The San Francisco Examiner from San Francisco, California on February 11, 1982 · 34
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The San Francisco Examiner from San Francisco, California · 34

San Francisco, California
Issue Date:
Thursday, February 11, 1982
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C2 S.F. EXAMINER rtrC Thurs.. Feb. 11, 1982 Washington's ubiquitous consulting firms hit by hard times By Vic Ostrowidzki Examiner Washington Bureau WASHINGTON The power mower that is cutting a broad swath through the federal bureaucracy is mowing down hundreds of consul tants who have sprouted up in the nation's capital over the last three decades, nourished by lucrative government contracts. Firms that have helped federal agencies push alternative energy and affirmative action programs and attack poverty and pollution are finding that their contracts are not being renewed. "I think there's going to be a lot fewer consultants here a year from now," says a prominent economics consultant, expressing the feelings of many of his col- Government watch leagues. "Many smaller firms are likely to go out of business altogether." With the Reagan administration in the process of dismantling the Energy Department, the. hardest hit consultants are in the energy field. Planning Research Corp., which once had a staff of 200, is down to 10. TRW Inc. dropped 158 people from its payroll, a reduction of 50 percent. Booz, Allen & Hamilton Inc. cut its energy staff by 30 percent. The consultants are also up against a series of directives aimed at reducing federal funds that had gone to them. In April 1980, President Jimmy Carter ordered consultant spending cut by 15 percent for 1981. President Reagan ordered an additional 5 percent cut. Then in the fiscal 1982 budget. Congress called for an additional $500 million reduction. One of the largest employers in the United States is government, with 10.3 million workers on state and local payrolls, according to the Census Bureau. Of that total some 5.1 million belong to labor organizations and are covered by 34,751 separate labor-management agreements. Independent , school districts have the largest proportion of organized employees, 60 percent, while township governments have the smallest yfth 3 percent ' , ., v ' Congress is showing signs of increasing concern over the widening trade gap with Japan in electronic equipment Both the Senate- and the House are taking a close look at legislation that would severely restrict importation , of telecommunication equipment from countries that do hot provide "reciprocity in access to markets" to US. manufacturers. The bills are not explicitly aimed at Japan, but they still are viewed as a response to what VS. officials maintain is the unsatisfactory implementation of the Ui.-Japan trade . agreement signed in 1980. The Social Security trust funds are going into the red at the rate of $18,800 a minute, according to John A. Svahn, commissioner of the Social Security Administration. Svahn estimates that even if the economy performs well, the system faces a deficit of $80 billion over the next five years and a $1.5 trillion deficit for the longer term. Congress therefore may have little choice but to reduce future benefits, Svahn told the American Council of Life Insurance recently. '" , ,,. .-. ;., ',' The council reports that the number of older Americans, those 65 and over, will Increase from" the 25 million v registered in the 1980 Census to some 32 million by the year : 2000. - IN AND AROUND WASHINGTON: A top tourism promotion priority of the Reagan administration is to enact visa-waiver legislation that would waive visa requirements for tourists from 23 nations those whose current "visa refusal rate is less than 2 percent, including Japan, countries in Western Europe and parts of Africa . . . State highway agencies spent $30.1 billion on highway-related projects and activities in 1980 . . . Although school enrollments have declined 13.5 percent since 1971, total expenditures for public elementary and secondary education have climbed 121.6 percent over the same period, according to Tax Foundation economists . . . Rep. Frank Annunzio, D-IU., has introduced a bill that would prohibit oil companies from imposing surcharges on their gasoline dealers who honor' the oil companies' credit cards. Printer files suit over IDC bill From Page CI company. Bernhard Dohrmann, former director of corporate planning who was one of the five indicted executives, was "terminated," according to Lewsader. Dohrmann's wife, Susan, who is one of the company's three coowners, has taken an indefinite leave of absence. And another of the five indicted men, national sales director George Kessler, has retired. Gorman noted the layoffs, Dohrmann's termination and the indictment in the legal documents and cited them as reasons he believes IDC will not pay the printing bills. "1 now believe that the officers and other representatives in charge of IDC have no intention to pay me any portion of the $207,748.39 owed." he said. Gorman added that he "was informed by several IDC employees" that "IDC had no money to pay me on the indebtedness owed for the printed products specially manufacture pursuant to IDC's request" The printer said he based his opinion and belief that IDC would not pay its bills "upon my experience as a businessman and my experiences during the past six years as a trade creditor of IDC." Gorman, who says he has written agreements with IDC for his work, stated that IDC accepted delivery Jan. 15 of $142,761.69 in goods. He said he informed the company Jan. 28 that additional goods costing $64,880.70 were ready for delivery. In a conversation with Dohrmann "on or about Jan. 27 or 28," Gorman said he asked if IDC would pay its bills and inquired about when he should send the undelivered goods. "He iDohrmann'i represented to me that IDC did not want delivery, that it would not use any more printed product supplied by me unless it was already delivered and that IDC had no money to pay me," Gorman alleged. Two days later, on Jan. 29, Gorman said he and his wife met with a Trisha Galvis-Assmus, identified as an IDC employee with whom he had worked "several times during the past several years." He said she told him IDC had been "hauling stuff out of the big building like crazy." Alarmed by the information, Gorman said he went to IDC on Feb. 3 to meet with Lewsader and Steven Greenbaum, Susan's brother and the third part-owner of IDC. "At that time, Mr. Lewsader informed me that IDC would be selling a lot of stuff off.' He then said to me, 'You might start thinking about things around here that you would like to have,' " Gorman wrote. "Mr. Lewsader also informed me that IDC was closing its operations in five of its six offices. "He also stated to me that IDC just didn't have any liquid cash it could use in order to pay me and that I was perfectly able to sue them." Gorman said that after the meeting he called Dohrmann, w ho said he was no longer in charge of corporate planning for IDC. "He stated to me that IDC would not be able to keep its business going for more than 30 days," Gorman said. The Examiner could not reach Dohrmann for comment. On Feb. 8, Gorman said he spoke with Susan Greenbaum. "She said he i Lewsader! also estimated that IDC would be in business for another two weeks." Gorman wrote. IDC is currently moving out of its marketing offices at 101 Lucas Valley Rd., according to Tom Brown, manager of the IDC lease there. The diamond company paid rent on the office space through Feb. 22 and has indicated it will find a replacement tenant to assume the lease, which expires at the end of September 1984, Brown said. ' "They moved in in early October last year and never really filled it (the office)," Brown said. "It was very well decorated. They spent a lot of effort to give the look to this facility that they wanted to create." IDC changed the locks on the offices "last week or the week before," Brow n said. "I think when they had that round of layoffs, including some senior people, it created a situation where they needed to change the locks," he said. Managers of IDC leases at three other facilities, listed in Gorman's declaration, reported that the diamond company had regularly paid its rent and had not indicated any intention to vacate. Gorman also stated in the document that he was approached by an IDC purchase agent, who he identified as George Williams, at the end of January. Williams, who Gorman said went by the nickname of "Little Man," requested the printer to "pull all film for all legal documents printed for IDC," Gorman wrote. Robert Williams, graphics director at IDC whose receptionist said he sometimes goes by the name "Little Man," yesterday said he was familiar with Paragraphics but wasn't certain about how much the company owed. He added that bills for Paragraphics probably were "in the stages of being processed." The printing work, most of which involved an upcoming IDC "Super Conference," was halted when the event was postponed, he said. The request for legal documents was predicated by IDCs need to find "anything that has a disclaimer" in connection with the Super Conference, Williams said. China plans offshore oil bids PEKING (AP) China may invite foreign bids for offshore oil exploration soon, Chinese press reports indicated. But the reports said development of commercial offshore oil fields is more than seven years away. Bids are to be invited as soon as the China National Offshore Oil Corp. is set up. The official English-language newspaper China Daily said this could come within a day or two. Regulations governing offshore exploration were issued yesterday. They specify that all costs of exploration are to be born by the foreign companies, but that if commercially productive fields are found, the companies can recover their costs and make a profit The China Daily said Ji Zhunwei, an official of China's Import-Export Commission, has estimated that the equivalent of $20 billion will be needed for development of offshore oil projects in the 1980s. Some foreign oil specialists have predicted development of offshore oil could double China's current annual production of 100 million tons in about 20 years. It takes about seven to eight years to bring an oil field into production. Dean Witter's headquarters moved to N.Y. Dean Witter Reynolds, long identified as a San Francisco brokerage institution, has moved its headquarters to New York and undergone a corporate reorganization But the action, described as a "decentralization," will not involve movement of San Francisco personnel or jeopardize local operations, according to executive vice president Samuel H. Wolcott II. The reorganization, announced yesterday, includes creation of four separate units of Dean Witter Reynolds Organization Inc. The holding company was based in San Francisco until its merger in December with Sears, Roebuck & Co., where it is now part of the , Financial Services Group. At that time, organization headquarters was shifted to New York. The decentralization, aimed at speeding decision-making within the firm, will result in four major corporate units Dean Witter Reynolds Inc., which will include the branch system and institutional sales; Dean Witter Reynolds Capital Markets, to encompass corporate and public finance and syndicate activities; Dean Witter Reynolds Intercapital, consisting of mutual fund and money management activities, and Dean Witter Reynolds International, including foreign offices and worldwide trading activities. Under the shift, San Francisco-based Wolcott will become a member of the management committee of Dean Witter Reynolds Organization. Andrew J. Melton Jr. will continue as chairman and chief executive officer of the holding company and Robert M. Gardiner will continue as president In addition to Wolcott the management committee of the holding company will include Melton, Gardiner, Keith S. Wellin, Lincoln Ames and Thomas C. Schneider. Pacific Telephone net jumps a robust 20.8 Pacific Telephone & Telegraph Co. says its 1981 net income jumped 20.8 percent from a year earlier because of rate relief, accelerated marketing activity and gains in productivity and cost control. The company yesterday reported that 1981 net income was $438 .8 million or $1.90 per share on revenues of $6.8 billion for the year. That compares to net income of $363.4 million or $1.81 per share on revenues of $5.8 billion in 1980. Pacific Telephone chairman Donald E. Guinn said that earnings were strengthened in the fourth quarter "as a result of much needed rate relief granted in August by the California - Public Utilities Commission. Afrer . some very difficult years, we feel that we are back on the road to financial stability." Guinn said the company has continued to make productivity gains well above that of the economy as a w hole. That coupled with aggressive marketing and firm cost controls, contributed to the improving earnings picture, he said. Areata Corp. shows downturn of 5 cents a share in quarter Areata Corp., Menlo Park, reported that second quarter fiscal 1982 net earnings from continuing operations were 31 cents per share or $3.1 million on sales of $121.4 million compared with 36 cents per share or $35 million on sales of $111.5 million for the like period last year. In the second quarter there was a net loss from discontinued operations, of $68.8 million. This included a net loss of $71 million resulting from the sale of the Keyes Fibre Molded Container group to Royal Packaging Industries Van Leer B.V. In the like period last year net earnings from discontinued operations were 54 cents per share fully diluted or $4.4 million. Total second quarter results were a loss of $9.89 per share or $65.7 million compared with net earnings of 90 cents per share fully diluted or $7.9 million for the like period last year. For the six months ended Dec. 31 earnings per share from continuing operations were 72 cents or $7 million on sales of $237.5 million compared with 86 cents per share or $7.9 million on sales of $219 million for the first half last year. Earnings" Alza Corp., Palo Alto, said its net loss for the year ended Dec. 31 was $6598,000 or 84 cents per common share compared to a net loss of $2574,000 or 37 cents per common share for the year ended Dec. 31. 1980. after a gain in 1980 of $4,078,000 or 52 cents per common share from the sale of one of Alza's facilities. Jhirmark Enterprises Inc., Redding, said that sales for the nine months ended Jan. 31 reached a record $24.194.000, 37 percent greater than the $17,637,000 registered for the like period last year. Earnings for the . period rose 83 percent to $2342.000 or 83 cents per share vs. 45 cents per share on net earnings of $1,227,000 a year ago. Sales for the most recent quarter totaled $8,118,000 and represent a 36 percent increase over the $5,989,000 reported for the corresponding quarter in 1981. Net earnings at $1,192,000 or 44 cents per share were up 155 percent compared to $467,000 or 17 cents per share for the like three month period last year. Bucky Walter: The Evening Muse only in The Examiner Atari summer camps for would-be computer whizzes By John Lckhouse Examiner business writer In a marketing effort aimed at nurturing youthful computer enthusiasts on its machines, personal computer manufacturer Atari Inc. of Sunnyvale will conduct eight computer camps this summer for 10-to 18-year-olds. While computer camps originated several years ago, the Atari Computer Camps appear to be the first sponsored by a manufacturer of home computers. Not surprisingly Atari's camps will offer training only on Atari computers. Most computer camps feature a variety of machines such as the Apple, Atari, Texas Instruments and Radio Shack models. At present Atari is much better known for its video games than for its computers. Although the company, owned by Warner Communications Inc., does not release sales figures for its computer division, industry sources say the business has yet to show a profit Unlike most other personal computer manufacturers, Atari has chosen to aim its machines at the potdntially lucrative home market with more than 80 million U.S. households. The company also has stressed volume sales to school districts, hoping children who use Atari computers in class will influence parents considering a purchase for the home. "Computer camps fit nicely in both of those areas," said Peter Nelson, manager of public relations for Atari's home computer division. "The camps fit in with our marketing goals and we will learn things about how people use computers." Atari will conduct eight computer camp sessions this summer, two in each of four locations in various sections of the country. Camp sessions will last three to four weeks and will cost about $1,600. The camps will be operated by Specialty Camps Inc., which has 25 years of experience in running theme and traditional camps. Linda S. Gordon, Atari vice president-special projects, said formal instruction will last two hours each day and classes will be limited to either 10 or 12 campers. There will be one Atari model 400 or model 800 computer for every two persons. In addition the computers will be available for use during the campers' free time. And to make sure the campers do not miss out on traditional childhood activities, the camps will offer a variety of sports and arts and crafts activities. 1 I III mMHMMMmnMim,,, mi You're the boss A column for small businesses begins on Monday $100 Silver and $1,000 Gold . MYTH OR REALISTIC POSSIBILITY? A serious gold and silver seminar for thoughtful investors who are genuinely concerned about inflation and for those who suspect that current Reaganomics and good intentions will not be sufficient. Review the possibilities of a re-inflationary response to unprecedented trillion dollar debt, trillion dollar defense spending, and deep recession fears. How will this impact near-term precious metals prices? 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