Chicago Tribune from Chicago, Illinois • 24

(Ducago (Tribune Saturday, July 5, 1980 USUI Section 2 6 Chicago activity merger plunges No rough ride at theme parks in the recession Iff ml -'4 1 11 It V- -J f- our business. If the question is 'Will we take a beating because of the the answer is no." "Through thick and thin, our parks, virtually every year, have increased in attendance because we appeal to all groups," said Ned Dewitt, president of Six Flags, which operatessix ma By Charles Storch CHICAGO-AREA merger and acquisition activity in the first half of 1980 was down 16 per cent from the same period last year and at its lowest level in three years, according to a report by a local consulting firm. Among area manufacturing and trade companies, first-half acquisition activity was down 29 per cent from a year ago and at the lowest level in at least 10 years. In the report, George A. Parry, head of the River Forest consulting firm that bears his name, attributed the decline in merger activity to "the high cost of money combined with Federal Reserve Board pressure to reduce lending for acquisition purposes." PARRY SAID the decline in merger activity might have been sharper but for defensive divestitures by companies anticipating a sharp economic downturn.

"With interest rates down, lessening Federal Reserve pressures, the continuing economic slide, and the piling up of petrodollars overseas," Parry said, "a strong upswing in merger and acquisition activity is expected in the second half of 1980." In its report, Parry's firm counted 68 acquisition announcements affecting lo French partners aided strapped U.S. car firms UPI Ttlepnoto The operators of the nation's major "theme parks," including Marriott's Great America in Gurnee (above), hope that by providing escapist entertainment to recession-weary Americans they'll weather the "hard times." By Mark D. Frank United Pren Interrutlonel IN BYGONE YEARS, amusement parks were frequented by kids with reluctant parents in tow. Now, many parents are enthusiastic, too. And that may be the key to why many of the people who run the nation's three dozen major theme parks maintain they'll not only survive the recession, they may even do well in the midst of it.

With the emergence of the "theme park," or family entertainment center, operators boast that there's something for everyone. And, particularly, there's a day's escape from hard-time worries for the whole family for a still affordable price and, generally, limited travel expense. These days, one park official said, "we're a vacation to many people." "WE'RE IN THE business of mass entertainment," said a spokesman for the 111-year-old Cedar Point park in Sandusky, Ohio, an old-style amusement park that has successfully incorporation today's concepts. "We need things for everybody. We want adults to come, even if they don't have a kid, because there's lots to do." Tom Nowlin, marketing director of Kings Island, 20 miles north of Cincinnati, said the Taft Broadcasting, park is targeting this year's advertising "more to the family than teens" in a campaign dubbed "Sharing the good times." The elaborately designed theme park offers "ultimate" roller coasters and thrill rides, live shows and movies, shops, a gastronomic galaxy of food, and a colorful array of characters traipsing around the park from Bugs Bunny to a Hershey's kiss.

Combine it with the goal of spit-shine cleanliness and smiles and courtesy "We want adults to come, even if they don't have a kid, because there's lots to do." from park personnel important ingredients to get return customers, the park operators say and you have what officials in the $1 billion-a-year theme park business consider a combination hard to beat. INDUSTRY LEADERS and officials at many of the theme parks think their vast acreages of escapism will continue to fare well! nthe face of inflation. "People always seem to find time and money for amusement parks, perhaps because of the diversity a theme park has to offer," said Marianne Kroeger, a spokesman for the International Association of Amusement Parks. Ron Johnson, general manager of Marriott's $30 million Great America in Gurnee, located midway between Chicago and Milwaukee, said, "People will continue to entertain themselves." "We have an economical package to offer," he said. "The park is open 12 hours a day, and it's still impossible to see and do everything." THOMAS SHARBAUGII, vice president of marketing for Busch Entertainment Corp.

in St. Louis, which operates the Old Country in Williamsburg, and the Dark Continent in Tampa, put it this way: "As far as the economy is concerned, we are cautiously optimistic that it won't have a serious effect on By James Mateja THE BIG FOUR has become the Be-leagured Two. And if Detroit's financial problems aren't resolved soon. Bastille Day may join Memorial Day and Labor Day as a national holiday. American Motors Corp.

has its line of credit with lending banks frozen at $90 million and had to turn to its French partner Renault to borrow $90 million for working capital. Earlier, when Chrysler was neafing bankruptcy, its French partner, Peugeot, came up with $100 million in loans. Since France is just about of financially healthy car companies willing to help ailing U.S. concerns, things don't look bright for Detroit. IT IS IRONIC that champions of the free-enterprise system such as Chrysler and American Motors turned to governments for aid Chrysler to Washington for $1.5 billion and AMC to the French Government-owned Renault for $90 million.

"There's two government assistance programs," said Richard Haydon, analyst with Goldman Sachs Co. in New York. "Renault is a child of the French government." Analysts such as Haydon warn, however, that Chrysler, and AMC's problems reflect troubles for the entire auto industry, not just two manufacturers. "The AMC credit freeze just pinpoints how desperate the entire auto industry is," Haydon said. The cash-flow problem is apparent not just at AMC and Chrys-erl, but at Ford and GM, too.

"THE INDUSTRY is awash with cashflow troubles. Ford should lose $500 million in the third quarter of this year and around the clock. THE BIGGEST draw, however, is the thrill ride, the roller coaster. "No matter what the park people say about all their shows, attractions, animal safaris, the roller coaster is still the backbone of the amusement park," said Charles Jacques president of the Amusement Park Club of America. "There isn't anything that brings people in like a good coaster." Marriott officials tend to agree.

They're planning a new coaster for the Gurnee park to "round us out." The parks' roller coaster population increases annually, although the rate has slowed somewhat from the frentic pace of the late 1970s. WORLDS OF FUN in Kansas City has opened a new $4 million coaster, the Orient Express, and reported attendance up 27 per cent compared with last year, attributing the rise partly to the new ride. Carowinds unveiled the Carolina Cyclone Great America dared riders to challenge the Demon, and Busch Gardens Dark Continent debuted the Scorpion. "Actually the bigger, badder, scarier theory is not the prevalent one," Busch'e Sharbaugh said. "It may sound like an arms race when actually additions of coasters are just good business.

As a matter of fact, by and large, they are a good investment in terms of their payback." AT KINGS ISLAND, for example, Voss said last year's record 2.7 million' attendance was "attributed directly" to the awesome Beast, the world's No. 1 coaster in length 7,400 feet, in time 3 minutes, 40 seconds, in height drops' of 141 and 135 feet, and in speed to 70 miles an hour. If the immediate future of the theme parks appears bright, Paul Curran, editor of Managing the Leisure Facility, points out that the industry's growth in terms of construction and attendance has slowed considerably after extraordinary growth in the mid- and late 1970s. But the park operators' outlook remains upbaat. As Jacques put it, "You can forget about your job, the economy, and the worries of home." cal firms during the first six months of this year, down from 81 in the same 1979 period.

In the manufacturing and trade industries group, announced deals totaled 47 in the first half, down from last year's pace of 66 and the lowest number in at least a decade. DURING THE FIRST half of 1980. firms in the six-county metropolitan area acquired 35 companies outside the area, and "outside" firms acquired 17 Chicago-area firms, in line with last year's two-to-one ratio. Among the major merger announcements, two are in Parry's "superdeal" category. They are the merger of Southern Pacific Co.

into Santa Fe Industries, forming Santa Fe Pacific Industries with revenues of $5 billion, and the consolidation of Kraft, and Dart Industries, into Dart Kraft, with revenues of about $9 billion. OTHER ANNOUNCED acquisitions by Chicago firms in the first half include Walgreen's purchase of Rennebohn Drug Stores, Carson Pirie Scott Co. of Dobbs House, Marshall Field Co. of J.B. Ivey and Abbott Laboratories of Sorenson Research Co.

Chicago-area firms that were acquired included Beeline, by Lane Bryant, and Crane Packing by Emerson Electric Co. perhaps the same amount in the fourth quarter. GM will lose money for the full year for the first time in 59 years," he said. Haydon said too many people blame the decline in new-car sales for Detroit's woes when, in fact, the problem is much deeper and longer lasting. "The difficulty is that in today's economic world the industry has to reinvent the car to make it more fuel-efficient, and they don't have the financial wherewithal to do things anymore.

It's virtually an impossible task." AMC turned to Renault for both technology and components, such as engines and transaxles for new-generation cars. Chrysler 'is doing the same with Peugeot. Now they also need their partners' money. "RENAULT PRETTY MUCH said it wanted a business relationship with AMC and not an acquisition," said David Healy, analyst with Drexel Bumham Lambert, in New York. "But it is conceivable that if AMC continues to lose money, Renault may gain more of a hold on AMC.

It's still too early to tell." Healy said the credit freeze by AMC's banks was a reaction by those banks to both AMC's plight and Chrysler's hardship. After the 400 banks lending to Chrysler nearly got, burned on outstanding loans, "the banks got nervous" when AMC started saying it would lose a record amount of money hi both the fourth quarter and fiscal year ending Sept. 30, Healy said. "They got nervous over the size of the losses by AMC, so they served an early warning to AMC," Healy said. "What AMC did was to run for help to its French investor and, Li effect, tapped the French treasury." decided to test the two bank cards so that its decision to expand it reflects successful results in the preliminary usage.

LINDEN E. WHEELER, Sears vice president in charge of credit, said in Chicago Wednesday: "The announcement by two of the Big Three retail chains to extend their use of the bank cards means an increasing use of those cards. We at Sears are no less interested, but we want a year of testing before we decide." However, retail sources suggested that it would only be a matter of time before Sears would follow the lead of the other two big retailers and accept the bank cards in all stores. While credit sales have dropped sharply since March's implementation of credit controls, the moves by retailers to either adopt established credit cards in addition to their own or to promote credit more heavily are obviously being taken to offset the decline in credit business. As far as bank sponsors of credit cards are concerned, "the field is in a state of flux," says Peter Wood, president of A.J.

Wood Marketing Services, a credit-card marketer in Philadelphia. "SOME OF THE BIG chains have expanded their acceptance of credit cards but others, including smaller retailers, have dropped them as banks cut back after the controls were put However, as far as retailers are concerned, the effort to recoup lost credit business will undoubtedly grow. Holiday closings STOCK EXCHANGE, commodities markets, banks, and most businesses were closed Friday in observance of Independence Day. Trading will resume Monday. jor parks across the country.

HELPING DRAW 80 million visitors in 1979 were diversity, the catchword for those in the business; intricately designed theme areas, from the Old Country's Europe to Six Flap over Texas' State History to Great America's Early America; thrill rides, from the Demon to the Colossus, and big-name entertainment. PARK VISITORS dloe out an average pay-one-price of $10 per person for their average nine-hour stay and a minimum $5 more per person for food, games, and souvenirs once they're inside the front gates. Although most park admission prices have risen 50 cents to $1 this year, Gary Dalton, of Six Flag's Astroworld in Houston, said, "We are all suffering from the recession, inflation, high gas prices, and so forth, but most families are going to plan that escape. "Our ticket price of $9.95 includes the main gate admission, plus all the shows and attractions for as many times as you wish during that one day," he said. "That's a lot of money for one person, but if you figure the park is open 12 hours, it's a good buy." ONE PARK THAT adopted a new ticket program for 1980 was Kings Dominion, Kings Island's sister park near Richmond, Va.

The pay-one-price policy is not for every family member, and "some senior citizens say they aren't going to ride all the rides," according to park spokesman Vic Donovan. So the park has instituted a precedent-setting three-tiered price plan. For $6.95, a visitor can purchase a general admission or "grounds pass," which includes all shows. For $1 more, guests can buy a ticket book that allows limited access to rides. Kings Dominion's do-everything ticket is $9.95.

"Now we're giving the consumer the option of going first class, coach, or economy," Donovan said. ATTENDANCE IN 1979 was up 9 per cent at Six Flags Great Adventure at Jackson, N.J., which drew 3.3 million despite the gasoline crises said Great Adventure's Cherry Kutac. It has the advantage of drawing from both the New York and Philadelphia metropolitan areas. "Last summer we had a 5.7 per cent increase in business over the summer before," said Gary Bickett of Carowinds, which straddles the Caroli-nas' border. "Most of our business comes from primarily the two Caroli-nas 92 per cent from within 150 miles of the park.

These are the people who can make it down and back in a day. "We have not had a big problem with gasoline," Bickett sadi. In fact, fuel problems may have helped Carowinds. "It could have increased attendance a little," he said. "A lot of people are taking shorter vacations.

People are looking for things closer to home." SOME OTHER parks didn't fare as well. "We were down slightly from 1978," said Mark Littman, spokesman for Six Flags' Magic Mountain, Valencia, Cal. "The gas problem hurt us last year." Al Flores, a spokesman for Disneyland, the pioneer of today's multimillion-dollar parks, said attendance hasn't been affected by gasoline price, Agricultural Stabilization and Conservation Service ASCS, predicted officials from some south central Missouri counties will be allowed to begin taking federal drought assistance applications from farmers next week. Livestock farmers will be eligible to apply for drought aid under federal emergency feeding program, and crop producers will be able to seek relief in the form of disaster payments. TEXAS GOV.

Bill Clements said Thursday he was surprised the state has not been asked to help communities hit hard by drought and heat problems. "If this continues very much longer, we will be suffering badly in regard to crops, and I am surprised there have been no requests so far for help. But I am sure there will be some if it continues," he said. South Dakota Gov. Bill Janklow has asked President Carter to declare the state a major disaster area.

Eight western counties already have been declared eligible or the state's emergency feed assistance program. And 10 counties last week were declared eligible for Small Business Administration low-interest loans. Sen. George McGovern S.D. said he has learned 29 counties soon will be approved for low-interest Farmers Home Administration loans.

But Jim Ray, Kansas ASCS. director, says Kansas is not yet ready to apply for federal disaster aid. WHILE 100-degree-plug temperatures have devastated many crops, they have proved a boon to air conditioner repair men, who are working overtime to re Retailers to accept banks' credit cards but rather, by fuel availability. "From what we see, as long as people can get gas they will still come to the park," he said. "When they couldn't get it last May 1979, with long gas lines, we were hurting a bit.

Our attendance went down, but from then up to this point, with gas prices still going up, a lot of people are coming to the park." Disneyland managed its second-best year in its history, drawing nearly 11 million persons. MANY PARKS found an increasing number of tour buses bringing customers last summer. Others, including all Six Flags parks, Marriott's two Great America parks, and Cedar Point, installed filling stations on park grounds. "We concentrate on a 200-mile radius Milwaukee, Chicago, and Rockford," said Margie Moss, spokesman for Great America in Gurnee. "We have an area of 6 million to 7 million people from which to draw, giving us one of the best population areas a theme park can draw from.

"But the growth is in our secondary markets," she said. Great America has increased media advertising in those outlying markets and offers ticket plans to those driving distances of more than 200 miles. GREAT ADVENTURE has increased its radius from 100 to 125 miles to 175 miles this year, stressing, "You're only a tankful away." With the parks vying for the precious leisure-time dollar, competition is intensein the words of Moss, "A case of one-upmanship." "Competition is the name of the game," said Ruth Voss of Kings Island. Theme park competition is on several fronts. Parks' surveys show one reason visitors return is the park's cleanliness.

So, said Great America's Johnson, "when you have tens of thousands of people coming through your park, you have to have your act together." They match "big name" performers. Visitors may be entertained by, say Johnny Cash, Mel Tillis, and Loretta Lynn, as well as sit a spell at one of the many revues put on virtually pair overtaxed compressors and refrigerant leaks. Department and appliances stores have reported increased sales of air conditioners and fans. Richard Ruggiero, a spokesman for a Coors beer distributorship in Dallas, said sales are up "drastically." "We don't stop during the day," said Becky Horton, an employe of an Arlington, Tex. snowcone stand.

THE BLISTERING temperatures that may have contributed to as many as 90 deaths in the Southwest also have killed an estimated 1 million chickens, 25,000 turkey poults and some calves, Brown said. In Louisiana, "somewhere around to 200,000 birds are likely to have been lost," said Reginald Wallace, Louisiana Farm Bureau Federation spokesman. Brown said he received word from south Texas that cattle were being moved to market because of the lack of water. And the Agriculture Department's market news service reported that "range conditions are rapidly deteriorating." MILK PRODUCTION is down because "dairy cattle are standing in the shade of a tree instead of grazing," Brown said. "We have reports of some losses of small and newborn calves of beef cattle," he added.

With no rain foreseen, cattlemen are deciding against building up their herds, said Dr. Ernie Davis, livestock marketing specialist with the Texas Agriculture Extension Service. Federal aid due scorched farm areas Br the Asaoclated Preu FEDERAL DISASTER funds may be the only help in sight for crops and livestock dying from record-breaking temperatures in the West, but those in the business of providing relief from the heat are reporting brisk sales. Reagan Brown, Texas agriculture commissioner, said the weather over this weekend may determine if Texas has a catastrophe because of heat, drought, and insects. "It's not a catastrophe yet," Brown said, "except in south Texas where we lost a hay crop, but another three or four days without rain and it could be a real disaster." IN MISSOURI and Kansas, the drought has pushod corn crops to the brink of disaster, state agriculture officials said.

Alan King, director of the Missouri By Isadore Barmash New York Timet News Service NEW YORK Big retailers are expanding the use of bank credit cards and travel-and-entertainment cards and some plan to promote credit more extensively to counteract the lag in install-' ment sales since federal credit controls went into effect in mid-March. The Federal Reserve Board announced on Thursday that the controls will be phased out. The New York division of Gimbel Brothers began accepting the American Express card last week. Gimbels, one of the New York area's largest retailers, also will "hook into a bank computer authorization system" to test wider use of the American Express card, a store spokesman said this week. By July 15, Gimbels also will expand the use of the two principal bank cards, Visa and MasterCard, after testing them in several of its stores, the spokesman said.

And, within a month, Gimbels will embark on what it called "our biggest credit promotion in many years" to acquire 30,000 new charge accounts. FEW OTHER LARGE retailers here use both bank cards and travel-and-entertainment cards, such as the American Express card, and Gimbels will become the first conventional department-store chain in the New York area to do so. Macy's honors the American Express card but not any bank cards, relying on the Macy card for most of its charge business. Two of the country's largest retailers, J.C. Penney New York, and Montgomery Ward Chicago, a unit of Mobil said earlier this week that they planned to accept both Visa and MasterCard on a national basis.

The Penney move represents an expansion of its effort last year, a' breakthrough in the large retail-catalog chains, to honor the Visa card. In November, Sears, Roebuck Co. decided to test both bank cards. Ward's also Jack Runyan, Missouri agriculture director said pastures are turning brown, ponds are drying up, and fish are dying. WHILE RICE farmers are finding the heat beneficial, it's ruining grain, soybean and some cotton crops.

Jim Monroe, of the Louisiana Farm Bureau Federation's commodities division, said dry weather delayed soybean planting and could affect yields as much as 50 per cent. In eastern Montana, officials estimate economic losses from the drought will be in the millions. "There are areas where they won't harvest one bushel of wheat," said Bob Brastrup, executive secretary of the Montana Wheat Research and Marketing Committee. "It's a very sad situation. Some areas are completely bare there aren't even weeds growing.

The hills are just as brown as they were last winter." DAVID STRAUSS, director of the North Dakota agricultural service, said, "We'll be lucky to have small grains emerging at 50 per cent of normal." County emergency boards in western North Dakota predict 92 per cent of hay and pasture production will be lost. In South Dakota, thousands of cattle have been sold because of a lack of food and water. Market auctions have been running four times the normal sales volume, said state veterinarian D.E. Hughes. Eleven of the hardest-hit counties are estimating $180 million in crop and pasture damage so far, according to state reports.

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