The Los Angeles Times from Los Angeles, California • 44

USINE Cos Angeles (Times San Diego County Saturday, November 8, 1986 CCyi'art IV Lucky Stores Moves to Sell 2 Units, Spin Off a Third, Buy Back 28 of Its Shares Union Blames GM Layoffs on Rising Imports MM I I l( I I -I I I United Press International An engineer plots a highly magnified schematic of a computer chip. State Still First in Electronics Employment Despite Losses By MARTHA GROVES, Times Staff Writer Lucky Stores, continuing to roll out moves to thwart investor Asher B. Edel-man, announced plans on Friday to sell two specialty store units, spin off a third to shareholders and spend $575 million to buy back 28 of its stock. With these steps, Lucky would complete a rapid-fire return to its core business groceries after years of diversification into membership discount stores, fabric shops, auto parts and general merchandise. The restructuring has come in response to Edelman's dogged pursuit since late September.

Stockholders will be asked at a special meeting Dec. 22 to clear the way for the buyback and other changes by approving the Dublin, company's reincorporation in Delaware one of the steps that Lucky officials say is essential to the reorganization. Lucky -Chairman John M. Lillie said in a telephone interview that the $40-a-share tender offer for 14.38 million shares is subject to completion of the sales of the specialty units, the previously announced sale of Gemco and the reincorporation in Delaware, which provides more favorable treatment for such corporate changes. "If any one or all of those things failed to materialize, we'd have to re-evaluate the magnitude of the tender," he said.

He added that the company plans to file by next Friday to begin the tender offer, with the transaction to be completed by year-end. Reached in New York, Edelman said he is reviewing the restructuring plan and expects to have a response next week. The investor last week withdrew a $37-a-share bid for Lucky but said he might make another pass at the company if the stock price drops to an attractive level. Wall Street sources said Edelman, who apparently boosted his stake in Lucky with a purchase Wednesday on the open market, was continuing to buy shares on Friday. Any purchases would boost his stake to more than the 5 that triggers a filing with the Securities and Exchange Commission.

Such a filing must be made within 10 days of when the investor's stake reaches that level. The unit to be spun off to shareholders next year is the profitable Hancock Textile unit, Lucky's largest specialty retailing operation. Two other units, Checker Auto Ranked by total industry 1. California employment 586,000 NEW YORK (-California easily remains No. 1 in electronics employment, even though it lost more electronics jobs than any other state in last year's business slowdown, according to the American Electronics Assn.

California's total of 586,000 electronics jobs in 1985 was more than twice that of runner-up New York, which had 222,000, the Palo Alto-based industry group said in a study based on the latest data from the U.S. Bureau of Labor Statistics. National employment in electronics fell by 50,000 to 2.54 million last year, the electronics group said. California lost 20,000 jobs. Michigan was the biggest percentage gainer, up 15.6 to 37,000.

Maryland climbed 9.3 to 59,000. 2. New York 222,000 3. Massachusetts 207,000 4. Texas 152,000 5.

New Jersey 107,000 6. Florida 104,000 7. Illinois 101,000 8. Pennsylvania 87,000 9. Minnesota 78,000 10.

Arizona, 61,000 North Carolina (tie) UAW Says Job Talks Will Not Be Impeded, Calls for Tougher Trade Legislation By JAMES RISEN, Times Staff Writer DETROIT cnoral Motors' long list of plant closings announced Thursday underscores the need for tough new trade legislation to stem the growing flood of auto imports from Japan and the Third World, the president of the United Auto Workers said Friday. But union President Owen Bieber and other top UAW officials at a press conference downplayed the impact that the closings might have on next year's contract talks between the union and the world's largest auto maker. In fact, Bieber declined Friday to rebuke GM for its announcement that it will shutter 11 plants and eliminate 29,000 jobs throughout the Midwest between 1987 and 1989. Instead, he focused on the need for the new Democrat-controlled Congress to take quick action to force Japan and other nations to cut back their imports to the United States. we don't change the direction in which we're going with more and more imports and transplant cars built here by the Japanese, we will be back here for more and more and more closings and layoffs, because I see the trend for excess capacity in the domestic auto industry," Bieber said.

GM Chairman Roger B. Smith insisted Thursday that the company's plant closings were not a result of GM's sluggish sales or loss of market share but said it came as part of GM's drive to reduce costs and consolidate its manufacturing capacity in newer, more modern facilities. But the union contends that the corporation was forced to cut back mainly because of the growing pressure from imports, which has made it difficult for GM to justify retaining so much car-making capacity. 'Crucial Middle of the Market' "Yes, GM is regrouping and preparing to fight it out for market share in the crucial middle of the market," Bieber said. "But where is the pressure in that market coming from? Sure, there's Ford and Chrysler.

But primarily it's coming from the Japanese makers, which have moved upscale and targeted that lucrative middle for expanded sales of both imports and transplant products." UAW officials predicted that the GM closings, coming so soon after the recapturing of the Senate by the trade -conscious Democratic Party, will increase the pressure on the Japanese to extend auto import quotas for another year. Bieber said the UAW will push to try to force the Japanese to actually reduce the level of their imports when the current quota year ends March 31. "We need to change the whole context in which this industry functions from a context of unnecessary and unsustainable decline to one of fair and reasonable competition on American soil with American workers doing the full range of jobs," Bieber said. But UAW officials said the union isn't interested in trying to use the job losses announced Thursday to bash GM as the two sides position themselves for next year's round of contract talks. When asked how the closings will affect the union's relations with GM, Bieber said: "We're not going to cancel the contract." He added that the UAW is hoping instead that it can work with GM to push for stronger trade policies.

"The answer is not for everybody in the plants to go and tell the foreman, 'You are a no-good Bieber said. "We want GM to come to the party to turn this thing around" on trade. "I don't want to have to come back here and talk about another 29,000 and another 29,000." I States ranked by biggest percentage gains in high-tech employment: State Dec '84 Dec '85 Change Michigan 32,000 37,000 15.6 Maryland 54,000 59,000 9.3 North Carolina 58,000 61,000 5.2 Virginia 53,000 55,000 3.8 Washington 27,000 28,000 3.7 States ranked by biggest percentage losses in high-tech employment: Illinois 113,000 101,000 Minnesota 86,000 78,000 Arizona 65,000 61,000 Massachusetts 219,000 207,000 Ohio 59,000 56,000 Shareholder Sues Bof A in Bid to Force Merger Negotiations Source: American Electronics Assn. Asher B. Edelman Associated Prcss Parts and Yellow Front general merchandise stores, are slated for sale.

"We're actively marketing them, and our goal is to have the sales completed by mid-December," Lillie said. John Kosecoff, a supermarket analyst with First Manhattan in New York, said the reaction on Wall Street to Lucky's maneuvers was "generally positive." "It appears that management has tried to strike a very good balance in their priorities and has given shareholders their best effort," he said. Kosecoff said he felt "comfortable" with estimates that the restructuring would have a value of between $37 and $38.50 a share. Lucky is clearly caught in a balancing act of trying to achieve good value for. shareholders while keeping the company competitive, observers noted.

"I think there was real concern by Lucky management that the Safeway Stores transaction was done at such a high price as to constrain that company's ability to be competitive because cash flow would have to be allocated to service debt," analyst Kosecoff said. "They have a role to serve as managers of an ongoing entity and to provide shareholders with the highest Please see LUCKY, Page 2 Angeles, has since raised its offer to $3.4 billion. BankAmerica's board last Monday all but rejected the unwelcome First Interstate proposal, saying that it saw no reason to sell the bank at this point. Board members asked for time to complete a detailed study of the bank's prospects and devise a recovery plan. Filed by New York Housewife The lawsuit was filed by Barbara Zaro-witz, a New York City housewife who owns 200 BankAmerica shares, on behalf of all common stock holders.

She filed another suit against BankAmerica in July, 1985, shortly after the bank reported $338 million in losses. In that suit, also a class action, she seeks repayment for investors' losses caused by the bank's plummeting stock value. The stock was selling for as much as $24 a share in 1984 and is now Please see of Page 2 the FBI last summer. The FBI opened its investigation in August, focusing on two adjacent pieces of property in Santee that were bought by Silberrad Development, which is owned by Brown. The people who originally purchased the parcels had secured loans from the Bank of San Diego.

Auditors from the Federal Deposit Insurance Corp. referred the case to the FBI after a routine examination of BSD's books last year. There were two key issues in the investigation, according to sources: whether the original loans were "straw man" transactions, with Brown as the intended beneficiary of the loans, and whether Brown should have disclosed to BSD that his development company had purchased the land. Accord Expected Calling for Icahn to Put Off New Purchases of USX Stock By JOHN M. BRODER, Times Staff Writer A BankAmerica shareholder has filed a class -action suit against the company's board of directors in an attempt to force serious "merger negotiations with First Interstate Bancorp or any other qualified bidder.

The suit, filed Oct. 10 in Delaware, where BankAmerica is incorporated, also seeks independent shareholder representation in any merger or recapitalization talks. The complaint alleges that BankAmerica board members are acting out of self-interest rather than on behalf of the company's 148,000 individual and institutional shareholders. BankAmerica has moved for dismissal of the suit, a spokesman said Friday. The bank had no further comment.

The lawsuit was filed a week after First Interstate bid $2.8 billion for troubled BankAmerica, the nation's second-largest banking company. First Interstate, a mul-tistate bank holding company based in Los U.S. Drops Investigation of BSD Chief Due to a Lack of Evidence By BILL RITTER, San Diego County Business Editor From Reuters NEW YORK-USX Corp. Chairman David Roderick and the company's suitor, investor Carl C. Icahn, are expected to reach an accord by next week that would call for a standstill on further stock purchases by Icahn, Wall Street sources said Friday.

However, the agreement would allow Icahn, who is proposing to buy USX for $8 billion, to review the financial records of the nation's largest steel company. Icahn owns 11.4 of USX stock. The unidentified sources said USX sought a standstill agreement and other measures from Icahn before company officials would allow him to do "due diligence" Close All 6 of Its Editor we were losing ground" to competing department store chains. Walker-Scott was bought out by Desmond's Associates, which is headed by Kapelovitz, and taken private last year. Walker-Scott shareholders were paid $12 per share or about 74 of the company's per-share book value in a deal valued at about $4.9 million.

Kapelovitz is president of Desmond's operators of a well-known chain of nine retail clothing stores in Los Angeles. Desmond's is the principal shareholder of Desmond's Associates. When Desmond's took over Walker-Scott, "our analysis of it was that the best thing to happen would be to open some new on his $31-per-share takeover proposal. Due diligence is the term used to describe a detailed review of financial records not typically made available by the company. Last month, Icahn proposed a takeover of USX and threatened to make a tender offer unless the company accepted his proposal or restructured itself to provide greater value to shareholders than $31 per share.

Wall Street sources said there would be other aspects to the accord with Icahn, but they would not elaborate. One said an agreement "would allow everybody to proceed on a friendly basis." Please see USX, Page 2 San Diego Stores stores and eventually sell it as a viable, going company," Kapelovitz said. "But we also knew that if we closed it we wouldn't lose any money." Leases on the six closing stores in Clairemont, College Grove, National City, San Carlos, Solana Beach and Pacific Beach have between seven and 25 years remaining, Kapelovitz said. Those leases will be offered for sale. About 200 employees will lose their jobs, with 100 workers staying on in the Escondido and Palm Springs stores, according to President Leonard Villavicencio.

A liquidation sale, with items offered from 20 to 70 off, will begin Thursday, Villavicencio said. SAN DIEGO-Federal authorities have dropped their investigation into whether BSD Bancorp Chairman James Brown's involvement in two real estate loans by a BSD subsidiary may have violated any laws. Law enforcement sources on Friday said there was "insufficient evidence" to pro- ceed with the case. A letter informing Brown of DIEGO the investigation's culmina-COUNTY tion was delivered this week. Brown could not be reached for comment Friday.

However, Louis Cumming, executive vice president of the Bank of San Diego, BSD's largest subsidiary, said he received a letter from federal prosecutors on Thursday saying that the investigation had been closed. Cumming had been interviewed by Walker-Scott to By BILL RITTER, San Diego County Business SAN DIEGO-Walker-Scott, losing money and unable to compete against larger, better-financed chains, will close its six San Diego clothing stores by the end of January, 1987, the company said Friday. The company's stores in Escondido and Palm Springs will stay open, the only remaining vestiges of a long-tTT- standing San Diego public DIEGO comPany-COUNTY "Business hasn't been too good," judged Chairman Harold Kapelovitz, who pinned the blame on "too many competing stores in the San Diego area. We couldn't compete." The stores, he said, were "losing moneythe loss wasn't so great as the fact that Friday, Nov. 7,1986 Harte-Hanks Will Sell 56 Small Units Harte-Hanks Communications announced that it plans to sell 56 of the company's smaller media companies in 12 states to focus on larger markets.

Please see Page 2 New York Exchange page 4 American Exchange 3 OTC Markets 6 Bonds 8 Commodities 3 Mutual Funds 2 Options 5 Stocks Post Modest Decline The Dow industrials dropped 5.06 to 1,886.53 as the market was confronted with rising interest rates and selling by traders cashing in on recent gains. Please see Page 2 A a NASDAQ 360.99 A (V A A'A DOW 30 1,886.53 a A a NYSE 141.50 A vx Alt WILSHIRE 2,491.705 AMEX 0.40 267.70.