Dayton Daily News from Dayton, Ohio on October 8, 1987 · 33
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Dayton Daily News from Dayton, Ohio · 33

Dayton, Ohio
Issue Date:
Thursday, October 8, 1987
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Thurs., Oct. 8, 1987 Dayton Dally New and Journal Herald sjs, 33 Journal of Business Wednesday's market rr DOW 2.45 lHJ closed at 2,55 1.08 fl NYSE -0.43 L--l closed at 178.55 m AM EX -2.89 I J closed at 352.55 it NASDAQ -2.87 1 I closed at 444.64 " S&P 500 -0.68 ' ' closed at 3 18.54 WIWILSHIRE -$0.08 m closed at $3, 147.946 Full report, Page 34 WORLD Kohl takes stand West German Chancellor Helmut Kohl on Wednesday warned against a "trend toward protectionism" in the U.S. Congress and rejected complaints that his country was not doing enough to boost the world's economy. ' West Germany "has gone as far as it can without seriously endangering growth at home," Kohl told West German bankers. He said West German imports have increased at four times the rate of exports in the past 18 months. NATION Indictments issued The heads of two Texas savings and loan associations and five businessmen were indicted Wednesday for allegedly conspiring to inflate the value of Texas real estate to fraudulently obtain -more than $100 million from five thrift institutions, Justice Department officials announced. , ' Four of the five S&Ls involved in the alleged fraud scheme have gone out of business, the Justice Department officials said. The seven businessmen were accused of using their own and other thrift institutions to make loans at inflated values to develop ers, with $100 million in proceeds from the loans diverted for the defendants' personal profit. a Changes at Rockwell Robert Anderson,- the chairman and chief executive officer of Rockwell International Corp. since .1979, will be succeeded by company President Donald R. Beall when Anderson retires in February, the company announced Wednesday. Officials for the Pittsburgh-based Industrial technology company said the change is "in line with longstanding succession planning." Anderson, 66, is expected to remain with Rockwell. STATEMETRO Taft changes name Taft Broadcasting Co. on Wednesday was renamed Great American Broadcasting Co. as it was taken over by a partnership headed by Cincinnati financier Carl H. Lindner Jr. FMI Financial Corp., which Lindner heads, closed the $1.45 billion purchase of Taft on Tuesday. It announced Wednesday that it had organized a new board of directors. New braking system Honda Motor Co. Ltd. on Wednesday introduced the first anti-lock brake system to be incorporated entirely in the wheel hub of a motorcycle. The MC-ALB sys-.tem prevents brakes from locking up and skidding during hard braking, but is lighter and more compact than competing systems, Honda officials said. 1 Honda did not announce which motorcycle models would incorporate the system. Observers expect the Gold Wing built in Ohio to be one of the models equipped with MC-ALB. Video disk training , The NCR Technical Education Center is viewing a satellite teleconference Friday on new applications of Interactive video disk training. The telecast, from the University of Nebraska, will feature seven award-winning uses of laser video disk training ranging from educational to military. -. The program, from 1:30 to 4:30 p.m., is open to representatives of local companies Interested In learning more about uses for Interactive video disk. Those planning to attend should contact Dr. Sharon Brown at 435-0181. Baeks v Y- 11 : n J n f ma I iH-: 1 Wednesday f- 7 1 J I I L 1984 1985 1986 1987 UAW, GM agree on pact principles By Allen Roberts BUSINESS WRITER United Auto Workers and General Motors Corp. negotiators in Detroit have agreed on the principles of a new contract and are working out formal contract language to present to local union leaders Monday, a union negotiator reported by telephone Wednesday. Announcement of a formal tentative agreement is expected as early as today, but no later than Monday. If the momentum were stopped, the UAW could call a strike Monday, when its GM Council of local presidents and shop chairmen convenes in Chicago. The GM contract with 366,000 UAW workers with few exceptions would match that reached last month between Ford Motor Co. and about 104,000 UAW workers, the negotiator said. The chief exception is that GM would apply the full "Guaranteed Employment Numbers" program to its assembly workers, but would apply only a watered-down version of the job security program to its components workers, the negotiator said. The GEN program in the UAW-Ford contract prevents Ford from laying off assembly or parts workers in most situations, excluding production cuts caused by weak sales. Under the pending GM contract, however, the GEN program would not prevent layoff of workers in parts plants that cannot reach productivity and quality targets, the negotiator said. General Motors will not deviate from the Ford settlement in terms of wages and benefits, the negotiator said, although the automaker had initially Expert predicts few changes in income tax By Judith L.Schultz BUSINESS WRITER Individuals and business owners can expect little change in the U.S. income tax rates through 1988 but a lot of difference in how tax returns are filed, ac cording to the former commissioner of the Internal Revenue Service. Roscoe L. Egger Jr. said here Wednesday the revised tax rates in the 1986 Tax Reform Act will hold at least through the 1988 presidential election but the outcome of that election is crucial to what happens afterward. Egger thinks Congress will not be inclined to go beyond Egger three levels of tax rates for individuals. In 1987, the legislators created five interim tax brackets ranging from 1 1 percent for couples with up to only $3,000 Misguided GOP 5 It is indicative of the paralysis and disarray on the political right that five Republican senators can find nothing better to do than hold up the confirmation of C. William Verity Jr. as Commerce secretary. Unable to cogently articulate a Central American policy or sidestep the often hysterical opposition to Supreme Court nominee Robert Bork, the right has splintered into an ugly mess of single-issue convulsions much like the left did after its two-time trouncing by Ronald Reagan. In this case, five senators, led by Jesse Helms of North Carolina and Alfonse M. D'Amato of New York, take exception to Verity's advocacy of greater trade with the Soviet Union, saying such commerce is out of place with a totalitarian regime. raise prime rate to 9o25 Each bank sets its prime lending rate. Most banks follow the lead of large money-center banks in adjusting their prime rates. Wednesday's adjustment was announced by Citibank and Chase Manhattan Bank. ASSOCIATED PRESS called for a flat wage differential between assembly and parts workers. The Ford contract gave 3 percent wage increases during the first year of the three-year contract, and equivalent gains in lump sums during the second and third years. The national contract between GM and the UAW would affect nearly 4,000 UAW-GM workers here, plus more than 14,000 members of International Union of Electronic Workers and United Rubber Workers locals at GM plants in Dayton, Moraine and Vanda-lia. Local leaders expressed ambivalence about the rumored GM contract. "Some say it looks pretty good, but others say the Ford agreement doesn't go far enough in solving our problems," said Rick McKiddy, shop chairman of the UAW Local 696. The local represents about 3,800 brake producers at GM's Delco Moraine Division plants in Dayton and Moraine. McKiddy said it was unclear whether the proposed contract would further the powers of local unions to prevent GM exportation of parts jobs to non-UAW workers. Locally, the UAW Local 696 on Tuesday reached the main table in negotiations for a contract with Delco Moraine. About 100 of 265 initial demands and 1,000 of 1,950 grievances remain unresolved. "The issues ahead of us are the major issues: work standards, interplant transfers, subcontracting, and outsourcing of both production and skilled trades jobs," McKiddy said. Delco Moraine has already received corporate permission, he noted, to source one brake system now built at Moraine to an outside vendor. annual income to 35 percent for couples earning up to $90,000. In 1988, a permanent two-tier system goes into effect, 15 percent for joint filers with income up to $29,750 and 28 percent for everyone else. If the top rate slides upward or a third tier is added, Egger said, it probably will range between 32 percent to 35 percent "because Congress has made a contract with the public that its members don't feel they can break. Politically, "you can't take away people's deductions and then raise the rates," he told a group of Dayton corporate tax accountants in a program sponsored by Price Waterhouse of Dayton. If a Republican is elected to the White House, expect a push for a consumption tax or value-added tax as a solution to federal deficit spending, he said. Egger served as IRS commissioner from 1981 to 1 986 before returning to his job at Price Waterhouse. The painful act of paying taxes will get simpler, meanwhile, as the IRS gears up for more electronic tax return filing. JON TALTON BUSINESS EDITOR Verity, a Middletown resident and former chairman of Armco Corp., is by all accounts a decent and savvy businessman, committed to free trade. He would be an articulate and effective salesman for the Reagan economic agenda. Yet these Republican senators who I am sure would hastily compromise if North Carolina tobacco or New By Allen Roberts BUSINESS WRITER Most Miami Valley lenders increased their prime lending rate from 8.75 percent to 9.25 percent Wednesday, following moves by Citibank, Chase Manhattan and other New York money centers. The increase in the prime, which by tradition dictates rates on commercial loans and now affects an increasing proportion of consumer and mortgage loans, pulls the national norm to heights not seen since March 1986. That month, the rate fell from 9.5 percent to 9 percent and continued falling to 7.5 percent by September last year. This year, however, banks have boosted prime rates four times as Increases in short-term U.S. Treasury rates increased the banks' cost of funds . for lending. Wednesday's jump of 50 basis points, I 1 ASSOCIATED PRESS Kid video Fisher-Price quality control inspector Charlie McGregor surveys an inventory of PXL 2000 TV monitors at West Aurora, N.Y. The monitor, coupled with a video camcorder and accessories, is said to be the first system marketed for youngsters. The retail price will be about $225. toy with York banking interests were at stake would hold up Verity's confirmation at a time when the Republican administration desperately needs to Win One for theGipper. As I've written before, the issue of trade with the Soviet Union is a troubling and thorny Issue worthy of debate. But the actions of these senators will do little to address an issue of little Interest in Peoria and much to further wound the administration's economic policies. If such actions are politically unproductive, they could be positively dan-gprous for the U.S. and world en li'imit'S. Vfrity will face the toughest test of his uireer in diffusing the protectionist bomb being assembled in Congress. It Is far from certain how the trade legisla or hundredths of 1 percent, marked the the broadest advance this year. "That's a big jump," said Tom Lyons, executive vice president of First National Bank of Miamisburg. "I just hope it doesn't go much higher. It'll shut down the good times we've been having, especially in real estate." Through August, construction spending in Clark, Greene, Miami and Montgomery counties ran 49 percent ahead of last year's levels, the F.W. Dodge Division of McGraw-Hill Information Systems Co. reported last week. The boom appeared to die with the summer's tightening of money supplies. The year's 85 percent improvement in commercial spending slowed to 25 percent during August. Residential spending reversed completely, plunging from its 25 percent improvement through the year to a 16 percent decline during August alone. "We've seen some slowing already. Egger said the Cincinnati IRS regional office was the first to try paperless returns in 1985, when about 7,000 professional tax preparers used computers to transmit returns to the government. Last year, about 70,000 electronic returns were filed, and a half million will be filed for 1987. Within the next five years, the individual taxpayer may be able to file a return from his home computer. Combined with electronic funds transfer, taxpayers could expect a refund within three to five days instead of the current six to eight weeks, Egger said. And the error rate from clerks retyping information into IRS computers will drop 10-fold to about 2 percent from today's 20 percent error rate. The IRS also is experimenting with electronic document storage, placing individual and corporate tax account information on laser disk. Retrieving account information takes about 60 seconds from any place in the country compared to about eight weeks now. Even though Congress is expected to to consider a tax reconciliation bill this session, corporations can expect little unsettling changes, Egger said. fire in Verity fight tion will emerge, but without a forceful advocate for free trade we could end up with a disaster of retaliatory tariffs and inflexible responses. Such actions on the part of the U.S. will almost certainly bring on a deep recession worldwide. A record trade deficit continues to hurt the country. Verity and his department face the test of how to genuinely boost exports at a time when some of our best trading partners in Latin America are in an economic slump. The historic U.S.-Canadian agreement, which would eliminate trade barriers between the two nations by 1999, is another vital policy initiative awaiting Verity, who will not only have to sell it to critics on Capitol Hill, but also soothe ruffled feathers in Ottawa. Even in his own department, Verity Money is getting tight, and people are reluctant to pay the higher interest rates . . , residential buyers in particular. The commercials will begin to slow down," Lyons said. Nonetheless, the Miamisburg bank planned Wednesday to increase its prime rate to 9.25 percent today, as did Gem Savings Association. "We still see a strong demand in the commercial side of things," said Jim Sachs, Gem senior vice president. "I expect the demand to remain strong in the foreseeable future, the next few months. But I understand that nationally, the residential trends are down. That magic number of single digits seems to be the barrier there." Rates on 30-year government bonds, for example, have increased more than two percentage points since February. Those rates have spilled over 10 per- SEE PRIME36 Earnings improve for Mead Market growth, pricing . pay off in 3rd quarter By Judith L.Schultz BUSINESS WRITER ' Mead Corp. said Wednesday it earned $97.4 million, or $1.55 per share, in the third quarter, compared to $25.3 million, or 41 cents per share, for the same period a year ago. t The current results include a 68-cent-per-share gain on the sale earlier this year of six corrugated container plants and Mead's 50 percent interest In a linerboard mill. The 1986 results included a 25-cent-per-share loss from discontinued operations. Even minus those one-time -.ins, Mead earned a record third-qu;ter profit from continuing operations of' $54.6 million, up 33 percent, compared to 1986 third-quarter earnings from continuing operations of $4 1 .0 million. Third-quarter sales were $1.11 billion, up 33 percent from $837 million in the third period of 1986. Included this time were sales from ZellerbachTPaper Co. and Ampad, two acquisitions made in 1986. ; For the first nine months, net tarn-ings were $183.5 million, or $2.92 per share, compared to $82.5 millioi, or $1.32 per share, for the same period last year. Those earnings also were a record before the non-recurring,; third-quarter gains. 1 Sales through three quarter were $3.15 billion, compared to $2.29 billion in 1986. ;4 Burnell R. Roberts, Mead chaijjman and chief executive officer, predicted a record 1987. I "The outlook remains very good! Demand for Mead's products in domestic and international markets reniains healthy and pricing is improvjhg," Roberts said. "Mead is experiencing an unprecedented combination of good markets and strong operating performance! and the immediate outlook suggests that those conditions will continue. Meftd is on track for a record year." ' Roberts said Mead has been able to increase its prices in many product lines including coated and uncoated papers, corrugated products and 'carbonless papers due to increased demand. Many paper products are on allocations to customers. ; A restructuring of operations also is beginning to pay off, Roberts said. ; Demand for Mead's pulp and lumber continued to improve as world producer inventories of pulp began the third quarter at a seven-year low. Mead's electronic publishing business, Mead Data Central of Miamisburg, posted solid sales and earnings improvements during the quarter. : faces some problems. Allegations surfaced this week that a Commerce official involved in U.S.-Japan trade talks offered to become a lobbyist for Japanese automakers. But beyond putting out fires, Verity has a rare opportunity to shape some history. Despite the President's political troubles, his and British Prime Minister Margaret Thatcher's legacy of free markets and private Initiative is on the move throughout the world. 1 As Commerce secretary, Verity could be more than Just a political appointee or figurehead. With his business acumen and understanding, Verity could help forge the policies that would advance economic prosperity worldwide. First, though, the Republican gang of five needs to get out of Verity's way. ,

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