The Los Angeles Times from Los Angeles, California • 66

CocAtujclcs (Hmce Saturday, March 24. 1984 ttyi'art IV Selected Interest Rates Averages of ddily ratws imrimj Thursday, in percent Merger of Santa Fe and Southern Pacific May Eliminate 1,130 Jobs French Firm to Buy Stake inThriftimart Purchase of Shares by U.S. Unit Will Give It Majority on Board Corporal 1 3 na, AAA Bonds rk Prime Unto 1 1 Municipal 1983 1W4 Sept. Oct. Nov.

Otc. Jan. Scwc: FftdcraffMcrv 8snk. St. lot Auditors Qualify Opinion By BILL SING.

Times Staff Writer The Southern Pacific and Santa Fe railroads expect to cut 1,130 jobs in the first three years of their proposed merger, but will not abandon major lines or cancel service to any community now served, they said in a formal merger application filed Friday with the Interstate Commerce Commission. The lines also predicted annual savings of at least $220 million through more efficient operations and $665 million in multiyear savings through reduced capital expenditures. They said they expect to take $265 million in annual revenues from competitors. The massive ICC filing was the first detailed presentation by the two railroads of how their merger would affect employees, customers and competitors. Mercer Plan It came almost six months after San Francisco-based Southern Pacific parent of Southern Pacific railroad, and Chicago -based Santa Fe Industries parent of the Atchison, Topeka Santa Fe Railway announced a merger plan.

The parent companies proceeded in December to merge their non-railroad businesses including extensive real estate and natural resource holdings forming the Santa Fe Southern Pacific Corp. But the railroads have been kpt separate pending ICC approval, which could take as long as 31 months. Friday's filing was the first step in that process, and is expected to be followed by comments and objections from competitors and unions. The rail merger, if approved, would create the nation's third -largest railroad, with about employees. It will be named the Southern Pacific Santa Fe Railway and will have revenues of at least $4.45 billion, based on the 1983 revenues of the two railroads separately.

$263 Million From Freight Previously, officials of the two railroads had said the merger would reduce costs and increase efficiency, but would not necessarily reduce jobs because of the potential for increased revenues. In the filing, the firms said the combined system will attract about $220 million in gross freight revenues from other railroads and about $45 million from motor carriers, based on 1982 traffic levels. Most of the new revenues will be reclaimed from the Union Pacific railroad, which, since merging with the Missouri Pacific and Western Pacific in late 1982. has taken business from Southern Pacific and Please see RAILROADS, Page 2 Oak Industries Posts $166-Million '83 Loss 10 BO-dayCD's 1983 1984 Nov. Dec.

Feb. Mat Loa Angrlm Timn Domestic Car Sales Up 33.7 in Mid-March GM Says Many Models Are in Short Supply By DEBORAH REIFMAN. Times Staff Writer DETROIT U.S. auto makers, continuing to enjoy a strong sales recovery, said Friday that they sold 33.7 more new cars in mid-March than in the same period a year ago. Total sales in the March 11-20 period were 231.481.

compared to 173.125 in 1983. A gradual recovery in auto sales began in March, 1983. and was marked by expensive incentives paid by the factories to dealers to encourage sales. The mid-March sales this year were equal to an annual rate of 7.6 million, down slightly from the seasonally adjusted annual rate of 7.7 million in the first 10 days of the month and February's rate of 8.3 million units. Shortage of Cars The annual rate is a reflection of the number of cars that would be sold if the mid-March pace continues for a full year.

General Motors which reported a 28.6 increase, said supplies of many cars are short, with customers waiting up to several months for some models. Ford Motor Co. reported a 52 increase over a weak period a year ago, adding that its share of the market has increased by 3 percentage points. Chrysler Corp. said its sales were up 26.1.

American Motors Corp. estimated that mid-March sales were about the same as last year. Dramatic sales increases reported by AMC after the Renault Alliance was introduced in the fall of 1982 appear to have leveled off. American Honda Motor Co. sold 2.408 of its domestically built Accords, but did not report sales for the same period in 1983.

13 12 11 Fslri Fundi 10 Feb. Mir. Sept. Oct. before.

Revenues were $103.6 million, compared to $128.1 million in 1982. The company said it look $59.4 million in fourth-quarter charges, including a $21 -million write-down of Oak's OakAdec Inc. energy management systems installation division and a $20-million write-off for idle decoders used by Oak's ON-TV over-the-air subscription television operation. As it did the year before. Oak's 1983 annual report will also contain an auditors' qualification concerning a class-action lawsuit filed a year ago by a group of disgruntled investors against Oak and eight of its top executives.

The suit claims that management should have disclosed problems with its TC-56 cable converters before its 1982 public offering to sell $100 million in 10.5 convertible subordinated debentures. Sound Condition' More than $15 million worth of the cable converters were eventually returned to Oak because of defects. Despite its losses. Oak said in a prepared statement Friday that its "financial condition remains sound," and that it has $35 million in cash and marketable securities to meet this year's financial require-Please see OAK, Page 2 the program. But while shipments were delayed between March 6 and March 23.

many major Eagle customers delayed orders as they waited to see whether the redesigned computers would be able to run a high percentage of IBM software, the company said. Also contributing to the losses. Eagle said, will be the write-down of assets associated with an earlier generation line of computers that Eagle has discontinued. Eagle said its diversion of resources to create the new program has also delayed the introduction of a new product, the Turbo PC, which it expected to contribute to reve-Please see EAGLE, Page 2 FTC Chief Seeks Changes in Ad Substantiation Rules By PENNY PAGANO. Times Staff Writer By BILL RITTER, Times Staff Writer SAN DIEGO Oak Industries a subscription -television and manufacturing firm.

Friday reported a net loss of $166.1 million for 1983 on a 22 decline in revenues to $426.4 million. The troubled Rancho Bernardo-based company also said that its auditors. Arthur Andersen will qualify their opinion of Oak's 1983 annual report because of doubts about Oak's ability to fully realize its $134-million investment in the subscription -TV industry. Oak said it disagrees with the auditors' position. Communications Segment Last year.

Oak reported net income of $4.1 million, or 25 cents per share, on revenues of $545.7 million. Oak said losses for the year ended Dec. 31 occurred primarily in its communications segment, comprising cable-TV equipment manufacturing and its ON-TV over-the-air subscription-TV operation. The company has been hit hard in the past two years by a drop in the number of ON-TV subscribers as well as problems in manufacturing its cable-TV converter devices. ON-TV subscribers now total only 343.700.

down from a high of more than 600,000 in 1982. For the fourth quarter. Oak reported a loss of $66.5 million, compared to a $13-million loss the year WASHINGTON Federal Trade Commission Chairman James C. Miller III proposed Friday that his agency officially focus on making individual companies substantiate their advertising claims rather than issue industrywide directives. In a speech to advertising executives.

Miller said his proposal for a formal FTC policy is based on staff recommendations of changes in the commission's current ad substantiation program. The commission already has been unofficially challenging the advertising claims of individual firms, buttressed when necessary by compulsory orders. Miller said broad requests to industries for data to support their claims imposes "substantial costs" on the companies without "yielding corresponding benefits for law enforcement." Although the commission would retain its authority to make industrywide substantiation requests under Miller's plan, the chairman said he could not foresee the circumstances under which that "would be an appropriate tool." Some consumer advocates were immediately critical of Miller's new policy statement. "Asking only some companies to substantiate their ads is like saying to consumers that only some of you need to keep tax records." said Bruce Silverglade of the Center for Science in the Public Interest, a nonprofit group in Washington concerned with nutrition and health issues. Miller circulated a draft of his new policy statement to the four other commission members Friday.

It is likely to be adopted because Miller usually is supported by two other members who. like Miller, were appointed by President Reagan. In his speech, the chairman said he does not intend to eliminate the agency's policy of requiring companies to be able to prove the claims about their products even before the ads are made public. "Advertisers must have a reasonable basis for objective claims before they are disseminated." he said. By NANCY RIVERA.

Times Staff Writer The U.S. subsidiary of a large French food-processing and retailing company has agreed to buy a controlling interest in Thriftimarl a regional grocer that is abandoning the conventional supermarket business, the two companies announced Friday. Under the definitive agreement. Casino USA Inc. would buy 58.579 shares, or 87.

of Los Angeles-based Thnftimart's class-B stock from Market Equities, a private holding company controlled by the Laverty family, which founded Thriftimarl in 1930. Although the stock represents only about an 8 stake in the company, class-B shareholders elect five of the company's nine directors. The 665.473 class-A shares outstanding, which elect the remaining four directors, are traded on the American Stock Exchange. The class-A shares closed on the Amex Friday at $59,125, up 25 cents. Runs Cafe Casinos Casino USA is a Santa Monica -based subsidiary of Etablissements Economiques du Casino.

Guichard. Perrachon Cie, a $3-billion company that operates restaurants, supermarkets and convenience stores in France, as well as facilities for producing coffee, meat, candy, jams, bottled water, juice and other foods. Casino USA operates eight Cafe Casino restaurants in Southern California, Washington and Arizona, and four Petit Casino gourmet food stores in Southern California. It also owns a company that imports goods produced by the parent company. Terms of the transaction were not released.

However, the sale is subject to a waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which applies to transactions larger than $15 million, or. in the case of Thriftimart, at least $256 a share. The shares to be sold belong to Thriftimart Chairman Robert E. Laverty, President and Chief Executive Roger M. Laverty Jr.

and director Nancy Laverty Harris. Casino USA said it doesn't have "any present intention" to buy Please see PURCHASE, Page 2 Warner's Deal With Murdoch Angers Merrick By ROBERT E.DALLOS. Times Staff Writer NEW YORK Broadway theatrical producer David Merrick said Friday that he has given Warner Communications Inc. an "ultimatum" to buy back his 300.000 Warner shares for the same $31 per share it has offered for Australian publisher Rupert Murdoch's 6.7 stake in the company or face a lawsuit. Merrick's Manhattan lawyer, Raoul Felder, said in an interview that Merrick, who purchased his Warner holdings several weeks ago for $25.75 per share, or about $7.75 million, believes that Warner's purchase of the Murdoch holdings is "a misuse of corporate funds." Felder said the producer, known for mounting such big productions as the musical "42nd Street," had issued an ultimatum to Warner on Wednesday, telling the entertainment conglomerate that he would file suit after 48 hours if the company did not meet his demand.

$41-Milllon Profit Warner spokesman Geoffrey Holmes said, "We do not respond to ultimatums. We believe Merrick's demands are totally without merit." Merrick had not filed suit as of late Friday, Felder said. Last weekend, Warner ended a 15-week battle with Murdoch by agreeing to buy back from News his private firm, the 5.6 million shares it owned for $180.6 million. Murdoch, whose suggestion that he might take over Warner sparked fierce management objections, made a profit of $4 1 million on the sale. He also received $8 million in legal fees from Warner.

Merrick's lawyer said purchasing shares of a major shareholder simply to thwart a possible takeover is unfair to other stockholders. "David can take a loss," he said, "but you've got retired school teachers buying the stock since the Please see MERRICK, Pace 2 Eagle Computer Projects $7-Million Loss in Quarter By PAUL RICHTER. Times Staff Writer Key Rates quoted by leading California financial institutions. In oercent as of Mar. 23 1984 Auto Sales 10-Day 11-20 i 1110 IW4 1983 iMng GM 13I W3 li Ford S4.7H MOM H.I Chrysler 2.H2 22.37.1 M.I AMC 4.7H 4.7M) I -WV us 1.141 1.104 21.4 Honda 1)1 1 i 2 Ml TOTAL 231,411 173.11S 33.7 Estimate Plant opened Nov.

82 Personal-computer maker Eagle Computer Inc. said Friday that it expects to lose $7 million to $9 million in the current quarter in part because it agreed to modify key software to settle a copyright infringement suit by International Business Machines Corp. Los Gatos-based Eagle, which specializes in computers that use programs written for IBM products, signed an agreement with IBM on Feb. 21 to modify a key program that coordinates the function of the computer's parts. IBM had filed its copyright suit the same day.

The company initially said it expected no decline in orders while it interrupted shipments to rewrite Dow Drops From Times Wire Services NEW YORK -The stock market closed out a losing week with a mixed showing Friday as traders warily studied the interest-rate outlook. Auto issues were a bright spot, aided by strong domestic car sales reports for mid -March. The Dow Jones average of 30 industrials slipped 1.04 to 1,154.84, bringing its loss for the week to 29.52 points. Some other indicators posted small gains for the day. Volume on the New York Stock Exchange slowed to 79.76 million Markets at a Glance 1.04 in Mixed Showing Deposits MMA: Rates paid on money-market deposit accounts with a balance of $2,500 and allowing six fund transfers per month.

CD: Annual yield on certificate of deposit account balance of $2,500 with 2-year term. Loan Rate for a 30-year. $150,000 adjustable mortgage. Terms, appraisal fees and loan origination charges vary. Loan terms at certain institutions may allow for the interest rate to increase substantially during the first year.

2nd: Second trust deed loan of $20,000 fully amortized over 1 5 years, adjustable rate (fixed rate denoted by Auto loan: Interest rate for an $8,000. 48-month, new car loan. Card: Annual percentage rate charged on credit balance. Institutions charge an annual fee of $10 to $18. Pepoeha Lone Bflkf MMA CD Mtg.

2nd Auto Card Bank of America 8.40 11.10 11.25 12.00 14.60 19.80 California First Bank S.40 10.60 NA 13.50 13.60 19.80 Crocker 8.40 10.90 9.8S 12.60 12.60 21.00 First Interstate 8.40 11.06 9.76 13.00 14.00 21.00 Lloyds Bank California 8.76 10.36 13.626 14.376 13.50 19.80 Security Pacific 6.40 11.00 10.50 14.00 14.76 20.40 Sumitomo Bank 8.40 11.00 NA NA 13.00 19.80 Wells Farrjo 8.40 10.50 13.875 14.776 14.76 20.00 American Savings 8.60 10.90 9.85 12.60 12.6 21.00 California Federal 8.60 11.20 10.60 12.00 13.20 18.00 Central Savings 8.60 11.30 10.876 13.00 NA 19.80 Citicorp Savings 8.60 11.34 11.00 13.60 NA NA Coast Savings 6.60 11.614 10.75 NA NA NA Columbia Savings 9.50 11.88 10.676 NA NA 19.80 Downey Savings 8,66 NA 10.60 11.76 13.26 19 80 Far Wett Savings 9,06 10.67 10,25 11,76 14.00 NA Fidelity Federal 8.60 10.92 9.676 11.00 NA 21.00 First Nationwide 6.60 11.02 12.375 13.00 NA 18.00 Gibraltar Savings 8.627 11.20 9.50 NA 13.876 21.00 Great American 6.6621 11.40 10.00 11.00 13.26 20.40 Great Western 6.60 11.26 10.76 12.26 NA 19 80 Home Federal Savings 6.50 11.36 10.60 11.60 13.50 19 60 Home Savings of Amer. 8.50 10.661 10.76 NA NA 18 00 Impenal Savings 6.50 11.60 10.60 11.60 14.26 17.00 Mercury Savings 8.669 11.360 9.60 10.76 13 50 19 80 Sears Savings Bank 8.66 11.74 10.75 14.26 13.76 NA Valley Federal 6.65 11.26 10,76 12.782 12.782 18 00 World Savings 6.86 11.08 10.00 11.60 13.75 19 80 shares from 87.34 million Thursday. The government reported a 0.4 increase Friday morning in the consumer price index for February. That matched expectations on Wall Street, and consequently was believed to have little effect on the market. In the auto group.

General Motors moved up to 65. Ford Motor 7 to 37V and Chrysler to 27V. U.S. auto makers posted an estimated 33.7 sales gain for mid-March over the like period last year. SmithKline Beckman.

which Friday. March 23, 1984 projected higher earnings for the first quarter, rose IH to 51. Walt Disney Productions rose 2 to 6374 in active trading. The stock has been the subject of takeover speculation. On the downside, Boeing fell 2 to 36.

The company said it had revised a forecast downward for worldwide sales of commercial jets for 1985 through 1987. Computervision dropped 2 to 34 V4 on word that auditors had qualified their opinion of Computervision's financial statements for the past three years because of pending litigation involving a former division of the company. American Telephone Telegraph led the active list, down Vs at IS5. The stock fell IV this week as the company indicated that dividends in future quarters might not be as large as the one declared for the first quarter. Declining issues outnumbered advances by about five to four on the Big Board, while the exchange's Please see STOCKS, Pafe 2 -104 --49 "-79 I I I I 1 I 1 DOW 30 NYSE AMEX NASDAQ sJ 0.05 0.249.