Chicago Tribune from Chicago, Illinois • 22

Section 2Page 6 (fhicacjo (Tribune Saturday, August 27, 1983 Continental VP to step down Melick to take health leave, retire this year Productivity up at 6.1 annual rate for quarter I i Productivity in the U.S. By William Gruber GAIL MELICK, executive vice president of Continental Illinois Corp. and Continental Illinois National Bank and Trust Co. of Chicago, has taken a leave of absence on what he called "doctor's orders" and will retire by the end of the year, it was announced Friday. Melick, 55, who headed the bank's operational, personal banking and commercial finance units, had been considered a potential candidate to become its president or board chairman upon the retirement of those executives.

He was given the additional responsibility for the domestic operating units of general banking services last August when the bank announced several resignations, retirements and firings of officers in the wake of its losses stemming from the -defunct Penn Square Bank. The general banking services operation had previously been headed by George Baker, the bank's former fourth-ranking executive, who resigned in December. Baker is now a younger associates who can and should take on more responsibility and for the organization," he said. I believe my decision is best for all." AS IF to put down any suggestion of a management disagreement, Melick added, "Roger Anderson (board chairman) ana the management at Continental continue to have my fullest respect and support." Anderson said Monday he intended to remain with the bank until 1986, when he reaches the retirement age of 65, but he said nothing about the plans of John Perkins, the 62-year-old president, or Donald Miller, 63, vice chairman, except that they continued to be key officers of the organization. Melick's responsibilities have been divided among other executives at the bank.

The personal banking and community bank units will report directly to Perkins; J. Joseph Anderson, executive vice president and comptroller, will be responsible for the operations area of general banking; and Eugene Croissant, executive vice president, will be re- special limited partner of Bear Stearns Co. HOWEVER. QUESTION'S about Melick's status arose Monday when the bank announced that Edward Bottum, former head of trust and investment services, was taking over general banking services immediately. At the same time, David Taylor, head of treasury services division, became a front-runner in the executive session race by being named vice chairman of the bank and its parent company.

Taylor, Bottum and Melick were not connected with the Penn Square loan relationship or named in stockholder suits that are pending against the bank's top officers. "My decision to take a leave of absence at this point is based principally on medical reasons," said Melick, who joined Continental in 1952 in its general training program. "It's doctor's orders. "Also, as the succession management process has progressed here, I have had an opportunity to consider what would be best for me, for Percent change from previous quarter; seasonally adjusted annual rates 7 Gail Melick sponsible for check processing, general services, area development and customer relations. Protective services will report to William Plechaty, executive vice president and auditor.

Corporate planning, research and development will report to Roger WASHINGTON APJ Riding the national rebound from recession, U.S. business productivity surged at a 6.1 percent annual rate in the second April-to-June quarter, the government reported Friday. That was the fastest pace in nearly eight years. Analysts generally said it was unlikely such an increase would be repeated soon, but lasting effects of recession-inspired cost cutting could help keep efficiency rising, they said. Productivity, as calculated in the Labor Department report, measures changes in the amount of goods and services the economy turns out in an hour's paid working time.

Solid gains in such efficiency of production are considered vital to keeping U.S. industry competitive with the rest of the world. The second-quarter gain, covering all businesses except farming, was "a very healthy pickup," said Robert Ortner, the Commerce Department's chief economist. HE AlSO NOTED that unit labor cost, measuring the wages paid to produce a single unit of output, actually declined at a rate of 1.6 percent in the second quarter. That was the first drop since 1975.

Nonfarm business "sector" 'Revised i TJ1 1 1 1982 1983 il I.ifn Inlil ml In' I i I I Business ticker 1st 2d 3d 4th 1st 2d 3d 4th Chicago Tribune Chert; Source U.S. Daparlmeni of Labor. Bureau of Labor StabtUca ii. 'CV-VJA AP Laserphoto James Alderdice left and his brother, William, owners of the collapsed International Gold Bullion Exchange, at a press conference in Ft. Lauderdale, last month.

IGBE pair wins look at books "The trick will be to keep it down as we go through 1984 and 1985," he said, adding that such an achievement wouldgo a long way toward ensuring that inflation stayed relatively low. Hourly compensation rose at an annual rate of just 4.3 percent in the second quarter, the least since the final quarter of 1971. However, the nation low rate of inflation meant "real" compensation still edged up at a rate of 0.1 percent. Ortner and other analysts noted that big productivity increases were typical in the months after a long recession such as the 17-month 1981-82 downturn. The measure normally rises early in a business recovery since many companies are increasing output while remaining cautious in rehiring workers laid off during the recession.

Relatively low numbers of workers are producing, at least temporarily, more goods than usual. TO SOME EXTENT, the second-quarter gain was normal, agreed Sandra Shaber, director of consumer economics for Chase Econometrics in Bala Cynwyd, Pa. "But to some extent it also reflects longer-lasting improvements in production which should keep down inflation and make a contribution to living standards," she said. Both Ortner and Shaber said that a big July increase in employment, reported earlier by the Labor Department, would probably mean a smaller productivity gain in the third quarter. However, they also said increases would still continue, at least partly, in Shaber's words, because "there has been extraordinary moderation in wage demands." In addition, she said, "after the agonies of this recession, there have been some really striking reductions in costs, and all of that cost-cutting is making business more productive." FOR EXAMPLE, she said, white-collar business divisions such as planning and analysis "viewed, whether rightly or not, as have been trimmed or even eliminated in some companies.

Friday's new figure was a revision of the government's earlier estimate that nonfarm productivity had risen at a 4.3 percent rate in the April-June period. The revised estimate showed the biggest quarterly gain since the 6.6 percent rate in the third quarter of 1975, then also as the economy was rebounding from recession. Unit labor costs dropped at a rate of 2.7 percent in that 1975 quarter. Productivity had risen at a rate of 3.7 percent in the first quarter of this year after increasing at a rate of just 1.3 percent in the final three months of last year. IN THE SECOND quarter, total output rose at a rate of 12.7 percent, while hours worked increased 6.2 percent, and hourly compensation, 4.3 percent.

For all U.S. business, including farming, productivity grew at an annual rate of 5.7 percent in the second quarter, revised upward from the 4.1 percent rate reported a month ago. In that wide category, total output rose 12.5 percent; hours worked, 6.5 percent; and hourly compensation, 3.5 percent. All the figures were adjusted to discount for normal seasonal variations. by selling discount metals on delayed delivery and then failing to make shipments.

The brothers were unable to persuade Franza to reduce their bonds, set at $500,000 each on the New York charges and $200,000 apiece on the federal indictment. The Alderdices claimed their potential assets include a gold mine in Alaska and a Broadway play and said the two would produce enough money to repay all their investors. Franza was skeptical about the play, "An American Dream, which is not in. ''The The-' atrical Index," a list of plays that have opened, are scheduled to open or are planned for production. THE ALDERDICES' attorney, David Bogen-schutz, said 6 to 12 relatives and friends would accompany the brothers when they go to search through the records at IGBE's plush offices in downtown Ft.

Lauderdale. Bankruptcy officials involved in the liquidation of IGBE, closed under court order in April, will go along to make sure no records are tampered with. "1 think we can do it," William Alderdice said. "I don't think we can do it in a week, but I think we can make a dent in it." FT. LAUDERDALE, Fla.

AP A Broward County judge has ordered that two brothers who owned the collapsed International Gold Bullion Exchange be granted five working days out of jail to test whether they are serious about auditing the company's books. "I suggest that at the next status hearing, you come back with more than, 'I need more Take one box of records and do it well," Circuit Judge Arthur Franza told William Alderdice, 39, and his 26-year-old brother, James. "If nothing can be done in five days, no glimmer, nothing can be done." Franza ruled Wednesday that the Alderdices should get five 10-hour furloughs from jail next week, under guard, to peruse the bankrupt company's 500,000 financial documents. "If they want to show us where the money went and nobody else can, I would give them the opportunity, Franza said. "I'm going to give the Alderdices an opportunity to prove their innocence." THE BROTHERS are being held in the Broward County Jail on federal and New York state charges of fraud.

The indictments charge they defrauded customers of up to $40 million Foote, Cone agrees to buy NCK Foote, Cone Belding Communications Inc. has agreed in principle to acquire NCK Organization a New York-based firm with its top billings in overseas markets, especially Europe. FCB, active on the acquisition front in recent years, said the NCK deal would involve stock. NCK, which dates from the old Norman, Craig Kummel agency, last year reported billings of $433.5 million. Included in that figure is NCK Organization's interest in Altschiller, Reitzfeld, SolinNCK.

Principals of that New York agency said it would return to its former independent status. FCB also confirmed it had no plans to merge the Altschiller, Reitzfeld agency, billing $52 million, into its operation. The acquisition of NCK will strengthen Foote, Cone's European network of offices, making the combined operation the fifth biggest in Europe. Virtually all of the NCK offices will operate under the FCB banner. The merger of NCK will provide Foote, Cone with offices in Switzerland, Austria and Norway for the first time.

NCK and FCB have some of the same clients, including S.C. Johnson Son and Kimberly-Clark, in some overseas markets. The new combined agency will have 49 offices in 27 countries. FCB Communications, which includes Foote, Cone Belding and other firms in the communications and advertising businesses, had worldwide billing of $1.2 billion in 1982. 3 Du Page banks vote to merge Shareholders of three Du Page County banks Oak Brook Bank, First National Bank of Oak Brook and Metropolitan Bank of Addisonvoted to combine into a new multibank holding company called First Oak Brook Bancshares Inc.

The merger is expected to be completed Sept. 30. The new company will have combined assets of $168 million, said Eugene P. Heytow, chairman of Oak Brook Bank, who willhold the same post at the holding company. Heytow also is chairman of Amalgamated Trust Savings Bank and heads an investor group that has proposed Inlying First Federal Savings and Loan Association of Chicago.

alters Xerox consent order -The Federal Trade Commission has modified a 1975 consent order with Xerox and the change is expected to facilitate the firm's advertising and promotion of new copying machines. The FTC deleted parts of the consent order that prevented Xerox from taking orders for the sale or lease of any new machines more than three months before they would be available. The order settled the agency's 1973 charge that Xerox had monopolized office copier patents. The deleted parts of the order were to expire in 1985. In modifying the order, the FTC ruled that greater competition in the copier market removed the danger of Xerox's gaining a monopoly.

wins round on dividend A Delaware Chancery Court has denied a motion by National Education Corp. for a preliminary injunction barring issuance of Bell Howell previously announced dividend of convertible preferred stock. National Education, which owns about 4.9 percent of Bell Howell stock, would not say whether it plans to seek a permanent injunction and have the dividend declared invalid. The dividend, payable at the rate of one convertible preferred share tor each 20 common shares, was issued Friday to holders of record July 26. It is part of Bell Howell's two-tier antitakeover defense.

files common stock offer Chicago North Western Transportation Co. said it filed a proposed public offering of 1.25 million shares of common stock with the Securities and Exchange Commission. The offering will be managed by William Blair Co. and Salomon Brothers. Proceeds will be used for general corporate purposes.

Northwestern Steel posts loss Northwestern Steel and Wire Co. said it narrowed its net Joss to $5.3 million in its fiscal fourth quarter, ended July. 31, from a loss of $14.6 million a year earlier, as sales plunged nearly 50 percent, to $31.2 million from $60.7 million. However, Northwestern's loss widened in its fiscal year, to $19.2 million from a loss of $14.2 million in fiscal 1982. Yearly sales fell 48 percent to $167.7 million from $323.3 million.

The company noted the 1982 year-end and fourth-quarter losses included a $12.2 million charge for the writedown of certain assets. Republic's pilots OK pay cut Leaders of Republic Airlines' pilots union tentatively approved a 15 percent wage cut, effective Sept. 1. The reduction and a freeze on scheduled pay increases would be in effect for nine months. The agreement must be ratified by the Master Executive Council of the Air Line Pilots Association, which is expected to make a decision in about five days.

Capt. Crab's on way to area Capl. Crab's Take-Away a Miami-based fast-food chain featuring garlic and steamed crabs, has signed a multiunit franchise agreement with Seafoods Restaurants a unit Lunan covering most of Illinois and two counties in Indiana. Lunan owns and operates 32 Arby's Roast Beef restaurants. The first Capt.

Crab's is being built at 801 Roosevelt Maywood, and will open in late October. About 20 Capt. Crab's are planned for the Chicago area. Spectrum TV up for sale Parent writes off subscription systems Dow quietly tacks on gain of 7.01 Stock Market Aug.26. 1983 Composite table Volume 73,054,720 Issues traded 1,930 884 I 1 Unchanged 41l- Dow Jones Industrials I I 119207 7.01 I i P.

500 162.14 1.30 N.Y.S.E. Index 93.80 0.62 Chicago Tribune Chart; Baaed on N.Y.S.E. tradea By Charles Storch UNITED CABLE Television Corp. has written down its subscription television business and has put its three STV systems up for sale, including the Spectrum service in the Chicago area. Stephen Kent, vice president of marketing for United Cable's STV subsidiary, Home Entertainment Network Inc.

HEN, said the STV systems in Chicago, Minneapolis and Cincinnati would continue to broadcast until a buyer was found. "It's conceivable Ithe three services could go as a package or in pieces," Kent said. Paul BeckeTheimer, HEN executive vice president, said United hadn't had any talks yet with prospective buyers. He said that if the systems weren't sold, "We have no plans to shut operations down or to change them at all." STV IS A pay-TV service, usually single-channel, broadcast over-the-air to home TV sets equipped with special signal decoders. STV was once considered a fast-growing business, but the recession and competition from multichannel cable TV have contributed in the last year to an almost 30 percent decline in the number of STV subscribers and a shutdown of STV systems in many cities.

Denver-based United Cable reported Thursday that it lost $30.4 million in its fiscal year ended May 31. The net loss included a $19.3 million deficit from STV, which was accounted for as a discontinued operation, and an estimated $13.7 million loss for disposing of that business. Kent said United Cable decided to "return its focus to cable TV." He said HEN recently ceased being a cash drain on its parent. "We have turned the corner and are making a profit in each of our cities." In the Chicago area, Spectrum leases broadcast time from WFNB Channel 66. The two-year-old service, United Cable's largest, has about 40,000 subscribers.

The number of subscribers has fallen at least 10,000 in the last six months, but Kent said the service had recently "stablilized." In Chicago, Spectrum competes with Oak Industries ON-TV and SportsVision, which is owned by the Chicago White Sox and other local teams and which also is seen on area cable-TV systems. NEW YORK IAPJ The stock market regained some of the losses it sustained earlier in the week with a modest rally Friday in quiet trading, After the close of trading, the Federal Reserve Board reported that the basic measure of money supply known as Ml was $200 million lower in mid-August, its second straight weekly decline. The Dow Jones industrial average rose 7.01 to 1192.07, trimming its loss for the week td 2.14 points. Gainers outnumbered losers by about 4 to 3 on the New York Stock Exchange. The NYSE's composite index climbed 0.62 to 93.80.

Nationwide turnover in NYSE-list-ed issues was 73.05 million shares. STANDARD Poor's index of 400 industrials rose 1.53 to 182.80. 500-s(ock composite Index was up 1.30 at 162.14. The American Stock Exchange's market value index rclosed at 227.16, up 0.68. Analysis said maneuvers by the Federal Reserve in the money markets Thursday were Interpreted as a signal the Fed was sticking with a relatively restrictive monetary policy.

"This intervention probably signaled that the Fed has no intentions of easing," Henry Kaufman, chief economist of Salomon Brothers said in a weekly commentary. LATE FRIDAY, the Fed released minutes of the July 12-13 meeting of its policy-making arm, which showed that a further slight tightening of credit conditions was approved, but the Fed also left open the possibility of easing credit conditions if the growth of some of the broader meas- ures of the money supply slowed to targeted ranges. The decline in Ml didn't measure up to analysts' estimates of a drop of $500 million to $1 billion. The Fed said Ml edged down to a seasonally adjusted $516.9 billion in the week ended Aug. 17 from a revised $517.1 billion the previous week.

The previous week's figure originally was reported as $516.9 billion. Ml includes cash in circulation, deposits in checking-type accounts at banking institutions and nonbank travelers checks. THE YIELD ON three-month Treasury bills shot up to 9.29 percent from 9.15 percent just before the release of the Fed figures. The price of 30-year Treasury bonds, which move in the opposite direction of interest rates, fell more than $10 for each $1,000 in face value, after the report. With Ml expected to rise in the weeks ahead, hopes have dimmed for any substantial relief from high interest rales this summer.

The dollar rose sharply on foreign exchange markets, fueled by rising U.S. interest rates. In London, gold fell $5.25 an ounce to $418. On the New York Commodity Exchange, gold closed up $2.10 at $419.60. In later New York trading at Republic National Bank, gold was up $1.75 at $419.25.

Offer made for 7 buildings One North Western Center included in package CANAL-RANDOLPH Corp. or New York has received an offer to buy its seven office buildings, including One North Western Center, an property at 165 N. Canal St. in Chicago, it was announced Friday. Raymond French, Canal-Randolph president, said the other buildings are in New York; Peterson, N.J.: Birmingham, and Anaheim, Los Angeles and Orange, Calif.

Other parties hold part ownership in three of the properties, including the one in Chicago. French declined to disclose the proposed price or the identity of the prospective purchaser. He said the offer was made with "certain contingencies but he declined to elaborate. Canal-Randolph senior management will make an immediate study of the offer, he said. "The board of directors will have to determine I whether to sell, but in this world everything is available for a price," French added.

One North Western Center, whose major tenant is the Chicago North Western Transportation is about 92 percent leased. A major remodeling and refurbishing program was largely completed about 18 months ago, though some interior renovations continue..