The Los Angeles Times from Los Angeles, California • 27

SINESS San Diego County Tuesday, February 2, 1982 Hoc Anflrtee Sfimce CCtPart IV BV Rise in Interest Rates Abruptly Ends Stock Rally; Dow Sinks 19 GM Reports $333-Million Profit for '81 Tax Credits Were Reason for Reversal of Record 1980 Loss Cards Called Key to Major Thefts of Gas Probe Uncovers How Thieves Gain Access to Storage Facilities From Times Wire Services NEW YORK-Rising interest rates dealt the stock market its sharpest setback in more than five months Monday, bringing last week's rally to an abrupt end. Energy, high-technology and bank stocks were among the primary casualties of the sell-off. The Dow Jones average of 30 industrials, up 26.07 points last week, tumbled 19.41 to 851.69. That was the average's largest loss since it fell 20.46 last Aug. 24.

The daily tally on the New York Stock Exchange showed almost three losers for every stock that gained ground, and the Big Board's composite index dropped 1.38 to 68.01. Volume on the Big board slowed to 47.72 million shares from 73.40 million Friday. Indexes Fall Nationwide turnover in NYSE-listed issues, including trades in those stocks on regional exchanges and in the over-the-counter market, totaled 55.42 million shares. Large-block trades of 10,000 or more shares totaled 748, against on Friday. Standard Poor's index of 400 industrials fell 3.03 to 131.58, and 500-stock composite index was down 2.62 at 117.78.

At the American Stock Exchange, the market-value gave up 8.28 to 287.38. The NASDAQ composite index for the over-the-counter market closed at 186.82, down 1.57. The Wilshire index of 5,000 equities closed at 1,219.268, down 28.080 or 2.25, from Friday. A year ago the index stood at 1,342.168. For the 12-month period, the index high stands at 1,437.624.

the low In London, the Financial Times index of 30 industrial stocks closed at 572.0, off 7.8. The 1981-82 high of 597.3 was set April .30. The low of 446.0 was set Jan. 14, 1981. The Tokyo Stock Exchange 225-share index closed at 7,909.79, off 29.04.

The 1981-82 high of 8,019.14 was set Aug. 17. The low of 6,965.52 was set March 13. Bond Prices Fall Bond prices fell as two banks raised their prime lending rates to 16' from 15 and concern continued about the surge in the nation's money supply and the Treasury's $20-billion schedule of borrowing this week. Prices on long-term bonds rose as much as $15 for each $1,000 in face value.

Federal funds, the interest on overnight loans of uncommitted reserves among banks, traded as high as 15.75. That compared with an average 13.98 in the week ended last Wednesday and an average 12.04 in the week ended Dec. 9, 1981, before rates started turning higher. The policy-making arm of the Federal Reserve Board meets in Please see STOCKS, Page 2 PATRICK DOWNS Ixs Angeles Times Sol Price, founder of Fed-Mart, continues his merchandizing philosophy at Price Club, a chain of retail membership stores located in warehouse-like settings. By DONALD WOUTAT.

Times Staff Writer DETROIT-Despite weak car sales. General Motors Corp. managed to show a profit of $333 million in 1981, compared with a record loss of $762.5 million in 1980, the company said Monday. But the after-tax profit was largely the result of tax credits to which the company is entitled because of its heavy investment in new plants and equipment. GM said that without $123 million in tax credits last year and profits from its insurance and finance operations, its pre-tax loss was $138 million.

Sales for the year rose to $62.79 billion, compared with $57.73 billion in 1980. In the fourth quarter, GM reported a net profit of $97 million, against a profit of $62 million in the same period a year before. The company said its pre-tax loss, not including a $115-million tax credit and earnings from finance and insurance operations, was $136 million in the quarter. Despite U.S. price increases on 1982 models averaging $617 a car, sales in the period fell to $15.64 billion from $16.2 billion in the 1980 quarter.

Expert Pressures It was "another difficult and disappointing year," despire the improvements, GM Chairman Roger B. Smith and President F. James McDonald said. GM executives also said they expect "severe pressures on profitability in the near term," reflecting dismal industry sales in January that they blamed on the recession and high interest rates. The 1981 results were within the range expected by investment analysts, who consider GM the healthiest company in the struggling U.S.

auto industry. Assuming a gradual and modest recovery in vehicle sales, analysts say GM could earn $750 million to $1 billion this year. GM's record profit was $3.5 billion in 1978. GM, battered by the industrywide slump in car and truck sales in this country and Europe, suffered a major disappointment last week with the collapse of talks aimed at winning labor-cost concessions from the United Auto Workers union. The talks failed largely because of doubts among rank-and-file workers that GM is in serious financial trouble, and observers said Monday that those doubts are likely to grow with the news that GM made a profit in 1981.

UAW President Douglas Fraser, Please see GM, Page 3 Skin-Care Salons Cash Discount Store Magnate' Expands Sol Price Knows How To Spur Competition By ANTHONY RAMIREZ, Times Staff Writer Chevron to Quit Tar-Sand Oil Consortium in Canada By DEBRA WHITEF1ELD, Times Staff Writer By KAREN TUMULTY, Times Staff Writer Los Angeles gasoline marketers are falling victim to a scheme to steal hundreds of thousands of gallons through the theft and duplication of small plastic cards used for gaining access to gasoline storage facilities. Sources in the Los Angeles District Attorney's office say the value of known thefts has surpassed $260,000, and more are expected to be uncovered as the investigation progresses. "There are a lot of victims," says Jack Findley, president of Spark Oil a gasoline distribution firm which says it was robbed last Nov. 25 of 35,607 gallons of gasoline valued at almost $41,000. The gasoline was believed to have been taken from Atlantic Richfield Vinvale terminal in South Gate and billed to Spark Oil's account with Arco.

Simple to Execute Like other cases under investigation, the theft appears surprisingly simple to execute and almost impossible to detect until the victimized firm receives its bill from the refinery. The issue threatens to open a dispute between the terminals and their customers over who is responsible for preventing the mounting losses and who should be forced to absorb them. When a small oil distributor contracts to buy gasoline from a larger oil company, it often is issued sets of small plastic cards, similar in appearance to credit cards. In some ways, the larger company operates its gasoline terminal like a bank's -automated teller: By slipping the access card into a special device, a truck driver for the distributor may "withdraw" gasoline from the terminal. The distributor is billed automatically for the amount of gasoline taken.

In Spark Oil's case, the thief is believed to have used a copy of a legitimate card issued to Spark Oil to gain access to and load up with gasoline from Arco's Vinvale tank farm. Raids Conducted Bills of lading for the four tanker loads which were billed to Spark Oil were recovered in Dec. 18 raids by South Gate police on the residence and service station of an Arco dealer and the residence of a tanker truck driver employed by a small independent oil company. Also seized in the raid were a machine that could be used for manufacturing or altering credit cards, several hundred blank cards and several cards believed to be counterfeit or stolen. Police arrested Gordon W.

Clem-mer, 45, the owner of an Arco self-service station in Downey, and Joel Martin Smith, 45, a tanker truck driver who lives in Chino. The two men were booked on suspicion of conspiracy to commit grand theft and receiving stolen property. Released on Bail Each was released after posting $1,000 bail. Investigators say they are delaying an arraignment as they build their entire case against the two men. Clemmer has denied any wrongdoing; Smith could not be reached for comment.

Law enforcement officials say they made the raid in connection with their investigation of the April 10 theft from the Vinvale tank farm of 163,886 gallons of gasoline. The Please see CARDS, Page 4 Citing economic considerations, units of Standard Oil Co. of California and Standard Oil Co. (Indiana) said Monday that they are withdrawing from the eight-company consortium that is proposing to extract oil from western Canada's vast tar-sand deposits. The planned withdrawals cast an even darker cloud over the faltering project, which has been struggling to get off the ground for more than two years.

Officials of the two withdrawing companies had mixed views Monday about whether the project could survive without their combined 18 stake. In a press release, Chevron Standard Calgary, said it is discontinuing its participation in Alsands Energy Ltd. because it no longer believes the $13-billion project will provide an adequate return on investment even if the bureaucratic red tape it has been fighting for In on New Market That Masked Man Tries a Facial more than two years is lifted soon, as some members predict. The consortium has said its members need a minimum 20 return on investment to justify the risks of development. At $4.3 billion, which was the estimated cost of the project in 1979, Alsands "was a much more interesting project," said Carl Young, a spokesman for Chevron in Calgary.

But at $13 billion, the current cost projection, Chevron said it decided that "the (anticipated) return on investment wasn't sufficiently attractive in view of the risks involved to enable Chevron to participate in this massive venture." 'Very High Risk' Rising construction costs, which have inflated the estimated cost of the project more than 200 in just two years, also were cited by Standard Oil Co. (Indiana). Executive Please see CHEVRON, Page 2 By JANE GALBRAITH, Times Staff Writer Although he is used to being flat on his back, Oakland Raiders wide receiver Bobby Chandler was lying down this time for a different reasonto have a skin analysis and facial at the Georgette Klinger salon in Beverly Hills. "My skin gets beat up just like I do," said Chandler, explaining just why he was sitting in a reclining chair usually occupied by women. But Chandler, 32, is one of a growing number of men who are beginning to visit beauty salons regularly for about $40 a visit hoping that a skin treatment will help slow the arrival of wrinkles and other signs of age.

Georgette Klinger was among the first to cash in on a growing market for skin-care products among womenand men. As sales of skin-care products outpace those of makeup and fragrances, industry giants such as Chesebrough-Pond's, Avon and Revlon are rushing to introduce their own lines of creams, scrubs and cleansers. Expanding Business Klinger, the self-proclaimed "Dean of Skin Care," gained her reputation selling her facial preparations, mostly to women, exclusively through her salons. Now she is reaching for a bigger market in a burgeoning industry by launching a mail-order business. And her clientele is about 30 male.

"I don't know what the stigma was, coming to a place like this, but it's breaking down," Chandler said. "Men are becoming more visual." Klinger, 66, an immigrant from Czechoslovakia, established her original Madison Avenue shop in 1941 with a $15,000 loan from Chase Please see FACIALS, Page 13 SAN DIEGO-Sol Price, the founder and retailing brain behind the growth of Fed-Mart is trying to do it again. Ousted from Fed-Mart in 1975 following a dispute with the company's new German owner. Price founded the Price Club, a members-only chain of discount department stores in austere warehouse settings. His fledgling operation was in direct competition with Fedco, Gemco and other well-established membership retail outlets.

But the Price Club now has six outlets in Southern California and Arizona, and it announced plans last week to expand into Northern California. The company's sales have grown to $226.8 million in fiscal 1981, with pre-tax profit of $10.2 million. Athough Sol Price attributes the Price Club's success to his son Robert, the company president, and to a skilled management team, the driving force behind the firm is still the elder Price, a canny, bespectacled, 65-year-old executive with white hair. Impatient he told a recent visitor to ask his questions faster because "tempus was fugit-ing" and terse in conversation, he runs his company from an office as spartan as one of his warehouse stores. His desk is an oval glass table with nothing on it but a few papers and a paperweight.

Restricted Clientele In founding the Price Club, Sol Price returned to the idea that made Fed-Mart originally profitable: a restricted clientele. Before Fed-Mart was opened to the public in the late '50s, its membership was limited mainly to government employees. Similarly, the Price Club restricts its membership to two groups: Owners of small severely troubled housing industry is recovering, at least slightly. And Monday's report showed spending for all private residential constructionincluding additions and repairsrising 1 in December. However, spending for new housing units alone fell 1.2 in December, the report said.

But slower business in non-residential construction both private and public outweighed the housing gain. For all of 1981, it said, $236.3 billion in new construction was put in place, up 3 from the previous year. But after discounting for increases due only to inflation, the 1981 figure was down 4 from 1980 and at the lowest level since 1975. The same high interest rates that were a chief cause of the current recession stifled the construction industry throughout the past year, economists agree. businesses and employees from utilities, financial companies and government agencies.

The Price Club member roster now includes more than 70,000 businesses in Arizona and California and more than 400,000 families. Small-business people pay a $25 annual fee to join the club and are charged prices at a "slight" markup over wholesale prices. (Price won't say what the markup is). Rather than paying a one-time fee, the non-business membership pays a 5 markup over the small-business level. The advantages of a restricted clientele are many, Sol Price explained recently in an interview in his sixth-floor office overlooking San Diego Bay.

Employees from utilities, banks and government agencies have usually been screened by their employers for reliability and are less likely to be laid off in a recession and more likely to remain in a community for longer periods. Favorable Qualities Those qualities cut down on shoplifting, bad-check losses and other problems that can erode profits, Price says. The club also likes utility, bank and government workers because their employers generally have large credit unions. Price Club membership is marketed through these credit unions, making club advertising costs "practically nil," Price says. In addition, because of its guaranteed clientele, the Price Club does not need to spend money on amenities in the stores or be located in heavily traveled business districts.

Most are in what Sol Price delicately calls "secondary locations," un-glamorous industrial areas where Please see DISCOUNT, Page 15 Drops 1 Spokesmen for home builders and others in the housing industry say that if current, lower rates hold, they would lead to some recovery this spring but probably not much. And if interest rates begin climbing again, of course, the industry will face another bleak year. The same could be said for construction as a whole, Commerce officials indicated in a separate recent report that projected a 1 gain the value of new construction this year after adjustment for inflation. But after this year, they said, improvement should be much more noticeable, averaging 8 per year through 1986. That bright forecast, in an excerpt from Commerce's U.S.

Industrial Outlook, Includes "strong and steady growth in home building rather than a sharp cyclical rebound" from the current recession. Please see SPENDING, Page 2 Construction Spending WASHINGTON OW-Spending on new construction fell 1 in December, capping the worst year for builders since the 1975 recession, the Commerce Department reported Monday. This year won't be much better, Commerce officials said, but they predicted that the industry will be healthier in years to come, if inflation and interest rates continue to subside. In 1981, a year of bad construction figures, the report said, the December number was the worst of all $229.3 billion worth of new construction put in place at a seasonally adjusted annual rate. That was down 1 from November's $23 1.6-billion annual rate, and the lowest monthly rate since the $228.9 billion of October, 1980.

There have been separate indicationssuch as a 13.3 December increase in housing starts that the KEN LUBAS Lou Angrloii Timrn Cosmetologist Katalin Elen examines mudpack on actor Gene Woodbury as he relaxes during his facial. Inset shows Woodbury, after..