The Pantagraph from Bloomington, Illinois • Page 25

Stocks i overview Detailed reports Inside ecu nszrz -3 98 -2i7 Saturday, Jan. 13, 1996 The Pantagraph 0.00 0.15 028 5061.12 601.81 1008.23 Kmart bonds hit 'junk' level Game over: Role-playing game design firm closes 0f I AP DETROIT (AP) Standard Poor's lowered Kmart bond rating to junk status Friday, a move the retailer said was "excessively severe" but unlikely to cause any immediate cash problems. said it took the action because Kmart had lost significant market share to more efficient and profitable discounters such as Wal-Mart Stores Inc. and the Target chain of Dayton Hudson Corp. "Despite very significant efforts by a new management team, it is beyond a two- to three-year horizon for Kmart to again generate operating and financial performance measures that represent an investment-grade credit," the rating agency said in a news release.

The news also came one day after Kmart announced it had reached agreements with all its banks and other lenders to restructure $548 million worth of real estate debt Under previous provisions, those lenders could have forced Kmart to repay the debt immediately once its credit rating fell to junk bond level as it did Friday. Wall Street analysts feared that would have caused an immediate cash crisis and would have forced Kmart to seek bankruptcy court protection. The so-called "put-back" provisions will be "substantially eliminated" as a result of the new agreements when they are closed next month, Kmart said. said that the bank agreements were a "major positive," but that Kmart needs to establish a definitive financing plan for the next two years to restore a good credit rating. The rating agency cut Kmart's senior debt rating to "BB" from "BBB," and reduced its rating on Kmart's commercial paper to from "A-2." The move affects about $3.4 billion in debt.

The BB rating is one notch below investment grade, making the bonds a speculative investment that is out of bounds for many trusts and investing institutions. The lower the rating, the higher the rate of interest a borrower must pay creditors to offset the risk. By PAUL SWIECH Pantagraph business writer A Bloomington-Normal business that created fantasy role-playing and simulated war board games and wrote a best-selling book about the prelude to the Persian Gulf War is about to become a victim of economic realities. Game Designers' Workshop commonly referred to as GDW, is going out of business. The small, uncommon company has been based here for 2212 years the first 21 in an old upstairs office at 203 North St, Normal, and the last year and a half at 715 E.

Empire St, Bloomington. But the business' out-of-the-way locations and experience couldn't shield it from a changing market. "The main reason (we're going out of business) is because the market has changed so that our company's product line was no longer selling well enough for us to remain in business," explained Frank Chadwick, A security vehicle patrolled the parking lot of a Kmart store in Detroit. Standard Poor's lowered the corporation's bond rating to junk status Friday, affecting about $3.4 billion in debt. Restructuring boosts jobs at Cutler Hammer "1 "It was kind of unexpected.

We had estimated 70 to 100 jobs initially," Becker said. The firm underestimated the effect of it workload because of other plant closings since it purchased a division of Westinghouse two years ago, she said. The production of load centers, the box that holds circuit breakers, increased and new load center products and meters caused an additional need for personnel. The growth, which brought the number of workers to 750, was unrelated to the closings of the two other Lincoln businesses, Becker said, although the timing was good enough to cause the city to draft a resolution thanking the firm for replacing jobs lost by St PaulEconomy and Reckitt Colman. But the growth wasn't planned, and would have been hard to predict, Becker said.

"In July, breaker production went elsewhere. We were actually overstaffed for a while," she added. By JIM STAHLY JR. Pantagraph staff LINCOLN While sale and restructuring has cost Lincoln two important employers, the same thing at Cutler Hammer has benefitted the community. Economy Insurance and Reckitt Colman closed in 1995 after being purchased, causing about 450 jobs to disappear or move.

But similar actions within Eaton Hammer's structure have brought jobs to Lincoln. "We've hired 350 hourly people since July," said Patti Becker, human resource manager for Cutler Hammer, adding because the firm had less than its usual 550 employees before the hiring began, the net gain is closer to 200 to 250. Some growth had been anticipated after the company purchased $10 million worth of new equipment in May to make newly designed power distribution products. But the actual number was something of a surprise. Traders at the Boston Stock Exchange are seen in action an hour before the closing bell.

The New York Stock Exchange has always been the big guy on the block, but in recent years regional stock exchanges in San Francisco, Boston, Chicago, Cincinnati, Philadelphia and Los Angeles have been taking away some of the NYSE's business. Regional exchanges stealing business from top dog NYSE GDW president and co-founder. Although people are still playing Game Designers' role-playing and war games, the numbers have been declining in recent years, Chadwick said Friday. New entrants into the fantasy and historic games market such as collectible card games and computer games are taking business away from more traditional board games. The erosion of business has been happening over several years and Chadwick decided recently to close the business.

GDW is still accepting orders and is trying to place existing game lines with other publishers so the games can continue to be made available to customers. As for the company's inventory, GDW is trying to help meet its obligations to creditors by distributing inventory to them, Chadwick said. Chadwick said GDW is not taking bankruptcy. He believes that the See GAME, Page C4 FAA rules direct pilots on plane ice By Associated Press with Pantagraph staff WASHINGTON, D.C. Deadly aircraft icing can be avoided if pilots learn to recognize the danger in time, the Federal Aviation Administration said Friday as it prepared to issue a series of new directives for fliers.

Anthony J. Broderick, FAA associate administrator for regulation and certification, said new instructions will be issued in a few weeks on dealing with icing conditions. Spokespersons for two of the three commuter airlines that fly out of the Bloomington-Normal Airport told The Pantagraph that they didn't think the directives would have much impact on their airlines because they've made changes since the 1994 crash. Neither Mitch Baranowski of American Eagle nor Bill Mishk of Trans States Airlines, which operates Trans World Express, had seen an advance copy of the directives. But they were aware of their general focus.

"We don't think it'll affect our operations," Baranowski said. Since the accident, which involved an American Eagle plane, the airline has worked with the plane's manufacturer and the Federal Aviation Administration on plane design adjustments, new and enhanced meth- See ICE, Page C4 Seed firm relocates B-N office By CHRIS ANDERSON Pantagraph farm editor Golden Harvest Seeds central office has relocated to larger quarters at 220 N. Eldorado Road, Bloomington. The office had been situated at 513 E. Locust St, Bloomington, since 1973.

Chuck Finley, executive vice president, said the operation simply needed more space. The newly rented quarters east of Veterans Parkway contain space for a conference room, for example. "I'll be retiring in May, and a new person will be located here. We may need to hire more people," said Finley. "Bloomington is in the heart of the Corn Belt Since Golden Harvest is a prominent player in seed corn production and marketing throughout the area, it makes sense to maintain these operations here." Finley oversees seed production quality control, fields national advertising inquiries and coordinates communications among the five Golden Harvest member companies.

Those include Thorp Seed Co. at Clinton and Sommer Bros. Seed Co. at Pekin. Other members are Garwood Seed Co.

at Stonington, Golden Seed Co. at Cordova and J.C. Robinson Seed Co. at Waterloo, Neb. Existing office staff includes administrative assistant Jean Bernardi.

She manages the office, arranges committee and director meetings, coordinates national sales conferences and maintains company records. The office can be reached at the following new telephone number (309) 664-0558. The company's toll-free number remains 1-600-610-7333. Farm Bureau seeks end to budgetary squabble By CHRIS ANDERSON Pantagraph farm editor American Farm Bureau Federation members concluded their annu looking to recapture some of its lost share. "We do treat them (the regional markets) as serious competition," said Edward Kwalwasser, the NYSE's group executive vice president responsible for regulation.

"We believe customers should go to the best market we believe that we are the best in most areas." In October, the exchange set up a pilot project with Merrill Lynch Co. the nation's largest investment firm, called NYSE Prime. The program informs investors of how much money they save on stock transactions executed on the NYSE. The savings will come as a result of "price improvements," which are the execution of market orders at a price better than the best current bid or offer for that stock. Merrill, like many other firms, trades both on NYSE and on the regional exchanges, but it decided to reduce its business in the Boston and Pacific exchanges because of the Prime program.

"The company believes that the primary markets, as they have evolved, are the most liquid and consistently provide clients with the best opportunities for price improvement," Merrill Lynch said in a statement "When Merrill decided to take their order flow off Pacific and Boston that led to the impression which was a misperception that the quality of the regionals was inferior to New York," said Nicole Kalicki, spokeswoman for the Boston Exchange. The Prime program has since been opened to all member firms of the NYSE and many have indicated interest in it, said Andrew Yemma, vice president of media relations at the NYSE. BOSTON (AP) The New York Stock Exchange has long held its reign as the granddaddy of the big markets. But some regional exchanges that always trailed in the shadows have taken a chunk of the Big Board's business. That's stirring some infighting and both sides are trying to position themselves to come out ahead.

Last year, the regional exchanges located in Boston, Philadelphia, Chicago, Cincinnati and Los Angeles and San Francisco, which share the Pacific Exchange accounted for almost 20 percent of consolidated tape trades the combined business of NYSE and all the regional exchanges. That's a far cry from the early 1970s, when the regional exchanges accounted for only about a 5 percent share. Much of the increase stems from a bill passed by Congress in 1975 that forced dealers to trade stocks at the best price, no matter which exchange offered that price. "Any educated businessman knows that competition is important," said Andrew Kolinsky, senior vice president of marketing at the Chicago Stock Exchange. "If there was only the NYSE, I don't think businessmen would be very happy.

Giving us business is important to keep New York competitive. We can't be as good, we have to do better." After Congress' decision, the smaller markets began nibbling at New York's heels, whittling the giant's share of the market to a low of about 65 percent of consolidated trades in 1992. But recently the NYSE, spearheaded by new Chairman Richard Grasso, has been fighting back, program payments with a system that gives farmers more planting flexibility and gradually declining market transition payments. Most of the existing farm program has expired. Kleckner, unanimously re-elected to his sixth two-year term as AFBF president, said it is urgent a budget agreement be reached as quickly as possible.

Annual meeting delegates also expressed concerns via policymaking efforts by calling for a congressional investigation to examine the problem of livestock packer concentration, formula pricing and packer ownership of livestock. The policy resolution called for the Agriculture and Justice departments to investigate all mergers, ownership changes or other trends in the meat packing industry that could limit a competitive U.S. livestock market Delegates further urged aggressive action against the European Union's ban on hormone-treated U.S. beef. They asked the World Trade Organization to resolve the dispute.

Delegates believed the ban constitutes a nontariff barrier that has no scientific or sanitary basis. See SQUABBLE, Page C4 al meeting in Reno, this week by writing President Clinton and members of Congress urging quick agreement on a federal budget and new national farm legislation. "The situation is especially critical for America's fanners and ranchers who need to make planting decisions for the 1996 crop year now. Simply extending the 1990 farm bill or allowing farm programs to revert to provisions of the 1949 act could be disastrous from both a budgetary and policy perspective," said Dean Kleckner of Iowa, AFBF president Meeting delegates agreed to support the framework of the congressional farm bill compromise reached last November, provided it is part of a budget package that includes tax relief, spending restraint and a balanced budget within seven years. Spending provisions of the farm bill are included in the budget compromise, which was initially vetoed by Clinton, but is still on the negotiating table.

Proposed farm provisions would replace the current system of farm Italians still buzzing on Vespas cities. The Vespa's old rival, the Lambretta, plans to return to the market this year. But Piaggio still holds about 43 percent of the small scooter market in Europe. Italy has generally run on fast-forward since World War II. The Vespa has remained an enduring constant New models look very much like the originals: a wide front leg shield, bicycle-style handle bars, a tapered midsection and a flared and rounded tail a shape that inspired the name Vespa, Italian for wasp.

Piaggio makes more powerful and flashier motorbikes, but the Vespa remains a mainstay. More than 200,000 Vespas were sold around the world in 1995; 15 million since 1946. "The Vespa carries a lot more than just people. It symbolizes the reconstruction of Italy after the war," said ROME (AP) A recent movie depicts an Italian vision of the perfect morning: sun-bathed buildings, no traffic, trees in full bloom. And a Vespa with a full tank.

Motorbikes are a key element in Italian life, providing not only cheap transport but lots of panache as well. The Vespa, the granddaddy of them all, turns 50 this year. The waves of nostalgia are already big and will get bigger in advance of an international Vespa gathering in June on the Italian Riviera and the opening of a museum by the Vespa manufacturer, Piaggio, at the corporate headquarters in Pontedera near Pisa. At the same time, Piaggio is trying to continue a rebound after lean years in the 1980s. Honda scooters have cut into Vespa sales in some Roberto Leardi, head of the Vespa Club of Italy, which has about 80 chapters.

"I can still remember the days when a family of four would pile onto a Vespa. The father driving, the mother behind and the children on both ends." The veneration also extends beyond Italy's borders. The U.S. representative to the International Federation of Vespa Clubs, Rolf P.J. Soltau, says some 48 Vespa clubs in the United States have a membership of more than 2,000.

Vespas were imported in the United States beginning about 1950, but that ended in 1984, largely because their two-stroke engines did not meet emissions standards, Soltau said from Los Gatos, Calif. See VESPA, Page C4 American actors Eddie Albert, Gregory Peck and Audrey Hepburn, all sit on a Vespa scooter during the shooting of "Roman Holiday" in Rome in 1953..