The Los Angeles Times from Los Angeles, California • 39

Japan May Make New ousiness I'miice Lockheed L-1011 Mode 1 i I i 1 x. Jr i TUESDAY, AUG. 22, 1972 i j. a Negotiations Could Lead to Production of Twin-Engine Airbus BY MARVIN MILES Tims Airouac Wrlttr STORM WARNINGS California Corporations Commissioner Brian R. Van Camp discusses details of proposed that would restrict fees for promoters and set minimum income requirements for investors in state's active real estate syndicate business.

Times photo by Jumrs Caeca vo Regulator Proposes Tougher Real Estate Syndication Rules GLADNEY Writer Stock Prices Firm Up in Late Trading; Dow Advances 1.36 NEW YORK () The stock market resisted profit taking well Monday, firming in late trading for a narrow gain. The Dow Jones industrial index closed at 967.19, up 1.36. Prices dipped on the American Stock Exchange and on the over-the-counter market. The Amex price-change index fell 0.03 to 26.93 and the NASDAQ com- posite index slipped 0.14 to 131.29. Corporate bonds strengthened but municipal issues softened.

One analyst said there was a definite upward bias to the market. "There is an anticipatory feeling on Wall Street that the Republicans will try to make their convention interesting by a few announcements on the war and the economy," he said. Another analyst also thought the market was getting supportive power from investor anticipation of good news from the GOP convention. Rally Expected He added that the market was "consolidating, base forming for an assault on the 1000 mark of the Dow Jones industrial average." Many analysts were predicting the Dow would reach 1000 by the end of the summer. The record for the blue-chip, indicator was 995.15 reached in February, I960.

Advances led declines 712 to 6S0 among the 1.772 issues traded on the New York Stock Exchange. Volume dropped to 14.29 million shares from 16.45 million on Friday. The New York Stock Exchange index of more than 1,400 common stocks, however, dropped 0.0 1 to 61.50 McDonnell Douglas topped the Big Board active list, closing down Pi at on 382,700 shares. Most of the volume came in a block trade of 349.700 shares at 32'2. Gulf Oil.

up Vi to 25as on 250,100 shares, was the second-most-active issue, followed bv S. S. Kresge, down 2' 2 to on 216,300 shares. Kres-ge's net of 21 cents a share for the most recent quarter was lower than some analysts had predicted. Dynamics Corp.

of America, up 1 i to 3. was the biggest gainer in terms of percentage, while the sharpest percentage drop was recorded by Belding Hemingway, down 2:,8 to 16. Big block trades of 10,000 shares or more included: Please Turn to Page 15, Col. 1 Lockheed Aircraft Corp. and Brl-tain's Rolls Royce confirmed Mon-.

day that discussions are under way with Japan that could lead to the production in that country of a twin- v. engine version of the Lockheed Trf- star airbus. In response to overtures from Japanese government, Lockheed's 'V; California division, Burbank, has'-3 proposed a shorter-haul than the Tristar (L-1011) in conjuno tion with the Canadian firm, Cana-dair. The Douglas Aircraft Beach, a division of McDonnell" Douglas St. Louis, and the Boeing Seattle, also confirmed, discussions with the Japanese on milar projects, but declined to ela-.

borate. Lockheed spokesmen said the-'- project as proposed would involve design work here, with Lockheed and Canadair sharing major produc- tion with the Japanese. Final sembly would be in Japan. As currently envisioned, the plane unofficially dubbed both the Bistar and the Twinstar would not be certificated until the fall oX L976, with production of all widejooie'fl; twin-engine transports expicted to crest about 1985, an estimated 1,100 aircraft in all. Shorter Plane The Lockheed plane would be feet shorter than the trijet.

or 14S feet overall. It would have the same type wide-bodied fuselage, with a passenger capacity of 180 to 200 persons, compared to the L-1011's 206 16 400. Maximum gross weight be 285,000 pounds, 145,000 pounds 'n I less than the Tristar. The transport would have a wing and two of the same Rolls-" Royce engines that currently -lr the Tristar up-rated from 42,000 to; 45.000 pounds of thrust. The plane will require a new taiL structure because of elimination of' the center (tail) engine from the i Tristar design.

The 11011 project has been plagued by rising costs. Lockheed. said recently it would need to sell 275 of the jets to break even; the new figure compared with a pre vious estimate of 255 to 265 aircraft. If the firm manufactures an extend-ed range version of the L-1011, the break-even point will go above 300 aircraft. Lockheed deliveries and firm ders for the L-1011 now total 110 air- craft.

The corporation also has 54. second buys. A second buy repre- sents an intent to purchase, stronger Part 111 one UHF station owned by Field Communications Chicago, to the partnership company. The new company is 77.5 owned by Kaiser Broadcasting a wholly owned subsidiary of Kaiser Industries, Oakland, and 22.5 owned by the Field unit, a wholly owned subsidiary of Field Enterprises Chicago. The five Kaiser stations are in Boston, Cleveland, Detroit, Philadelphia and San Francisco.

The Field station is in Chicago. A sixth Kaiser station, KBSC-TV in Los Angeles, is not in the gi'oup to be transferred because, a spokesman said, it is scheduled to be sold. The World asked permission to sell stock in Japan to aid U.S. expansion. Nikko Securities chief underwriter of the proposed 750,000 share offering, said in Tokyo that General Telephone Electronics Corp.

applied to both the Japanese Finance Ministry and the U.S. Securities Exchange Commission. New York-based General Telephone hopes its move will raise $20 million to expand its investments in its U.S. subsidiaries, Xikko said. It added that the U.S.

firm is the first foreign company to seek funds in Japan through public sale of its stocks. Atlantic Richfield pulled out of a trans-Canada oil pipeline group. In a terse statement from Xew York, Atlantic Richfield Co. said its Canadian subsidiary "gained sufficient knowledge" from three years with Mackenzie Valley Pipe Line Research Ltd. to conclude that "a trans-Canadian line is not a viable alternative" for moving North Slope oil south.

The research group, comprising seven firms, began in 1000 to plan a route from Prud-hoe Bay to Edmonton, Ala. bv wav of Inuvik, X.W.T. Last week, a U.S. district court lifted a two-year ban on construction of a route across Alaska 800 miles to the port of Vald-ez. Atlantic Richfield is a member of the Alyeska Pipeline Service Co.

consortium that has promoted the Yaldez line. At the Top Southwest Forest Industries named Raymond Baker its new president. Baker succeeds Gene C. Brewer, who will become vice chairman of the board of the Phoenix-based firm. Baker, who will officially assume the office Sept.

1, has beenexecutive vice president and manager of Southwest's paper products group. William M. Riegel, now president of the subsidiary Riegel Products will become executive vice president and manager of the paper products group. J. B.

Edens remains chairman of the board. Andy Granatelli will be chairman ond chief executive of STP Corp. Directors of STP Ft. Lauderdale, elected former race-car driver Granatelli to the dual position Monday. Granatelli, who founded the petroleum additive products company, had been president and chief executive officer.

Carl Stursberg who was executive vice president, was elected STP's president, Former board chairman Walter Heinze will be chairman of a newly created executive committee which includes Granatelli, Stursberg and two other company executives. Briefly Told Textron Inc. President G. William Miller predicted the company's net income and earnings per share for 1972 "should be at record levels." The U.S. aluminum industry produced an average of 11,242 short tons of the metal daily during July, up from both the previous month and a year ago Western Airlines had net income during July of $2.5 million, up from $2.2 million a year ago Phelps Dodge Cable Wire Co.

raised prices on all copper building wire products Sentry Insurance, reported it "took a major stock position" in Alexander Howden Group England's third largest insurance brokerage National Airlines had July net income of $1.97 million, compareH to $1.77 million a year ago Rexene Polymers raised prices up to 22 cents a pound on some polyethylene resins White Motor Corp. forecast 1972 sales of more than 132,000 domestic farm tractors, the best year since 196S National Bankamericard Inc. signed a contract with TRW Inc. for a communications system to link all Bankamericard member banks for faster authorization checks Pan Am had net income of $9.02 million in July, up from $6.65 million a year ago Kop-pers Co. raised prices 4 cents a pound on some anti-oxidizing compounds used in the rubber, plastic, oil and food industries.

National The ICC suspended for 15 day; some operating rights of Aero Mayflower. In an order issued Monday, the In-terstate Commerce Commission halted for 15 days a large portion of the commercial interstate moving rights of Aero Mayflower Transit Co. the nation's second largest household goods mover. A spokesman for the Indianpolis-based privately held company declined comment, saying the company had not yet received the order. The ICC order prohibits the company from transporting furniture, fixtures, equipment and property of stores, offices, museums, institutions, hospitals or other establishments.

The commission has been investigating alleged Mayflower violations of ICC household goods regulations. The Fed decided in May to slow down growth in aggregate U.S. reserves. Reporting three months later, as Is customary, the Federal Reserve Open Market Committte said it set a target growth rate of between 7.5 To and 11.5 at its May 23 meeting for reserves available to support private non-bank deposits. The so-called reserve aggregate has been emphasized recently by the Fed as a short-run gauge of its fiscal policy decisions.

In seeking "somewhat slower growth" in May, the Fed said it hoped for "some firming of money market conditions." The St. Louis Federal Reserve Bank reported last week that reserve aggregates grew at an annual rate of 7.9 in the most recent four months, versus a 4.1 growth rate in the last five months of 1071. California Trans-World Financial set Nov. 4 to spin off its bank subsidiary. The previously announced spin-off by Trans-World Financial Beverly Hi lis, of its commercial bank subsidiary, Trans-World Bank headquartered in Sherman Oaks, will take the form of a stock dividend on Nov.

4 to Trans-World shareholders of record Sept. 5. The company earlier indicated the spin-off was designed to comply with federal laws requiring divestiture of bank properties by savings and loan holding firms. Trans-World owns Loyalty Sacramento, and World Los Angeles. Trans-World shareholders will receive one share of the bank's stock for each 10 shares of the holding company they own.

The holding company will retain a 4.99 interest in the bank. A Kaiser partnership asked for FCC approval to transfer TV licenses. Kaiser Broadcasting a new Oakland-based partnership formed Aug. 17, applied to the Federal Communications Commission to approve transfer of licenses for five Kaiser-owned UHF television stations and Sll 90 SO 70 60 S50 40 20 20 10 S00 2B 24 22 20 in; MmiCms 18 16 14 12 10 8 714 1 721 f728S4 811 818 825 WEEKS ENDING YESTERDAY A HEW YORK The Dow Jones 30 industrial stock cveroge closed ot 967.19, up 1.36. High during th day was 974.19; the low, 953.16.

The Amex closed off O.C3. LONDON The Financial Times index of 30 industrial stocks closed ot 528.1, off 1.0. The 1972 high of 543.6 wos set Moy 10. The 1972 low of 470.4 was set Jsn. 10.

Profits Up for Broadway-Hale, Federated Department Stores BY GEORGE Timts Staff A form of investment known as a "real estate syndication" which has become increasingly popular in the past few years as a means of reduci If ng an individual income tax habil- mav be destined for closer regu lation in California. Brian R. Van Camp, commissioner of the slate Department of Corporations, has proposed a set of more stringent rules for those who put together the syndicates. Among other things, the rules would cut fees paid to the syndicators. The commissioner has scheduled the first of three public hearings today at the Old State Building, at First and Spring Sts.

at 10 a.m. Others will be held Thursday in San Francisco and Aug. VA) in Sacramento. Syndicates have boon around many years, but it was not wuil changes in the securities laws in the late VMh that their activity noticeably spurted. Resources Pooled As a limited partnership form of group investment, the investors (limited partners) together invest their money in real estate, often large income-producing apartment complexes.

The organization and management of the syndicate, including selection and purchase of syndicate property, is normally done by a group of promoters, known as the syndicator or general partner. The primary appeal to Investors is its "deep shelter" income tax advantages, based on high-leveraged (a high percentage of borrowed money) investments with attractive depreciation schedules and limited liability. Promoters say syndicates allow small investors to participate in big- FACTORY ORDERS FOR DURABLES OFF WASHINGTON (DJ) The Commerce Department said Monday new factory orders for durable goods dropped 2.9 to a seasonally adjusted $34.59 billion in July after gaining by 3.8r'c in June. "The decrease was largely due to defense orders" which plunged to $1.33 billion from $2.94 billion in June, the Department said. New orders for non-defense capital goods edged up to $9.28 billion from $9.23 billion in June, the department said.

New orders for primary metals, machinery and transportation equipment were all below their June levels. Factory shipments of durables in July rose 4.4 'r to $34.59 billion after declining 1.7re in June. PENNSY CASE HELD ICC Official BY ROBERT J. SAMUELSON Exclusivt to Tht Timet from tti Washington Post WASHINGTON The collapse of the Penn Central almost buried the idea of a "transportation conglomerate" under a heap of abuse. Penn Central had engaged in heavy "diversification," spreading into real estate development, pipelines, and against the law air cargo.

The theory was simple: profits from the non-transportation companies would help support the distressed railroad. The results turned out to he otherwise. Numerous post-bankruptcy studies showed that the "profits" of Penn Central subsidiaries often were fictions the products of imaginative or over-optirnistic accounting. Instead of providing the railroad with cash, the diversification cost the Penn Central more than it ever received in return. These studies did not go unnoticed at the Interstate Commerce Commis money investments In real estate, with the added tax writeoff benefits.

Some industry spokesmen claim that if Van Camp's proposed rules were put into effect as they stand, syndicate activity would cease in California and perhaps elsewhere as well. Van Camp's main concern is that public investors have not been adequately protected and informed about promoters' fees and the nature of the investments. However, Van Camp says, "We are not out to kill the real estate syndicate business we are at the factfinding stage. Where injustices and inequities threaten the public investor, then it's our responsibility to step in and stand firm." The proposed rules on which Van Camp expects the biggest opposition from promoters are: Please Turn to Page 1.1, Col. i Astrodafa's Plan for Reorganization Approved by Court Astrodata the Anaheim-based computer systems firm which has been in Chapter 11 proceedings since December, 1970, said Monday its reorganization plan has been approved by the federal Bankruptcy Court.

Cnder the plan, which was announced last November, a group of investors led by Dan W. Lulkin and Louis Marx Jr. will take over the troubled firm for about $1.5 million in rash. Astrodata said the l-for-10 reverse stock split, which was approved by shareholders Aug. 3, has become effective.

Herbert L. Brown, president and chief executive officer, said the Luf-kin-Marx group would not take over "official" control until the end of this month. He said the group would own between IV and 77 'o of Astrodata's outstanding stock, depending on the firm's net worth as determined by an audit in the near future. "We are still operating in the red," Brown said. "It will probably take us some months to turn this company around.

Our first job will be to go out and rebuild the business we lost during the bankruptcy proceedings. In the nine months ended Dec. 25, 1970 (the last period for which figures are available), Astrodata suffered a net loss of $9.5 million on sales of million. The operating loss before extraordinary items was $4.3 million. MISLEADING Defends I ransit sion, the agency charged with regulating the railroads.

Stung by criticism that it failed to understand, or stop, the Penn Central's diversification program, the ICC seemed to enlist in the anti-conglomerate campaign. The agency pressed ahead for legislation to increase its control over conglomerates. And released its own studies critical of "diversification." The impression seemed clear: the ICC wanted transportation companies to stick to transportation. Wrong Impression The impression was wrong. So said Commissioner Kenneth H.

Tuggle in a speech that the ICC went out of its way to publicize. "Today's commission has not determined that diversification is necessarily bad for transportation companies, or inconsistent with the public interest in transportation," he said in San Francisco. Tuggle gave a long list of healthy regulated companies including than an option but not as detinue as a direct order. GETZE t'l Writar the first six months of fiscal 1972 were $8,937,000 or 42 cents a share, against $7,695,000 or 37 cents a share last year. Sales were $380,853,000 versus $328,421,000.

-i Cincinnati-based Federated, which operates Ralphs supermarkets, Magnin and Bullock's department- stores in California, said net income for the three months ended July was a record $14,949,139 or 34 cent; a share, up from $13,903,664 or 32' cents in the second quarter last; year. Sales were $581,754,105. a gain of 12 over the $519,653,827 reported a year ago. Steady Improvement 1 In a prepared statement, Federat- ed said its sales have been ing steadily over the past year de? spite temporary lags due to unsea-v sonable weather. B'or the first half of fiscal Federated Department Stores said earnings were $30,375,003 or 69 cents a share, up from $28,151,041 or; 65 cents last year.

Sales were 564,450 against $1,010,731,807. Marcor the Chicago-based" parent of Montogomery Ward Container Corp. of America, said second quarter earnings jumped. -27 to $12,658,000 or 34 cents a share from $9,924,000 or 25 cents a share a year earlier. On a fully dilut-N ed basis, per-share earnings were 31 cents versus 25 cents.

Sales for the second quarter were $789,617,000, up 10 from 000 in the same three-month period a year ago. "Consumer buying and intentions to buy are the strongest we have witnessed in the last two said Marcor ChairmanLeo H.i"., Schoenhofen. "We believe sales and; profits will continue their present. improvement through the balance of the year." First-half earnings of Marcor were $24,305,000 or 65 cents (60 cents, ful-lv diluted) a share compared with S21.003,(KK) or 54 cents (53 cents, ful- ly diluted) a share a year ago. Sales 'J were compared with Please Turn to Page 11, Col.

1 BY JOHN Timt Stall Four major U.S. retailers Broad-wav-Hale Stores Federated Department Stores Marcor Inc. and S.S. Kresge Co. each reported substantial second-quarter sales and earnings improvement over comparable 1971 periods.

Broadway-Hale Stores, Los Angeles, said profits for the second quarter ended July 29 were a record S4.704.OOO or 23 cents a share, a gain of loc'c from $4,103,000 or 20 cents reported a year ago. Sales totaled $195,623,000 during the period, a gain of from last year. Results have been restated to include the acquisition of Bergdorf Goodman a New York-based department store chain. Broadway-Hale said earnings for Conglomerates Greyhound Bus (which acquired Armour-Dial, the nation's second largest meat packer, in 19G9), the Union Pacific Railroad, and a host of trucking firms that could be classified as conglomerates. According to Tuggle, two factors had been overlooked in the Penn Central debate: SLx other railroads in the northeast are not in bankruptcy "none of (these) six is distinguished for diversification." Thus, even if diversification had hurt Penn Central (and Tuggle remained noncommital on that), the major causes of its collapse probably lay elsewhere.

Mismanagement has been blamed; so has the eroding industrial base of the East, which has squeezed freight volume while costs have been rising. Diversifying could offer advantages to transportation companies, particularly railroads. For example, railroads, with high fixed costs, are extremely sensitive to business Please Turn to Page 15, Col. 2 aim.