The Atlanta Constitution from Atlanta, Georgia on January 9, 1981 · 39
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The Atlanta Constitution from Atlanta, Georgia · 39

Atlanta, Georgia
Issue Date:
Friday, January 9, 1981
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TT"w.ii TW ji HT"ilnf"ir ir j. THE ATLANTA CONSTITUTION brainess Friday, January 9, 1981, Page 7-C 3 10B.G "til e Ticker Reeling Dow Falls Another 15.19 National 3 Top Refiners Hike Oil Price; Supplies Drop Exxon Corp., Mobil Corp. and Texaco Inc. the nation's three largest oil companies joined several other refin-' ers Thursday in raising wholesale heat-' tag oil and diesel fuel prices as much as " '2 cents a gallon. Standard Oil Co. (Ohio) and Marathon t Oil Co. also raised wholesale prices of ; ' the products by 1 to 3 cents a gallon in the third round uf increases since last , week as cold weather continued to boost ' heating oil use and rising crude oil prices pushed refiners' costs higher. Mobil, Sobio and Marathon also said they bad raised wholesale gasoline prices t 1 to 3 cents gallon. . Meanwhile, the American Petroleum . . Institute said Thursday that U.S. crude :oil inventories fell a sharp 3.6 percent last week. Industry sources said the decline apparently was prompted by oil companies drawing down unusually high -' stocks while imports and some domestic oil supplies were falling. ' The Canadian government oil ' company Petro-Canada and VS. Industry '"sources said Mexico for the second ' straight month has sharply reduced the . amount of oil it exports. The sources said Mexico, whose ex-'.ports of 750,000 barrels a day to the ;." United States account for nearly S per- .cent of this country's oil needs, reduced ? - its exports by 60 percent following a SO v percent cut in December and blamed the ..cuts on storm damage to a port Mexico .normally exports 1.1 million to 1.5 million barrels of oil a day worldwide. Persian Gulf OPEC members Kuwait and Qatar, meanwhile, were reported by industry sources to have raised crude oil . prices $4 a barrel, while Britain was , said by sources to be boosting the price of a 42-gallon barrel of its North Sea crude $3. ; Oil Violations Alleged The Energy Department charged '. three oil companies Thursday with $680 million in violations of federal price controls as Carter administration officials rushed to complete investigations of the nation's top 35 oil companies before ; leaving office. In the complaints, the de-' partment accused Clark Oil ft Refining ;Corp., Milwaukee, of violations totaling - 6297.3 million; American Petrofina Inc., ; Dallas, of 6260.7 million in violations, and Texas City Refining Inc. of Texas of $121.7 million. Officials of the three companies named in the new allegations denied any wrongdoing, calling the dis- pute a difference in interpretation of ; complex regulations. Kennecott Ends Offer Kennecott Corp. Thursday terminated its offer to buy 4.1 million shares of Curtiss-Wright Corp. at $40 a share. Ken- - neeott said, however, that any shares tendered np to noon Thursday would be accepted and paid for. Kennecott, of Stamford, Conn, said Dec 30 it had been offered 2.08 million Curtiss-Wright shares. The reason given for terminating the offer was Curtiss-Wright's $46-a-share tender effective on Monday to buy one million shares of its own stock. Trade Gains Forecast The nation's trade picture will continue improving in 1981, despite the rising price of imported oil, a high-ranking Treasury Department official predicted Thursday. Assistant Treasury Secretary C Fred Bergsten said the US. current account should register a surplus of about $10 billion in 1981, about twice as crock as 1980's expected black ink. The current account measures not only merchandise trade, but also services, foreign aid, loans to foreigners, the movement of U.S. gold abroad and such payments as pensions to Americans living abroad. The trade gap in 1980 should total about $23 billion on a current account basis, nearly $5 billion less than in 1979, Bergsten said. International Dollar Gains Sharply The dollar rose sharply against most major currencies in trading at home and abroad Thursday. Gold prices dropped to their lowest level since mid-December in Europe, but ended the day with modest gains in New York. New York currency dealers said rising short-term interest rates helped bolster the dollar, despite a move by three major banks to reduce their prime lending rates from 20.3 percent to 20 percent Only in Tokyo did the dollar fail to improve, slipping to 200.40 Japanese yen at the close compared with Wednesday's 201.25. NEW YORK (AP) - The stock market suffered heavy losses for the second straight session Thursday, still reeling from the effects of a well-known investment adviser's "sell" recommendation. ' Oil issues and International Business Machines, the market's No. 1 stock in total market value, were among the most prominent casualties. The Dow Jones average of 30 industrials fell 15.19 to 965.70, on top of Wednesday's 23.80 drop. That left the average, which had risen more than 40 points in the year's first three sessions, back within i points of its close on New Year's eve. New York Stock Exchange volume dropped off to 55.35 million shares from Wednesday's record total of 92.89 million. ' The decline began on Wednesday after Joseph Granville of Holly Hill, Fla., recommended that subscribers to his telephone "early warning service" sell aU their stocks. Late Wednesday and early Thursday, the market staged a brief recovery. But by Thursday afternoon the market was sinking fast again under renewed selling ? pressure. The daily tally on the NYSE showed almost two ' losers for every stock that gained ground, and the exchange's composite index fell 1.09 to 76.20. Standard ft Poor's index of 400 industrials dropped 2.36 to 151.09, and S&P's 500-stock composite index was down 2.02 at 133.06. IBM, the most active issue as of the 4 p.m. close in New York, showed a 1 loss at 67. Oil issues among the volume leaders included Mobil, down 1 at 77; Exxon, off 2 at 76; Texaco, down 1 at 45; Standard Oil of Indiana, off 1 at 75, and Union Oil of California, down 1 at 40. Standard Oil of California dropped 3 to 93. Exxon, Texaco and Socal are all components of the Dow Jones industrials. Together they accounted for close to 5 points of the average's loss. In the oil-service sector, Halliburton lost 3 to 76; Schlumberger 2 to 107, and Hughes Tool 3 to 84. Losers among the glamor stocks included Tele-dyne, down 6 at 195, and Texas Instruments, 4 lower at 117. At the American Stock Exchange, the market value index lost 2.71 to 336.38. The NASDAQ composite index for the over-the-counter market was down 1.46 at 195.89. Traders looking for some encouragement after the carnage of the past two days could draw some solace from the fact that the Dow finished the first trading week of the year with a net gain of 1.71. In WaU Street folklore, the first five days of the year have a record of high reliability as a harbinger of the likely trend of prices over the ensuing 51 weeks.' Many analysts dismiss such calendar phenomena as coincidence. But the fact that the so-called "January barometer" is so widely followed nevertheless makes it a potential factor influencing some investors. CityState Ford Sets Atlanta Output Ford Motor Co. announced Thursday it will begin production of new model Ford Fairmont and Mercury Zephyr compact cars at its Atlanta assembly plant in Hapeville starting Jan. 26. The plant will continue producing the Ford Granada and Mercury Cougar models, but some of the output will be shifted to an assembly plant in Chicago. Production volume and employment levels at the Atlanta plant will not be affected by the changes, the company said. Ford also reported that although its truck sales last year slipped to 794,520 from 1,184,713 in 1979, it maintained its No. 1 truck sales position for the fourth consecutive year. Philip E. Benton Jr., corporate vice president and Ford division general manager, said the company's truck sales in 1980 wen 38,029 units higher than those of the Chevrolet division of General Motors Corp. Newsmakers :' . ; . Benatar Portman Going Ahead On Plan For NYC Hotel By Chris Jenneweii CflMHfuHeD Stiff Wrtijr Atlanta architect-developer John Portman announced Thursday his firm would begin acquiring land for a 60-story hotel in New York's Times Square, despite a federal agency's decision not to provide financial belp at this time. The Department of Housing and Urban Development informed the City of New York Thursday that it would not provide a $22.5 million "action grant,' whose funds would "round out" financing for the $261.5 million hotel. . Portman said in a statement that the application was rejected for technical reasons, but be bad been given "every possible assurance" by HUD. officials that the project would be recommended for funding in the first quarter of this year. . "On the strength of these assurances, Portman Properties will proceed to commence to purchase the site assemblage and will take all necessary steps to maintain the original project development schedule," Portman sail Plans call for construction to begin in mid-1981. The 2,020-room hotel first proposed in 1972, will be located on the west side of Broadway, between 45th and 46th streets. The hotel, which is to Include a 1,800-seat theater, is expected to draw more investment into the run-down theater district Portman noted that HUD'S rejection of the funding only applied to the last quarter of 1980 and was prompted by the need for more information. The missing element (in the application) was supplied within a short time after the deadline," said Portman. "HUD, I am pleased to say, now finds the project eligible for funding." . MS f.1 - flsnrrlff-- .jwww-ws saw - f 1 Model Of Portman's Planned Hotel Cox Agreement Ends 5-Year Tiff Naittger Leo Benatar has been elected president and chief executive officer of En-graph Inc., a Charlotte-based designer and manufacturer of packaging, product identification and promotion materials. Benatar has been president of Mead Packaging, an Atlanta-based division of Mead Corp. Engraph's subsidiaries include Colonial Packaging Corp. Standard Cap ft Seal Inc, and Technical Printing Ink Corp., all of Chamblee. . . . Coca-Cola Co. has named four senior vice presidents of Coca-Cola USA, its domestic soft-drink division: Herbert A. Arnold, Fountain Sales Department; Lawrence B. Cswart, manager, finance and operations; Mania W. Griffin, Bottler Operations; and H. Richard Hiller, planning. . . . Dale A. Naftxger has been named Southeast regional vice president of RTM Inc. Atlanta-based franchisee of Arty's roast beef restaurants. He was assistant vice president of the Ponderosa System Inc. chain of steak houses. . . . Thomas A. Cox has been appointed senior vice president, finance and administration, of Atlanta-based Cox Cable Communications, with responsibility for financial operations, purchasing, data processing services and human resources. . . . Harold B. Johnson and Richard C King have been elected vice presidents of First National Bank of Columbus. Johnson manages the credit card department and King hi in the dealer discount area of installment loans. By Breads Mooney ' Cwtttuttat Stiff WrtWr . Atlanta-oased Cox Broadcasting Corp. has agreed to increase minority and community involvement in its television, radio and cable operations here, ending a five-year dispute with two local civil rights groups. . In response, the Atlanta Chapter of the NAACP and the American Civil Liberties Union of Georgia withdrew a petition against Cox Broadcasting which they had filed with the Federal Communications Commission. The two had charged that Cox Broadcasting discriminated against minorities and that Cox Broadcasting ownership of media outlets In Atlanta was "against public interest" The settlement of the dispute, signed Dec 29 and announced Thursday at a joint ACLU-NAACP news conference, will become effective when the FCC grants renewal of Cox Broadcasting's broadcast licenses in Atlanta. As part of the settlement Cox Broadcasting agreed to spend $10 million over the next four years to promote public access and local origination of programming. The company also pledged $300,000 added to more than $1 million already contributed to Clark College's communications school According to terms of the agreement Cox Broadcasting also will "make a good faith effort" to fill one of every four vacancies over the next three years with black employees, while one of its subsidiaries - WSB-TV in Atlanta - will fill 25 percent of Its anticipated top management openings with blacks. Both WSB-TV and WSB-AM-FM radio agreed to expand community affairs programming, including more features aimed at blacks and women. The Cox Broadcasting stations will broadcast one-minute "free speech" messages weekly, in which private citizens can voice their opinions about public issues. The television station also pledged to air four minority-produced programs a year. Fred Barber, vice president and general manager of WSB-TV, said the agreement is a "confirmation" of what Cox Broadcasting stations already have been doing. Chevette Production Cut; Lakewood To Close 7 Days DETROIT (UPI) - The auto industry's weak sales pace prompted General Motors Corp. to order production cuts Thursday for its popular Chevette sub-compact the nation's No. 2-selling car in 1980. GM said plants building the Chevette in Lakewood, Ga, and Wilmington, DeL, will be closed for one week beginning Jan. 19 to reduce Inventories. The Chevette was one of GM's stars in a market favoring small cars, and its recent sales fall-off is a sign of the impact high interest rates have had on the nation's auto industry. Indefinite layoffs of VS. hourly auto-workers increased this week to 190,050 from the pre-holiday level of about 188,-000, with production cuts at Chrysler Corp. accounting for most of the increase. GM said it plans to operate all of its domestic assembly plants next week, but Ford Motor Co. and Chrysler will have 10 car and truck assembly plants down for inventory adjustment idling 22,850 workers temporarily. Another 10,600 GM employees will be on temporary layoff starting Jan. 19 at the two Chevette plants and at factories building Chevrolet Camaro and Pontiac Firebird models at Norwood, Ohio, and Van Nuys, Calif. 3 Banks Cut Prime To 20 Pet. Additional Declines Seen As Unlikely Now NEW YORK (AP) - Three major banks lowered their prime lending rates to 20 percent on Thursday, lower than most major banks but higher than the 19.5 percent prime rate set earlier in the week by Chemical Bank. Chances for further declines have dimmed for the time being, one analyst said. Economists said the current "split personality"' of the prime rate reflects uncertainty about whether interest rates have peaked and concern about Federal Reserve Board credit tightening. Dropping their prime lending .rates from 20.5 percent to 20 percent were No. 3 Chase Manhattan Bank in New York, and two Chicago banks, Continental Illinois National Bank ft Trust Co. and First National Bank of Chicago. Several smaller banks also joined the move. Chemical Bank, the nation's sixth largest cut its rate by one percentage Eint to 19.5 percent on Tuesday but no "ge banks have followed its lead. Two other major banks, Morgan Guaranty Trust Co. and Marine Midland Bank, lowered their prime rates to 20 percent earlier in the week. But most major banks remain at 20.5 percent including No. 1 Bank of America and No. 2 Citibank. "The prime has a kind of split personality," observed David Jones, an economist for the New York investment house of Aubrey G. Lanston ft Co. The prime rate applies to loans to a, bank a most creditworthy customers. A number of smaller banks have announced prime lending rates below those charged by the larger institutions. "Chances for further declines (in the prime rate) have been substantially dimmed by the stickiness in the federal funds rate," Jones said. The federal funds rate is the interest charge oh overnight loans among banks of uncommitted reserves, an Important source of funds for banks and a key peg to other interest rates. In the past week, the federal funds rate has traded in a range of 19 percent to 20 percent On Wednesday the Federal Reserve drained reserves from the banking system when federal funds were trading at 18.75 percent placing upward pressure on that rate. Until the federal funds rate eases, it is unlikely that the prime rate will move lower, Jones said. The prime rate reached a record 21.5 percent last month. Edward Yardenl, an economist with EJ. Hutton ft Co., said the split prime reflects "that there is no consensus that interest rates have peaked." The split also reflects the manner in which banks raise money for loans, he said. Some banks may be locked into longer terms than competitors for funds borrowed at high interest rates, such as large certificates of deposit Coca-Cola, N.Y. Bottling Firm Reach Agreement On Merger By Bobia Scbatx CsikMuHm Sltfl WrMr I The Coca-Cola Co. and the Coca-Cola Bot- tling Co. of New York Inc. have signed an I agreement for a $218 million merger first an- nounced in November, the companies said in a joint statement Thursday. I , The agreement calls for the bottling company, the nation's largest independent ! Coca-Cola bottler, to be merged with a wholly owned subsidiary of the Coca-Cola Co. The ! shareholders of the New York bottler, other .than Coke and Its subsidiaries, will receive $10,375 per share of common stock. The merger agreement which was exe-;cuted after approval by the board of directors of the New York company, is the first step in : Coca-Cola's plans to sell the company in a leveraged buy-out transaction. The new irompasy will be owned by a combination of ; third party investors, the current management of the Coca-Cola Bottling Company of New ! York and the Coca-Cola Co. The companies anticipate the leveraged buy-out transaction will be completed in the second quarter of 1981. The merger is still subject to shareholder approval, receipt of financing commitments from investors and compliance with regulatory requirements, Coca-Cola officials said. Another consideration is the two lawsuits challenging the merger, which were filed in Delaware Chancery Court by shareholders of the New York bottler. Both companies stated they believed the suits were without merit and they intended to "vigorously defend them." However, the status of the lawsuits at the time of closing will not necessarily delay the merger, said a Coca-Cola spokesman. Coca-Cola may waive all of the conditions other than the requirement for shareholder approval When the merger was first announced by ths two companies on November 24, one beverage analyst Jeff erey M. Weingarten with Goldman, Sachs ft Co., said the merger was preemptive move to keep the franchise in the hands of competent aggressive management J "-- -ft " , J ' , "V , , v'-" vV Ji f ; ."- - . - -. r . -i r -I i H ' . x ' . t . - T I ' V - 1 v. AJ Chrysler's Survival Plan Being Reworked By Fed Overseers ? L Frasers 'Don't Want To Kid Workers' HIGHLAND PARK, Mick. (AP) -Federal overseers "essentially" have rejected Chrysler's Corp.'s survival program and are drawing up a new plan, United Auto Workers President Douglas Fraser said Thursday. Speaking to reporters after the second day of negotiations on the troubled automaker's proposed $600 million wage freeze, Fraser said the two sides were bargaining "in a vacuum" and needed guidance from the Chrysler Loan Guarantee Board in Washington, which will decide on the company's request for another $400 million in loan guarantees. "I'm hopeful well have some direction by tomorrow or (Treasury Secretary G. William) Miller will say, 'get down here and let's work on It' "Fraser said. Fraser was asked if the loan board could not go along with Chrysler's plan, which called for a year long price freeze by suppliers and conversion of $572 million in bank loans to preferred stock. "Essentially, yes. I think it's more accurate to say they'i t reworking it," Fraser said. "Evidently Mr. Miller feels it's not a plan that he can sell" to Federal Reserve Chairman Paul Volcker and Comptroller General Eln)er Staats, the other members of the loan board, Fraser said. ' ' Fraser, also a Chrysler director, said he . understood from his talks with Miller that the company, in Its latest projection made at the board's urging, had lowered its projected share of the combined import and domestic car market from 9 percent of an estimated 9.6 million cars this year to 8.5 percent "but dont hold me to this." For the first 11 months of the year that share was 8.65 percent ' No Chrysler spokesman was available to comment on Fraser's remarks. ; Earlier Thursday, the UAW made a proposal to regain in the future at least part of any new sacrifices its members make now to help Chrysler stay afloat Details of' its ' proposal for profit-sharing were not available. Chrysler already has drawn $300 million out of $1.5 billion in loan guarantees it is eligible to receive under a federal rescue program.

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