Beverly Hills-based. California Federal Savings, Los Angeles, said late Monday that it had raised its prime loan rate to 15V4.

The sharp jump in the rate for new home loans came shortly after the Treasury announced that the average yield to investors in 26-week T-bills at Monday's auction rose to a record 14.792, up more than a full percentage point from last week. This is the rate of interest paid to savers on six-month money market certificate accounts at banks and savings and loans. The certificates, available to savers with at least $10,000 to invest, have accounted for an increasing share of bank and savings deposits as interest rates have repeatedly set new records in recent weeks. A survey by the Federal Home Loan Bank of San Francisco showed that 30.7 of the total savings at 20 large in California, Arizona and Nevada were in six-month certificates during January, up from 29 in December, 1979. officials, forced to pay increasingly higher interest for such a large share of their savings, say they have no choice but to raise their home loan rates.

Some other large including Gibraltar Savings, Beverly Hills, Glendale Federal Savings and Coast Federal Savings, Los Angeles, said Monday that they would try to hold their rates down. Glendale quoted 14 for a variable interest rate mortgage and for a fixed-rate loan. Coast and Gibraltar said their lowest rate remained 14V6. Officials at those associations indicated that their rates would be reviewed this week, however. of A raised all of its conventional real estate loan rates a full percentage point, to 15 for a fixed rate loan and to 14 for its two variable-rate programs.

Industry spokesmen said some now are making loans only to buyers of homes on which they already hold mortgages a device to restrict loan volume traditionally used when funds are tight. The San Francisco regulatory bank reported that in its three-state district had a modest net savings gain of only $310 million in January, smallest for that month since 1974. Meanwhile, bankers indicated Monday that they may raise their prime commercial loan rates, which recently jumped to a record 16 at leading banks. Three major banks raised their broker loan rates to 16. Crocker National and Chase Manhattan banks raised theirs three-fourths of a percentage point, and Bank of New York went up one-half a percentage point to reach the new rate of 16 for loans to stock brokerage firms.

By WILLIAM TUOHY Tims Stiff Writer CC PART IV TUESDAY, MARCH 4, 1980 Dow Falls 8 as Inflation Battle Lags Frem Times Wire Services NEW YORK-The stock market slipped into a steady decline Monday, erasing the gains of last Friday's rally. Trading continued to taper off, setting its slowest pace so far in 1980. Stock prices moved up Friday amid anticipation of a possible government announcement over the weekend of new measures against inflation. When the weekend passed without any announcement, analysts noted, the market quickly retreated. The Dow Jones average of 30 industrials, which rose 8.70 on Friday, fell back 8.79 to 854.35.

New York Stock Exchange volume totaled 38.69 million shares, down from 38.81 million Friday and the lightest total since a 31.53 million-share day on Dec. 31. Nationwide turnover in NYSE-list-ed issues, including trades on regional exchanges and over the counter, came to 43.97 million shares. Large blocks of 10,000 or more shares traded on the NYSE totaled 510, compared with 526 for Friday. The daily tally on the NYSE showed losers running almost 2-to-l ahead of stocks gaining in price.

The exchange's composite index of all its listed common stocks slipped 0.60 to 64.35. Standard Poor's index of 400 industrials was off 1.35 at 127.93, and '500-stock composite index slipped 1.16 to 112.50. The American Stock Exchange market-value index dropped 2.10 to 301.38, and the NASDAQ composite over-the-counter index closed at 156.87, off 1.16. In London, the Financial Times index of 30 industrial stocks closed at 463.5, off 3.6. The 1979-80 high of 558.6 was set May 4.

The low of 406.3 was S6t Nov 15 The Tokyo Stock Exchange 225-share index closed at 6.793.56, up 15.27. The 1979-80 high of 6,838.98 was set Feb. 14, 1980. The low of 5,925.87 was set April 10. American Telephone Telegraph, a leader of Friday's advance with a 1 -point gain, dropped back to 48 in turnover of better than 625,000 shares.

filed with the Federal Communications Commission for increases in interstate and overseas rates. Oil and bank issues also posted some notable losses. In the oils, Texaco dropped 1 to 39V4; Standard Oil of California 1V6 to 78; Indiana Standard 2V6 to 113; Mobil IVi to 78, and Exxon to 64V6. Among actively traded banking issues, BankAmerica was down Yt at Please Turn to Page 2, Col. 4 0 iiSi 1 ROBBERY FRAUD i 5 aa4i production and employee morale; years of bad management have led to the production of aging lines of cars that are no longer competitive in the market; years of lackluster salesmanship have left Leyland's sales trailing those of the imports.

A few weeks ago, British Leyland's share of the domestic market dipped to 15 an all-time low. The company had 40 of the domestic market in 1971. Imports accounted for just 5. Recently, a confidential report from a Paris-based management consulting firm, Eurofinance, made the following criticism of the condition of British Leyland: "As a result of the damage suffered in the 1970s, British Leyland is now the smallest and weakest full-range motor vehicle manufacturer in the world (with 1.9 of the world market share). It has no overseas production (as opposed to assembly) bases, an aging and uncompetitive product range and is pitifully short of skilled technical and engineering resources.

Market share is shrinking and dealers are defecting." When Edwardes, 49, took over as chairman in 1977, he was well aware Flease Turn to Page 10, Col. 1 LONDON-The full-page advertisements in the newspaper exhort readers: Buy a British Car! But British cars, at least those made by the state-owned auto giant, British Leyland, continue to stockpile unsold in the vast parking lots outside company plants. British Leyland is in critical straits, and its chairman, Sir Michael Ed-wardes, is walking a knife edge as he tries desperately to stave off collapse. Although Edwardes won a recent showdown with union official Derek (Red Robbo) Robinson, who publicly and heatedly opposed the chairman's "recovery plan" for British Leyland, a general strike for wages may still be in the offing. And a crippling strike could lead to the dismantling of the big auto maker a fate that might bring disastrous repercussions for the Conservative government of Prime Minister Margaret Thatcher.

British Leyland is best known in the United States for its sports cars-Jaguar, Triumph and MG but the popularity of these and other company products has declined steadily in recent years in the face of stiff competition. Ford Motor General Motors Corp. and a number of Japanese auto makers together account for about half of the new car sales in Great Britain, and other European companies take another 30 of the market. Other British auto makers, such as Rolls-Royce and Lotus, together take less than 1 of the British market. British Leyland, with about 160,000 workers, is a major employer in Britain.

The company also provides work for another 250,000 workers in "upstream" supplier industries as well as 400,000 employees in "downstream" auto distribution networks. Last year, the company spent $4.5 billion among 7,000 British firms. British Leyland remains the country's largest manufacturing exporter and the biggest earner of foreign exchange. Still, the company is deeply ailing. It lost $22 million after taxes in 1978 and is believed to have lost even more last year.

Final figures for 1979 will be announced in the spring. Years of strikes have disrupted NOT HAPPY Auto workers march in support of Derek Robinson, left, union leader and opponent of Leyland's Chairman Sir Michael Edwardes and his "recovery plan," which would hold down wages. Associated Press photos 2 More Years of Hard Times Seen for Britain growing and inflation falling below 8." But with a worsening balance of payments deficit, swelling imports, wage hikes now averaging 20 and falling investment curbing industrial growth, the economic teams agreed that Britain faces a tough time. The reports blamed world recession and hefty oil price hikes for much of Britain's economic woes, but noted these have been aggravated by domestic conditions such as labor turmoil and a chain of punishing strikes. The LBS team said it believed that "the prospects are that the next four years will be considerably worse than the last four." The reports forecast the balance of payments deficit will be between Please Turn to Page 10, Col.

3 GM Puts 2,400 on Indefinite Layoff at South Gate Plant Zenith to Enter Videodisc Market Using RCA Technology LONDON (jR-Prime Minister Margaret Thatcher, grappling with mushrooming economic woes, pondered three major economic reports Monday that all bore the same gloomy message things are going to get worse before they get better. The reports, all coincidentally published on the same day, paint a picture of tumbling industrial production, profits and investment and mounting inflation and unemployment for the next two years at least. None offered any short-term hopes for Thatcher's Conservative government, currently battling with grumbling labor unions, planning major cutbacks in state-owned industries and coping with a punishing steel strike. The reports are from the 24-nation, SYSTEM GETS under the Magnavox name. However, the MCA-developed disc equipment is technically different and thus incompatible with the RCA-Zenith projected systems.

Industry analysts expect only one of the MCA or RCA-Zenith systems to eventually dominate the videodisc market. Separately, Burbank-based Walt Disney Productions and Fotomat Wilton, agreed for Fotomat to test-market video-cassette rentals of 13 Disney films in four cities beginning as early as mid-March. And, in another video development, Magnetic Video a Farmington Hills, subsidiary of Twentieth Century-Fox Film Beverly Hills, said it has acquired the exclusive worldwide videodisc rights to 13 motion pictures and 688 Terry-toon cartoons from Viacom International New York. It also said it acquired exclusive worldwide rights, except in England, to 64 motion pic Paris-based Organization for Economic Cooperation and Development (OECD), the London Business School (LBS) and the National Institute of Economic and Social Research (NIESR). A related report from the Confederation of British Industry, Britain's major employers' organization, underlined the depressing forecasts by noting that most firms expect production to fall and their prices to rise in the coming months.

The reports said Britain's annual rate of inflation has doubled to more than 18 in the last year and will likely peak at 20 later this year, before starting to subside. The LBS said: "From 1982 onwards prospects are brighter with output MAJOR BOOST tures from ITC Entertainment including "Jesus of Nazareth," "The Boys From Brazil" and "The Muppett Movie." Under the Zenith-RCA arrangement, both firms will be allowed to share each other's videodisc technology and each company's' players will be able to accept the other's discs. Zenith, Glenview, 111., said it plans to introduce its system in mid-1981, a few months later than New York-based RCA's planned introduction. "We project that the market for videodisc players and video records can grow into a multibillion dollar business opportunity for the consumer electronics industry during the 1980s," said Zenith President R.W. Kluckman.

RCA Chairman Edgar H. Griffiths said his company is "extremely pleased" that Zenith decided to enter the market with a system compatible to RCA's. RCA has reportedly spent 15 years and well over $130 million in dev DETROIT OB-General Motors said Monday night it will lay off 6,500 workers because of slow sales, including 2,400 workers at its South Gate assembly plant. GM said it would close its South Gate plant on March 21 and one in Lakewood, on March 14, both for the remainder of the 1980 model year, which runs through August. The indefinite layoffs also affect a third plant in Flint, Mich.

In addition, temporary layoffs will hit plants in St. Louis, Janesville, and Pontiac, GM said. The auto maker had no layoff breakdown for those plants. The auto maker cited backlogs of slow-selling mid-size cars and pickup trucks for the closures. Chevrolet Caprice and Impala and the Cadillac de Ville models are assembled at the South Gate plant.

In a statement, GM said "a new small, fuel-efficient passenger car" would be put into production at South Gate but gave no further details. A GM spokesman who did not want to be named said the car to be built at South Gate also would be built in Lordstown, Ohio. That car has been widely reported in the industry to be a front-wheel drive replacement for the current subcompact Chevrolet Monza and Pontiac Sunbird. Its original introduction had been scheduled for halfway through the 1981 model year. GM's surprise announcement of the plant closings came only 10 days after the No.

1 auto maker announced with some fanfare at the Chicago Auto Show that it would recall 15,000 workers to boost production by restoration of second shifts at two plants and assembly line speedups at two others. A spokesman who asked not to be identified said those recalls would still take place. United Auto Workers officials could not be reached Monday night to comment on the latest layoffs. The Lakewood closing affects 900 workers. Chevrolet and GMC pickup trucks are made there.

At Janesville, production will be suspended the weeks of March 10, 17 and 31. On April 7, GM said, it will reduce car production to 50 an hour from 60 at the Wisconsin plant and suspend light duty truck production there the week of March 17. Separately, Ward's Automotive Reports, a trade publication, said that domestic auto makers are planning to boost second quarter production by about 4 over what they were planning a month ago, even though February production was about 14 below what it was a year ago. Ward's said the companies now plan about 2.11 million cars in the second quarter, a 3.8 increase from where second quarter schedules stood early last month. But that would still be 15 below last year's second quarter production of 2.48 million cars, Ward's said.

If current plans are met, first half production would increase by 2.4 to 2.95 million cars. By BILL SING Times Stiff Writer In a move that strengthens RCA Corp. in its battle against MCA Inc. for dominance of the emerging videodisc market, Zenith Radio Corp. announced Monday it will produce and market videodisc equipment using technology developed by RCA.

The agreement in effect will make RCA's videodisc products scheduled for introduction in early 1981 more attractive to consumers because discs made for use on Zenith's players could also be used on RCA's. Videodisc systems, which provide television sound and pictures much like videotapes but instead use a phonograph record-like platter, are projected by some analysts to become a multimillion dollar industry by the mid-1980s. Universal City-based MCA, along, with Dutch electronics giant Phillips NV, is already marketing a competing videodisc system in three U.S. marketsSeattle, Atlanta and Dallas eloping its videodisc equipment and has indicated it is not in the least worried about rival MCA's head start. "When we introduce the videodisc, we are going to take over first place and, I guarantee you, we will never lose first place," Griffiths told a meeting of RCA distributors in San Diego in December.

Both RCA and Zenith said their videodisc players will sell for under $500. By contrast, Magnavox's system is retailing for around $800 the difference stemming from their different construction. The RCA-Zenith system will use a diamond stylus similar to that of a record player to play back the video signal, while the MCA system uses a laser. Unlike MCA's Magnavox line, which is being brought out on a market-by-market basis, Griffiths has said his RCA systems will be introduced on a nationwide basis simultaneously. Please Turn to Page 10, Col.

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