Chicago Tribune from Chicago, Illinois • 41

i. Section 3 Chicago (Tribune Friday, June 23, 1 989 Time combatants sling more mud Ticker By Charles Storch More mud was tossed Thursday in the Time-Warner-Paramount fight, this time in the direction of Warner Communications chief Steven J. Ross. Paramount Communications Inc. dredged up two scandals involving Warner, one dating back 12 years, to attack the integrity or Ross, Warner's chairman and chief executive.

Paramount did so in response to Time Inc's assertion that the journalistic integrity of Time's publications could be threatened by a Paramount takeover. Though Ross' name figured in speculation about the scandals, he was never called upon to testify before a grand jury or named or charged in either -of' the investigations, a Warner spokesman said. In a statement Thursday, Ross said Paramount's resurrection of old, resolved issues was a "a semidisguised and despicable act of desperation." Time, which is seeking to acquire Warner for $14 billion and has spurned a $10.7 billion bid from Paramount, chided Paramount for to "stale accusations." Paramount took a small swing at Ross Wednesday, when, in an amended suit filed against Time and Warner in Delaware Chancery Court, it made a reference to Ross' "unsavory past" It pressed the attack Thursday, in a response to a suit filed against it by Time in a New York federal court. Four of that document's 31 pages are devoted to Ross' integrity. Paramount discussed a Securities and Exchange Commission investigation of 1982 trading in Warner shares before disclosure of problems at Atari then a Warner subsidiary.

That probe resulted in charges of illegal insider trading against two Atari executives in 1983. Both signed a consent decree to settle the charges. Paramount also discussed a federal criminal investigation, begun in 1977, of alleged stock fraud and kickbacks involving the Westchester (N.Y.) Premier Theater. In 1982, two Warner executives and a Warner consultant pleaded guilty or were convicted in that case. Observing that Ross "was involved in certain of these investigations" but failing to mention See Time, pg.

6 Chicago Board of Trade members approved Aurora, an electronic trading system that would operate when the exchange is closed. The CBOT and Chicago Mercantile Exchange, which is about to launch an electronic system called Globex, have agreed to work on one trading system. "Without having this, we would have nothing to bring to the table," a CBOT spokesman said. Partners of Ernst Whinney and Arthur Young Co. in the US.

have overwhelmingly approved a merger that will create the nation's largest accounting firm. The merged U.S. firm, Ernst Young, will have annual revenue of $2 billion and make its base in New York. Sundstrand Rockford, completed the sale of its Trans Com Systems unit to Sony USA Inc. for about $60 million.

Initial claims for state unemployment insurance on a seasonally adjusted basis rose Warner Communications' Chairman Steven J. Ross is being targeted by Paramount. Sears piishim $1 Mllion-pMs Jobless Initial claims; in thousands 17,000 in the week ended June 10, to 326,000 from 309,000 the previous week. The Labor Department said that in the week ended June 3, 2.099 million people were receiving state unemployment benefits, up 97,000 from the previous bid for Tower 340 4 300 V''IiIJ tiyyAiiiiiiiil week. The number of 6 13 20 27 3 10 people receiving unem-May June ploymcnt benefits as a percentage ot those early next week, the sources noted.

Following that, the company is expected to whittle the bidders to one or two, with whom the company would then begin intensive negotiations over the Tower, the sources said. The three-story garage, immediately east of Sears Tower on the block bounded by Adams, Quincy, Wells and Franklin Streets, was to be demolished by Sears' development arm, Homart Development to make way for a 65-story office building. f. SW ---Vf i A AP UMiptnto Chief tax collector Sen. John Danforth Mo.) introduces Fred Goldberg Jr.

to the Senate Finance Committee on Capitol Hill Thursday. Goldberg has been nominated by President Bush to be commissioner of the Internal Revenue Service, subject to Senate confirmation. By Stanley Ziemba Sears, Roebuck Co. is attempting to ensure it will make more than $1 billion on the sale of Sears Tower by urging that bidders for the 110-story building include an offer to buy a parking garage that Sears owns east of the Tower, sources familiar with the bidding process said Thursday. The giant retailer, which said in October that it was selling the world's largest building as part of a corporate restructuring, has narrowed the number of bidders to four, including two giant Chicago-based real estate firms', JMB Realty and LaSalle Partners the sources confirmed.

However, all four qualified bidders have offered Sears less than the $1.2 billion that Sears officials expected to get for the 4.4-million-square-foot, tall, 15-year-old structure at 233 S. Wacker sources said. Instead, bids range from $850 million to figures just shy of $1 billion, the sources added. "Sears is really pushing to get the bidders to offer over $1 billion," said one source close to the bidding process. "And the way they're doing it is by insisting that the bidders include an offer to buy the parking garage across Franklin Street from Sears Tower as part of their bid for the tower." Douglas Fairweather, Sears' corporate spokesman, said he knew nothing about Sears urging that bidders offer to buy the garage as part of their tower bid.

"If I was aware of it, however, I couldn't comment on it, Fairweather said, noting that Scars was sticking to its policy of not commenting on the tower sale until the deal is completed. Sears has asked the four bidders to refine their proposals by Inland, union reach accord Steelworkers will receive wage, bene fit increases covered by unemployment insurance rose to 2.1 percent in the week ended June 3 from 2 percent the week before. John Nuveen based in Chicago, said Nuveen Performance Plus Municipal Fund Inc. raised $750 million through an initial public offering of SO million shares priced at $15 each. First Financial Bank, Wisconsin's largest thrift organization, plans to acquire Ulini Federal Savings Loan Association in suburban St Louis.

First Financial said it is acquiring the in Fairview Heights, 111., about 12 miles east of St Louis, to gain a foothold in Illinois. Prime Computer the puter maker that is the subject of a $966 million offer from much-smaller MAI Basic Four has received another offer. Under the terms, Prime is prohibited from identifying the prospective purchaser. Sears, Roebuck Co. filed with the Securities and Exchange Commission a shelf registration statement for the issuance and sale from time to time of up to $500 million of debt securities.

Marriott Corp. said it is discussing the sale of its airline catering division to a management-led group, a deal that Wall Street analysts said could bring the hotel conglomerate as much as $600 million. Dale F. Sisel, president and chief operating officer of R.J. Reynolds Tobacco International a unit of RJR Nabisco was named to' the additional post of chief executive.

Hospital Corp. of America has agreed to sell 10 hospitals and 7 nursing homes in Britain to BUPA Health Services a British health-care group, for 1 42 million. Avon Products Inc. said it will stop using animals in the safety testing of its products. Instead, Avon will use alternative methods, including clinical tests on people and historical testing data derived from an extensive computerized data base.

Rubbermaid Inc. signed a letter of intent with the Dutch chemical group DSM to form a joint venture to make and market housewares for Europe, the Middle East and North Africa. The joint venture is forecast to have sales of more than $200 million in its first year. By Liz Sly Inland Steel Co. and the United Steelworkers of America said Thursday they reached a tentative agreement on a new four-year contract.

The agreement contains wage and benefit increases, according to Jack Parton, director of the union's District 31 and chairman of the Inland bargaining committee. He would not be more specific, pending notification of the 12,000 union members employed by Inland at its Indiana Harbor works. Parton did say, however, that the agreement is "similar in some ways to the accord reached May with Bethlehem Steel which was widely expected to serve as a model for other steel companies in negotiations. The Bethlehem pact includes the immediate restoration of an 8 percent wage cut made during the last contract negotiations in 1986, as well as raises of $1 an hour in 1991 and 50 cents in 1992. Including bonuses and benefits, analysts have estimated that the Bethlehem agreement gives workers a 16 percent increase, or $4.13 an hour, over the four years of the contract.

Inland workers made no wage concessions in 1986. But, Parton said, "Some of the benefits are the same." "The Bethlehem agreement at the very least was on the table," said Inland spokesman Sam Saran, who also refused to give further details. The accord, ifra-tified, will go into effect Aug. 1, the day after the current agreement expires. Steelworkers at the, country's major steel companies have had no pay raises since 1982 and most agreed to substantial give-See Inland, pg.

6 Worldwide D-RAM chip production Top producers In millions of 1 megabit chips produced in 1988 A chip off an old smokestack theory Construction of the $150-mil-lion office tower, which was to be called the Sears Franklin Center, was approved by the Chicago Plan Commission earlier this year. Homart had planned to begin building the structure shortly after the project was approved by the city zoning board and the City Council, and was hoping to complete it sometime in the mid-1990s. But if the successful bidder for Sears also acquires the parking garage, construction of a new building there would likely be delayed foryears, commercial real estate officials said Thursday. "I would think that anyone who buys Sears Tower would want to hold off building on the garage site until they lease up the space that the Sears Mer- chandise Group will be abandoning within the tower," said Lawrence Debb, executive vice president of Chicago-based Mesirow Realty Brokerage. Sears officials have said they plan to move about 6,000 Mer- i chandise Group jobs to cheaper quarters out of Sears Tower after its sale.

An announcement on where the jobs will be relo- cated whether in Chicago, in See Sears, pg. 6 Probe set on Illinois Power cuts By Rob Karwath Officials at the Firestone Tire and Rubber Co. plant in Decatur knew they had a problem last month when the electric compa- ny warned them in a letter to expect 7 to 29 power interruptions this summer. "It's an option we would not be able to live with," said Tom Aldrich, production manager for the plant, which uses large amounts of electricity for "just about everything" in its production process. Firestone has joined about 15 other large industrial customers of Decatur-bascd Illinois Power Co.

in asking the Illinois Com-' mcrce Commission to investigate whether the utility has altered the "character" of their service by sending the May 8 letter warning of interruptions. The companies buy electricity at rates 20 to 50 percent lower than regular rates, but with the understanding that the power can be interrupted occasionally. Other utilities, including Chicago-based Commonwealth Edison have similar agreements, usually with their large industrial customers. But the Illinois Power customers, among 85 companies who have such contracts with the utility, sec an incongruity in the 7 to 29 expected interruptions See pg. 5 Inside 1.

Toshiba (Japan) 2. Nippon Electric Co. (Japan) 3. Mitsubishi (Japan) 4. Hitachi (Japan) 5.

Fujitsu (Japan) 6. Oki (Japan) 7. Samsung (Korea) 8. Texas Instruments (U.S.) 9. Siemens (West Germany) 10.

Motorola (U.S.) I 63X1 29-T1 fj Size IL2l relationship 6.9l of the ctynamicW random access s. Junk-bond creator Michael Milken defends the high-yield instruments as "freedom" for smaller companies. Page 3. DThe economy grew at a 4.4 percent annual rate in the first quarter, reflecting a rebound from the drought. Page 3.

Facing a U.S. suit, American and Delta airlines drop plans to form a global computer reservation system. Page 4. memory cnip XV Total shipments In billions of dollars for all D-RAM chips $15 Business facts 10 rtfyP vy Total hours worked per year In hours per year per By Merrill Goozner The great industrial policy debate of the early 1980s was aimed at saving America's faltering smokestack industries. But in the end, it was high-technology companies that embraced the concept.

The latest evidence that the high-technology sector is actively seeking government support for an industry-wide approach to solving its problems came Tuesday, when seven computer and semiconductor manufacturing giants banded together to meet the Japanese challenge in manufacturing advanced computer chips. The companies International Business Machines Advanced Micro Devices Digital Equipment Hewlett-Packard Intel LSI Logic Inc. and National Semiconductor Corp. plan to invest as much as $1 billion in a new company, U.S. Memory that will manufacture the next generation of computer memory chips.

The chips are called 4-mcgabit dynamic random access memory chips (D-RAMs). The jargon means that the chips will be able to store 4 million bits of information on reprogrammable circuits contained on a sliver of silicon the size of a fingernail. The new chips will be widely used in the next generation of high-definition televisions, facsimile machines, advanced work stations and personal computers. They will replace for the most part the existing $9 billion 1 -megabit D-RAM market, which is dominated by Japanese manufacturers. While U.S.

Memory is a consortium, it will not be like Sc-matech, the semiconductor industry's research and development arm. The Austin, organization sought a $500 million infusion from the government to match industry contributions. The seven companies behind U.S. Memory have already invested $50,000 each to develop a business plan for the venture. The new company eventually will seek $1 billion from its members, from other companies that want to join and from venture capitalists.

While it won't seek government financial support, it will have to get the blessing of antitrust authorities in the U.S. Justice Department and the Federal Trade Commission. A spokeswoman for the Justice Department said the agency "routinely" investigates combinations of that size. But Bush administration officials in recent months have indicated support for industry-led combinations designed to help U.S. companies compete effectively in world markets.

In several recent speeches and op-cd articles, Attorney General person employed In top Industrialized countries 1985 '86 '87 '88 "89 90 '91 '92 '93 Britain Projected figures Chicago Tribune Graphic; Sources: Dataquest Inslat France U.S. 1,533 1,609 1,630 I 1,704 2,129 West Germany Canada Dick Thornburgh indicated an openness to new antitrust legislation that would allow joint manufacturing consortiums. The department hasn't endorsed any of the four bills pending in Congress. U.S. Commerce Secretary Robert Mosbachcr also has thrown his support behind some kind of antitrust relief.

Congressional experts believe U.S. Memory will require new legislation. "It appears to be a combination of horizontal competitors, and there are vertical agreements as well," said U.S. Rep. Thomas Campbell a Stanford economist and antitrust expert who sponsored a bill giving antitrust relief to manufacturing consortiums in high-technology See Chips, pg.

6 Japan Chicago Tribur Graphic; jf Source; British infornwjfon Services.