The Atlanta Constitution from Atlanta, Georgia on March 18, 1981 · 45
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The Atlanta Constitution from Atlanta, Georgia · 45

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Wednesday, March 18, 1981
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45
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THE ATLANTA CONSTITUTION P. NYSE American 7 OTC 8 Deaths 11 0 M idweelcfleport t tt 1 ii n n iTT-i n fa t -t rra u SECTION ) Wednesday, March 18, 1981 m Ticker Pi; 3 Reports Show Economy Slowini National Coal-Sale Talks Ended Bv U.S. . . . Steely Sdhio U.S. Steel Corp. and Standard Oil Co. Tuesday canceled their negotiations on a proposed $750 million sale of three U.S. Steel coal mines and reserves. The announcement came in a one-paragraph news release. No reason for the termination was given. ' The companies announced last December that they had reached an agreement in principle on the sale to Sohio, a Cleveland-based oil company, of two mines In Pennsylvania and one in West Virginia. U.S. Steel described the reserves as "surplus to U.S. Steel's long-term needs." The proposed sale involved more than 800 million tons of reserves, about 27 percent .of VS. Steel's total coal reserves. ' Last December VS. Steel Chairman David Roderick said more than 90 percent of the proceeds from the sale would be used to increase the company's income before taxes in 1981. The cash expansion and acquisitions, he said. Roderick said U.S. Steel was not "forced" into the deal, saying the corpo-ration's cash position was "quite strong" without the sale. Sohio, which is 53 percent-owned by The British Petroleum Co. Ltd., recently made a $1.77 billion bid to acquire Ken- necott Corp., the nation's leading copper producer. Uranium Settlement Westinghouse Electric Corp. announced Tuesday that it has reached an out-of-court settlement with 12 of the remaining defendants in its uranium antitrust suit The suit, filed in U.S. District Court in Chicago, initially charged 29 foreign and domestic uranium producers with forming a cartel to fix prices, allocate supplies and boycott certain - uranium purchasers, including Westing-. house. The action alleged that price-fixing by the producers increased, uranium prices by more than 500 percent The case against six defendants, one foreign ' and five domestic, remains in litigation, Westinghouse said. It is scheduled, to go to trial in September 1981. Under the settlement announced Tuesday, Westinghouse will receive $39 million cash and will acquire 9 million pounds of uranium, used to fuel nuclear reactors, during the next five years, the firm said. More Airlines Cut Fares Two major airlines announced Tuesday they were slashing some fares up to 1 50 percent following cuts by Trans World Airlines, in an effort to remain competitive during sluggish spring travel periods. While United Airlines and American Airlines were unveiling their discounts, other carriers said they were still studying TWA's move Monday to reduce its roundtrip fares to $298 in 300 markets for a five-week period beginning April 20. In Chicago, United spokesman Chuck Novak said a series of cuts would match either TWA or American on routes where the airlines compete. S&L-Bank Ties Considered The Federal Reserve Board has reopened the issue of whether bank holding companies should be allowed to acquire savings institutions, a type of acquisition the Fed has generally opposed in the past. The board voted to dismiss National Detroit Corp.'s request to take over Landmark Savings and Loan Association of Saginaw, Mich. But in the process, board members agreed to begin a study requested by Congress on the general issue. The Detroit case was dismissed "without prejudice" and could later be decided in favor of the holding company. The ' crucial question is whether the activities of savings institutions are "a proper incident" to the other activities of bank holding companies. In the past the board has generally decided they are not v From Prtu OiSMtchn WASHINGTON - The government issued three separate reports Tuesday on industrial production, housing starts and personal income that revealed new signs of developing weakness in the U.S. economy. ' . Production by VS. industry fell in February for the first time in seven months, Americans recorded their smallest personal income gain since last summer, and housing starts plunged in February, the government said. Economists Inside and outside government said the new figures indicate the national economy will continue to Blow in coming months, but they stopped short of predicting a new recession. "These are certainly unencouraging numbers," said David Ernst a vice president of Evans Economics Inc., a private Washington firm. But he added that a decline in interest rates already under way "will avert any return to recession." v National industrial production de- dined 0.5 percent in February after showing smaller and smaller gains in recent months, including 0.4 percent in January, the Federal Reserve Board reported. And the Commerce Department reported that February's 0.7 percent personal income gain, down from 1 percent the previous month, was outstripped by rising personal spending for the second month in a row. Meanwhile, the Commerce Department also reported that housing starts AT&T Notes Priced American Telephone & Telegraph Co. said Tuesday it had negotiated the sale of $600 million of 10-year notes to underwriters who plan to offer the new issue to the public at par to yield 13V percent 'at maturity. AT&T said it intends to use the proceeds from the sale of the notes, which are due March 15, 1991, "for advances to subsidiary and associated companies for equity investment in such companies, and for general corporate purposes." The last time AT&T went to the debt market was on May 29, 1980, when it sold $600 million of 10-year notes which then carried a yield of 10 percent N.Y. Bonds 'Speculative' Moody's Investors Service, one of two major bond rating agencies, Tuesday gave a less-than-investment-grade rating of "B" to New York City's general obligation bonds. The "speculative" rating will restrict the number of investors who can participate in this month's $75 million bond sale and could add to the interest costs the city will have to pay over the life of the bonds. International Dollar Continues Slump , The dollar continued to slump Tuesday amid lower interest rates in the United States. Gold climbed above $500 in New York for the first time since late February. The moves came as a prime lending rate of 17.5 percent spread . throughout the U.S. banking industry and as government reports indicated the economy is slowing. Gold for delivery this month closed at $507 an ounce at the Commodity Exchange in New York, up $13.90 on the day. The dollar was lower against every major currency, including the Japanese yen, which advanced despite the Japanese government's decision to cut the rate on loans to commercial banks by the Japanese central bank to 6.25 percent from 7.25 percent In Tokyo, the dollar closed at 207.25 yen, down from Monday's price of 208.40, and in later New York trading the dollar finished at 206.95 yen, down from 208.23 the prior day. The discount-rate reduction was no surprise, according to currency dealers in Tokyo, Coke Officials' Trip A contingent of top Coca-Cola Co. officials, including Chairman Roberto Goi-zueta, will leave April 10 for the formal opening of the firm's Chinese bottling plant in Peking April 15, it was announced this, week. Company officials say the first Coke plant in the People's Republic of China will be capable of producing 2 million cases annually of the . soft drink in 6.5 ounce bottles. . . Heller Calls Reagan TTh rro gram Economist: Plan Will Not Gut Inflation By John Maynard CmNtulkM Stiff Writ President Reagan has succumbed, to the "sirens of the supply-siders" if he believes his proposed economic plan will simultaneously invigorate the economy and tame inflation, economist Walter W. Heller asserted Tuesday in Atlanta. Heller, in a speech to the World Educational Congress for Laundering and Drycleaning at the World Congress Centercalled the president's double-barreled economic package "internally contradictory." "Reagan's expansionary fiscal policy is on a collision course with a contractionary monetary policy," warned the University of Minnesota professor and former member of the Council of Economic Advisors under the Kennedy and Johnson administrations. Reagan's insistence that tax cuts will stimulate savings, which would then be invested in productive enterprises, ; is ; "economic ; ;' nonsense," Heller said. "It. has no fundamental analysis, theory or body of data to support it" the economist said of Reagan's proposed plan. "The part of it that assumes that big across-the-board tax cuts are going to make us work harder and save more is just not borne out by history. "It's a bunch of hype." Nonsense "BP V Si H J iiifl -TA II ... .. m s.i i tMimM. y-&pie'4BB&& -r. -'"Strtfti SVMJftft&wji The Show Pit Laundering ... ' r A . . . 5 Dmieamffli L-siirf3Riis: ksswsiSii&A Staff Photo Cheryl Brv Heller: Two Parts Of Program On Collision Course Heller suspects that America's "installment-debt-oriented" consumers will view the proposed $30 million tax cuts over the next three years as "money in the bank." Those tax cuts, coupled with the proposed 10-5-3 depreciation sched ule, which favors "bowling alleys and ' shopping centers," will unleash "enormous streams of economic energy," Heller said. . "What's worse, the across-the-board tax cuts will throw away opportunities to use income-tax , See HELLER, Page 3-D plunged 25 percent in. February, confirming the dire reports industry spokesmen have been making for some time. . ' The Commerce Department also reported a 6.9 percent drop in building permits for future construction, a discouraging indication that further housing declines can be expected. The Commerce Deparment's figures show private single and multi-family housing units were started in February See ECONOMY, Page 4-D Marriott May Run Fulton Federal's Schweers Sees Gradual Mortgage-Rate Decline Home mortgage rates are still high at approximately 15 percent but they could start moving down before too long in the face of the accelerating decline in short-term interest rates. But Edward H. Schweers, the newly elected president and chief operating officer of Fulton Federal Savings and Loan Association, doesn't think the mortgage rates will move down very fast or very far.: "I believe the mortgage rates might be down to 13 percent by the end of the year," he said in an interview. "We're all dancing to the tune of the money markets, but I feel a lot better about the interest-rate picture now than I did last December.", , . . .' ,; Schweers, who was elected president of Fulton Federal on Feb. 23, noted that his institution is paying less interest now on the popular six-month savings certificates than the. 14.72 percent it was paying in January. Jill II WWIMUKUJIV 1 . V1 Nick I U-' Poulos i ' . Business Editor V j . : . , . . . Fulton Federal is now quoting an interest rate of 12.34 percent it will be paying on its six-month certificates effective" Thursday. The certificate rate is tied to treasury bill rates. , Beyond 198U Schweers expects mortgage rates to remain in fairly high double digits. Over the subsequent five-year v .. . :u V. '," See POULOS, Page 4-D Round Of Selling Knocks Market Off 1,000-Lev el Perch NEW YORK (AP) - The Dow Jones industrial average dropped off its perch above the 1,000 level Tuesday as an afternoon round of selling hit the stock market The widely recognized average of 30 blue chips, which had climbed 17.02 points on Monday, retreated 10.26 to 992.53 in heavy trading. . Other indicators posted much smaller percentage losses, however. The latest reduction in the prime lend-. ing rate, from 18 to 17 percent spread rapidly through the banking industry during the day. But despite growing evidence of a downward trend in Interest rates, analysts said, the market still seemed to be confronted with "formula" selling at the Dow 1,000 level, where it has retreated several times in the past few years. Early in Tuesday's session, the Dow hovered between 1,000 and 1,004, but at mid-day it began retreating. Once that was apparent the selling Intensified until the final moments of the session, when the market steadied again. Gainers actually held a slight edge on .losers in the over-all tally on the NYSE, but the exchange's composite common-stock index fell 0.38 to 76.81. Standard & Poor's Index of 400 industrials lost 0.98 to 151.65, and S&P's 500-stock composite index was down 0.76 at 133.92. At the American Stock Exchange, the market value index gave up 1.80 to 345.66. The NASDAQ composite index for the over-the-counter market closed at 203.19, down 0.25. Big Board volume totaled 65,920,000 shares, up from the 49,940,000 traded Monday. The stock market pattern contrasted sharply with that of the bond market where prices rallied and yields fell on evidence of a slowing economy. The government reported that industrial production declined in February for the first time in seven months, and that housing ' starts fell 24.6 percent Point-plus losers among the blue chips in the Dow average Included Eastman Kodak, off 1 at 80 as of the 4 p.m. close in New York; Du Pont off 1 at 50 ; General Electric, down 1 at 67, and United Technologies, off 1 at ' 54.. U.S. Steel fell 1 while Standard Oil of Ohio rose to 52. Plans for Sohio to buy some coal properties from U.S. Steel were dropped after a dispute arose over the price. Sony led the active list off three-fourths at 17 on turnover of more than 1.1 million shares. The company reported flat earnings per American depositary share for the quarter ended Jan. 31.. . Portman New Hotel By Sallye Salter ' Comtlfutlon Stiff Writer The Marriott Corp. is likely to become . the operator of the new major convention hotel that' Atlanta developer John Portman plans to add to Peachtree Center. Spokesman for both the Washington, D.C-based lodging chain and Portman Properties confirmed Tuesday that negotiations are under way. Marriott also is expected to become the operator of the New York hotel planned by Portman. "We are discussing both projects with Marriott in terms of operation," said Glenn Isaacson, director of development for Portman Properties. "With respect to the New York hotel, that arrangement is quite firm. It is somewhat less firm with respect to the project here." ;! Among the issues to be resolved is the number of rooms in the Atlanta hotel. Marriott has been seeking a developer with a prime site for a 2,000-room downtown hotel. . f However, the hotel design unveiled by Portman last summer was for a 1,500-, room combination convention and luxury lodging facility. " -t "We are in the process of exploring the feasibility of enlarging the hotel to bring it up to 1,800 rooms," Isaacsoh said of the project's current status. I The enlargement would make the planned hotel the city's largest hotel, pushing it ahead of the Hyatt Regency, also located in Peachtree Center, whicji will have 1,400 rooms when its expansion, is completed next fall. Isaacson said that financing arrange- -mehts for Portman's planned hotel, first ' announced in 1978, will probably be announced soon. . Marriott whose existing downtovfa hotel was the city's first major convention facility, has negotiated unsuccessfully during the past year wjth develof- ers of two other downtown hotel sites. Last winter the lodging . chain attempted to work out a deal with W. B. ' Johnson Properties Inc. for a site thit firm was - assembling on downtown Peachtree Street However, Johnson announced plans for a 500-room luxurj hotel there after it failed to obtain a tract large enough for a 2,000-room facility. ; Last summer Marriott ended negotiations with Atlanta developer Charles Ackerman for operation of a 1,700-room hotel he planned for the block bounded by Ivy, Forrest Piedmont and Baker streets. That project has been shelved for the present Ackerman said recently, . Marriott President J.W. Marriott Jr. said in an interview here last month that he likes the location for Portman's hotel, and was interested in discussing the operation if Portman's reported but never announced agreement with Trust House Forte Hotels Inc. of London failed. . ' Isaacson said that earlier discussions had been held with several prospective operators of both the Atlanta and Times Square hotels. I ' In the current transaction, whiqh would be Marriott's first with -a Portman-built lodging facility, he said: "The key is that Marriott has the intention and has, in fact, already embarked on a program of adding to its chain a number of large convention hotels in key U.S. cities. "Atlanta is clearly one of the prime convention cities in the U.S.," he said, "and given the capability of Marriott in the sales and reservations areas, it , would make a very desirable operator ' . for that type property." j Inside Eastern To Begin Daily, Non- Stop Flights To Panama In June Braniff Yells 'FouP As Delta Adds Service To Dallas Hub Page 3-D Panamanian Envoy: Climate Favors Business Investments Page 4-D . 4 By Nick Poulos ' Comtltutlon Binlntit Edllof The Panamanian government has authorized Eastern Airlines to inaugurate daily nonstop service between Atlanta and Panama City, it was disclosed Tuesday. "Eastern is pleased to once again lead the way in bringing Atlanta another international destination," said Morton Ehrlich, senior vice president of Eastern in charge of planning. "Panama is the crossroads of the Americas, a major banking and maritime center, and there has long existed a need for a convenient transportation link with the Southern . economic center of Atlanti." Eastern announced that effective June 1, it will schedule daily flights from Atlanta, leaving at 10:45 a.m. and arriving at Panama City at 2:42 p.m. The flight 981, will originate in New York City. The return flight, 982, will leave Panama City in midafternoon and arrive in Atlanta at 8:32 p.m. Eastern said it will employ a 146-passenger Boeing 727-200 in the service. The Panama service is a major step in Eastern's ambitions to expand into Central and South America, with Atlanta serving as a major gateway. Earlier this month, Eastern announced it had applied for Civil lAeronautics Board au thority to inaugurate service from Atlanta to Brazil a key goal in the carrier's expansion plans. At the time of the filing, Ehrlich noted that Eastern has almost 330 daily flights in Atlanta each day, and that it would be a "logical selection for an Atlanta-Brazil link." Eastern also disclosed that pending approval by the Mexican government, it plans to inaugurate on June 1 daily service from Atlanta to western Mexico. The carrier plans non-stop daily service to Guadalajara, Mexico's second largest city. , From Guadalajara, the carrier plans to provide alternate-da service to Puerto Vallarta and MazaUan. . J' - - - Last Dec. 8, Eastern started daily service . between Atlanta and the Yucatan. A spokesman for Eastern said the service has proved "very successful" in terms of passenger traffic. -:- ".-,, . Frank Bornian, Eastern's chairman and president recently disclosed that the carrier plans eventually to order about 175 additional , new planes at a cost of roughly $7 billion to nearly S9 billion. Borrnan said the new planes will be used to replace older, less fuel-efficient planes in . the Eastern fleet and to serve new routes in the future, particularly in Central and South S America, f, j ...

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