The Atlanta Constitution from Atlanta, Georgia • 21

THE ATLANTA CONSTITUTION Burnt SECTION Wednesday, July 27, 1983 NASDAQ Down 0.46 Briefs 2 Prime rate 10.5 NYSE 4 Up 10.82 26-week T-bills 9.31 NASDAQ 5 91.28 million Gold in New York 426.50 Deaths 10 Daily indicators Dow average NYSE volume Donald GM's earnings top $1 billion Ratajczak Th Aisoculed Press A giant is born I If Ff KJf If 0mf0mi fff' -JM if 1 1 nfffj i MM DETROIT General Motors Corp. said Tuesday it earned $1.04 billion in the second three months of this year more money than it made in all of 1982. The report was the automaker's best showing in four years and the fifth-best quarter in its 75-year history. The 85.7 percent gain over the $560 million earned in the same period a year ago resulted from the strengthened U.S. economy, good car sales especially of large, luxury models cost-cutting and help from GM's insurance and finance subsidiary, industry analysts said.

Pan Am has first quarterly profit since 1980. Page 10-C. U.S. Steel loses $112 million in quarter. Page 10-C.

Economy shows little response on supply-side Amid all the cheer concerning the rapid 8.7 percent annual rate of growth in the gross national product during the second quarter, many economists have overlooked the surprising absence of a supply-side response. To be sure, the administration's economic policies no longer adhere to strict supply-side principles. Last year, President Reagan fought for a tax increase that will raise revenues by nearly $100 billion over three years. The administration also has supported the more pragmatic monetary objectives pursued by the Federal Reserve Board in recent months. These new policies coincided with a significant reduction in interest rates, which encouraged a rebound in housing and the beginning of the present recovery.

I recently applauded the president for showing the wisdom to change economic policy when results were not forthcoming. Therefore, criticism of supply-side economics no longer means criticism of the president's economic program. Other explanations possible Two supply-side claims have been met: Productivity has accelerated while wage demands have moderated. But (here may be other explanations. Unusually high real rates of interest may have forced entrepreneurs to make better use of existing capital, while high unemployment may have moderated wage demands.

In addition, high interest rates kept the dollar strong, making imported goods relatively inexpensive and exerting downward pressure on domestic prices. Supply-siders maintain that the policies initially pursued by the Reagan administration would lead to substantial increases in investment and savings. Since the modified Kemp-Roth tax reductions began in October 1981, consumption spending has increased its share of economic activity by more than 2 percentage points. Only in the aftermath of World War II rationing did consumption account for a larger share of GNP than in the second quarter of 1983. Household savings drop More significantly, household savings plummeted to 3.3 percent of disposable income in June, the lowest savings rate for a month since records were first kept in 1959.

The quarterly savings rate for households was the lowest since the second quarter of 1950, when the Korean War sparked fear of renewed STEVE DEALStaff Top executives Wallace It. Bunn (left) and John Clendcnin join in unveiling the new holding company's name New phone company nation's largest Bunn said the formation of the directory subsidiary will offer operational economies by combining staffs (of the two operating companies) and eliminating duplication of functions. It also recognizes the competitive nature of the advertising sales and publishing business." As for a customer equipment business, he said specific plans could be influenced by the Federal Communications Commission, which is still considering whether the new holding companies will have to create separate subsidiaries to sell equipment such as telephone sets and office data networks. According to an FCC agreement with operating companies may only sell equipment from It also exceeded the $962.7 million the No. 1 U.S.

carmaker made in all of 1982 and was nearly three times the $333 million profit the year before. GM lost $763 million in 1980. Last week, Chrysler Corp. disclosed it made $310.3 million in the second three months of this year its best quarterly profit ever. American Motors Corp.

reported Monday a $78.9 million loss for the quarter. Ford Motor Co. is expected to release earnings Wednesday. Volkswagen of America Inc. does not report earnings separately from its West German parent company.

GM's second-quarter earnings, amounting to $3.32 per common share compared with $1.82 a share a year earlier, are the best since the company earned $1.19 billion in the second quarter of 1979, before the U.S. sales slump began. GM's best quarterly earnings ever were $1.26 billion in the first three months of 1979. So far this year, GM has earnings of $1.7 billion, compared with $688.3 million by this time a year ago. Sales in the quarter totaled $19.4 billion, up 13.2 percent from $17.14 billion a year ago, the company said.

Harvey Heinbach, auto industry analyst at Merrill Lynch, Pierce, Fenner Smith in New York, said GM took advantage of cost-cutting over the past three years, lowering the firm's break-even point. Heinbach noted that the automaker had to pay $860.8 million in income taxes in the quarter, which he called "a pretty hefty tax rate that actually hurt the comparison with a year ago," when GM paid only $236.3 million in income taxes. GM Chairman Roger B. Smith said the "profitability should be particularly good news for virtually all General Motors hourly and classified salaried employees in the U.S. who will ultimately share in the company's success through GM's new profit sharing plan." By Robert Snowdon Jones Staff Writer BellSouth Corp.

is the name ofUhe Atlanta-based company that will own Southern Bell and South Central Bell when those telephone companies are spun off from American Telephone and Telegraph Co. Jan. 1. Ceremonies were held Tuesday to reveal the name and announce that the holding company, which will be the nation's largest telephone company, plans to enter the highly competitive telephone equipment market next year as well as form a separate subsidiary to publish its Yellow Pages directories. Few of the region's 13 million customers will ever come in contact with BellSouth directly, since Southern Bell and South Central Bell will remain the names of the operating subsidiaries that will continue to supply basic phone service in most of the nine-state region.

Wallace Bunn, the new company's chief executive officer-designate and chairman of South Central Bell, said the name BellSouth was one of the first considered months ago for the new holding company. He said uncertainties over the authorized use of the Bell name delayed the announcement until Tuesday. Some of the other telephone holding A separate subsidiary will be formed to publish the Yellow Pages directories companies, such as West Inc. and Nynex have spurned the name "Bell." And the Atlanta company had considered such generic names as SpanCom, ComNet, SunNet, SunLink and SeCom. U.S.

District Judge Harold Greene ruled July 8 in Washington that the holding companies and their operating subsidiaries will have exclusive rights to use the Bell name, citing its value in the marketplace. Of the subsidiaries, only Bell Laboratories will be authorized to use the word Bell. Bunn said the use of the Bell name makes sense in light of the judge's ruling. He said the name will be of crucial importance when BellSouth must go to investors to raise capital. "The Bell legacy is respected by the financial community" he said.

"Wall Street has linked the name to financial stability and integrity." Although it could hold one as early as next May, Bunn said, the first shareholders' meeting probably won't be until May 1985 in a city within the region. inventory until Jan. 1. After that date, according to the agreement covering the breakup of the new holding companies can sell telephone equipment, but are prohibited from manufacturing it. BellSouth is not sure what products it will sell, or from which vendor they might come.

"Contrary to popular opinion, the selling by Bell companies of products other than Western Electric isn't new," said John Clendenin, BellSouth chief operating officer-designate and chairman of Southern Bell. See BELLSOUTH, Page 3-C rationing and consumer goods were hoarded. Included in the estimates of house hold savings are contributions made by employers to pension funds and the earnings on those funds. During the sec ond quarter almost $100 billion in house- Genuine Parts shows 4 rise in income for second quarter hold savings represented changes in pea Chicago firm to buy WANX-Channel 46 in $32 million deal sion holdings. Excluding these savings, wmcn are not at the discretion of indi if vidual households, savings in June actually fell to a record $25 billion defi cit.

Admittedly, the supply-side experi Georgia Earnings Roundup ment has been modified by policy changes, and it may be too soon to judge its full impact. Nevertheless, investment remains a woefully small and declining share of economic activity, while house' From Stiff Reports Genuine Parts Co. reported Tuesday that its second quarter net income rose 4 percent to $25.4 million, or 70 cents per share, from $24.5 million, or 68 cents per share, in the same period a year ago. Revenues for the Atlanta-based supplier of automotive, industrial and office parts increased 6 percent to $526 million in the quarter from $493.9 million a year earlier. "The automotive replacement parts market continues to expand, with increases in both the number of vehicles on the road and total miles driven," said Wilton Loo-ney, chairman.

"Our automotive parts sales advanced 7 percent during the second quarter of this year." hold savings are almost 3 percentage points below postwar averages. How much more evidence is needed For the first half, Genuine Parts earned $46.2 million, or $1.28 per share, on revenues of $1 billion, compared with $46.3 million, or $1.28 per share, on revenues of $996.3 million in the first half of 1982. Rollins Inc. Rollins a diversified Atlanta-based services company, Tuesday reported See EARNINGS, Page 3-C to declare the supply-side experiment a economist uonaia liatajczak is director of the Economic Forecasting PARTS MARKET GROWING Wilton Looney rrojeci at ueorgia state university. By Beau Cults SleH Writer Tribune Broadcasting Co.

of Chicago announced Tuesday that it has reached an agreement to pay $32 million in cash for WANX, an independent Atlanta television station operating on Channel 46. "We're very pleased to get the station," said Jim Ellis, director for creative services of Tribune Broadcasting. WANX has approximately a 5 percent share of the viewing audience in the Atlanta market. Continental Broadcasting Network a subsidiary of Christian Broadcasting Network Inc. of Virginia Beach, currently owns the station.

Christian Broadcasting President Pat Robertson said the sale is to raise money for other Christian Broadcasting programming, to finance overseas operations and to liquidate debt. Tribune Broadcasting, which operates television stations in Chicago, New York and Denver and recently acquired a station in New Orleans, is owned by the Tribune Co. The company's assets include The Chicago Tribune and the Chicago Cubs. "Atlanta is a real important market for us," said Ellis, who added that no decisions have been made on changing WANX's programming. In the past, the station was noted for its religious programming, but now it has a general mix that includes children's shows, situation comedies and movies.

Herman Ramsey, vice president and general manager of WANX, said. "I don't think there'll be significant changes in programming. There'll be refinements and fine tuning." The sale is pending approval by the boards of directors of the Tribune Co. and Christian Broadcasting and by the Federal Communicatiorit Commis' Earnings reports help boost stock market to near record close at 170.35. The NYSE's composite index gained .51 to 98.58.

At the American Stock Exchange, the market value index was up 1.63 to a record-high 249.03. But the NASDAQ composite index for the over-the-counter market closed at 320.38, down .46. Pan American World Airways topped the active list as of the 4 p.m. close of the NYSE, up to 8 in trading of more than 2.5 million shares. Early in the day, Pan Am reported its first quarterly profit from operations since the third quarter of 1980.

Traders continued to spurn companies that have failed to cash in on the recovery. Paradyne dropped 2V at 19V after reporting a second-quarter loss and saying its earlier estimate of annual earnings of $1.10 a share to $1.20 a share is unattainable. The Associated Press NEW YORK A rally among blue-chip issues, fueled by a batch of encouraging earnings reports from General Motors and other big companies, propelled the Dow Jones industrials to within striking distance of an all-time high in active trading Tuesday. The stock market's best-known indicator, down more than two points in the early going, finished the day up 10.82 points at 1,243.69, bringing its gains over the past six sessions to 53.79 points. It was the fourth-highest close ever for the average of 30 key stocks, which reached a record 1.248.30 June 16.

"The economy is coming up very strongly, taking the market with it," said Eldon Grimm, a senior vice presi-dtf it at Birr, Wilson Co. Inc. Among blue-chip issues reaching 12-month highs during the session, General Motors was up 1 at 76 Sears climbed 2V to 44 and Texaco gained to 36, all on the heels of reporting higher profit. In all, seven stocks in the Dow Jones industrials reached new highs. The others were International Business Machines, which finished the day up V4 at 126V; Allied, up at 53; Alcoa, up 1V at 41; and Woolworth, up v2 at 38.

More than five stocks rose in price for every three that fell on the New York Stock Exchange. Big Board volume climbed to 91.28 million shares from 73.68 million Monday. Standard Poor's index of 400 industrials rose 1.03 to 192.15, and 500-stock composite index was up .82.