The Buffalo News from Buffalo, New York • 3

A7 riday January 27 1995 The Buffalo news Business KeyIndicators DOW 3 pm 1 110 385934 DOLLAR Tokyo today yen 9935 GOLD London today $100 $38000 BONDS30 yr treasury 09 774 Business Today Loss prompts USAir cutbacks ARLINGTON Va (AP) USAir racked by two major crashes saw its losses nearly tri ple during the fourth quarter and the company said it will have to cut staff and cancel pur chase of airplanes USAir Group Inc which also has grappled with labor troubles and other costs reported a fourth quarter loss of $322 million compared with $1165 million in the fourth quarter of 1993 Chairman Seth Schofield announced im mediate steps to cut operating expenses in cluding a shrinking of the operations will result in a USAir with fewer planes and fewer Schofield said in a statement the first of these actions the company intends to defer eight Boeing 757 air craft that were scheduled for 1996 He gave few specifics of other cuts irm to compete with Nynex here OMAHA Neb (AP) MS Communica tions Co Inc has announced an agreement with Nynex Corp of New York that will allow customers a choice between local service phone companies Tire agreement allows Omaha based MS which operates in 23 states to offer local ser vice to New York customers now served by Nynex MS spokesman Steve Ingish said New York is the first state in which custom ers will have a choice between local carriers Ingish said MS is working to reach similar agreements in other states where it operates The Nynex arrangement came about after MS protested unfair treatment by Nynex and the New York State Public Service Commission ordered the two companies to reach an agree ment Ingish said The agreement will give customers the bene fits of competition such as better rates and im proved technology Ingish said ord idles two assembly plants DETROIT (AP) ord Motor Co is id ling assembly plants for the second week in a row because dealers are reacting to higher in terest rates by reducing the number of vehicles they order a spokesman said Thursday St Thomas Ont plant which builds ord Crown Victoria and Mercury Grand Mar quis sedans will shut down for a week begin ning Monday The car assembly line at Lorain Ohio will close for two weeks beginning Monday halting production of ord Thunderbirds and Mercury Cougars Closing the plants will cut production by 13200 cars and affect 3900 workers GM Indiana plant authorizes strike DETROIT (Reuters) About 2200 work ers at General Motors Marion Ind stamping plant have authorized a strike against the automaker if negotiators cannot resolve longstanding labor disputes a union spokesman said today The spokesman for United Auto Workers Union Local 977 said the vote taken Thursday is the first step toward a possible walkout at the plant which supplies stamped metal parts to several GM assembly plants Westinghouse to cut 1200 jobs PITTSBURGH (Reuters) Westinghouse Electric Corp said Thursday it will slash 1200 additional jobs and take a pre tax charge of $71 million as it expands an aggressive two year restructuring to cut costs The Pittsburgh based conglomerate which targeted 6000 job cuts last January previously said it would reduce more positions but had not specified by how much Mortgage rates mixed this week WASHINGTON (AP) Thirty year fixed rate mortgages averaged 913 percent this week up from 905 percent last week accord ing to a national survey released Thursday by the ederal Home Loan Mortgage Corp On one year adjustable rate mortgages lenders were asking an average rate of 675 percent down from 682 percent last week ifteen year mortgages a popular option for those refinancing mortgages averaged 876 per cent this week up from 870 percent a week earlier The rates do not include points In other business news Chrysler Corp raised the ante in a wid ening minivan price war Thursday offering re bates of up to $1000 on some of its better equipped 1995 models Toyota Motor Corp said Thursday it is raising prices on selected 1995 model cars and trucks as much as $1980 Spectrum Information Technologies Inc the wireless technology firm headed briefly last year by former Apple Computer Inc chief John Sculley on Thursday filed for federal bankruptcy court protection Kntght Ridder Tribune News Basic 1 173 QOIIRCP Commerce Department The Uses of How research and development funds are spent by type of research 1992: Development 589 Applied 218 'M I LI i i a LI I 3HM Texas group submits bid to buy Channel 2 San Antonio execs offer $146 million for WGRZ TV and Hawaii sister station By DAVID ROBINSON News Business Reporter A Texas broadcasting group has sub mitted a bid to buy Channel 2 and its sister station in Hawaii for $146 million from its current owner the bankruptTak Communications Inc Argyle Television Holdings II a new company formed by San Antonio broadcasting executives so far has sub mitted the only bid for WGRZ TV But it is possible that other bidders could surface before a final hearing on the offers is held on eb 22 attorneys in volved in the case said Thursday Under bid the company would pay $91 million for Channel 2 and $51 million for its sister station in Hawaii ABC affiliate KITV TV Argyle also would make a supplemental pay ment of another $4 million if it is able to buy both stations said Michael Van Sicklen an attorney for unse cured creditors is the best offer re Van Sicklen said pleased with them We think they have the wherewithal to do Another company reedom Commu nications Inc has submitted a $50 mil lion bid for just the Hawaii station said Brady Williamson an attorney for Tak A hearing is scheduled to be held on eb 22 in US Bankruptcy Court in Madison Wis to consider the bids If no other bidders step forward it is very likely that the Argyle offer would be approved then the lawyers said $91 million bid for Channel 2 is $9 million less than the $100 mil lion that Tak paid for the station in 1988 It was one of several television and radio stations the group bought mostly with borrowed money in the mid and late 1980s Industry executives have said that Tak paid too much for Channel 2 and many of its other stations during the late 1980s when the values of those properties were peaking Argyle II completed deals earlier this month to buy the ABC affiliates in Grand Rapids Mich and Jackson Miss It also owns the ox affiliate in Provi dence RI our goal to build a broadcast said Blake Byrne Argyle IPs president intent is to eventually go public "We think Buffalo is a very good marketplace and one that has some very good growth he said just look at it as a very good top 50 market and a station that probably has not had the kind of investment it would have had if its owner in Argyle's sister company Argyle Tele vision Operations Inc currently owns four television stations in Dallas St Louis Austin Texas and Birmingham Ala That company however has an agreement that would allow it to sell those stations to New World Communi cations Group Inc a broadcasting and entertainment company controlled by billionaire investor Ronald Perelman in a deal worth about $660 million New World currently owns 10 TV stations that soon will become ox affil iates following ox $500 million investment in the company last May Shared Tak president and chief ex ecutive officer of Tak Communications who came to the United States from India in 1968 started out by purchasing an Illinois radio station for $19 million in 1978 and followed up by buying four Wisconsin television stations for $22 million in 1985 He then added two more TV stations including Channel 2 and two other radio stations in the late 1980s Tak Communications filed for Chap ter 11 bankruptcy in 1991 as its debt laden media empire was further pum meled by the recession a weak adver tising climate and competition from ca ble channels that cut into the ratings for network and independent broadcast stations A group of creditors took over Channel 2 and the other sta tions in 1993 but a bankruptcy court judge in Virginia returned control of the stations to Tak last ebruary Associated Press in Source: US Dept of Commerce AP By DAVID ROBINSON News Business Reporter Electro Abrasives Corp has built an 8000 square foot addition to its Hamburg plant that could lead to the creation of 15 new jobs during the next three years the company president said Allan Ramming the president and chief executive officer said the expansion will al low the company to add a new product to its list of offerings and also expand its capacity to pro duce silicon carbide at its factory at 701 Willet Road could increase our sales by a factor of 25 percent to 75 percent over the next few Ramming said The expansion will allow the company to start producing boron carbide a material that is consid erably harder than silicon carbide and has a much longer life Boron carbide is used for armor plat ing the production of wear resistant shapes such as sand blasting nozzles and products used in nu clear power plants could be a small niche market for a small that currently employs 20 people Ram ming said By adding the capacity to make boron carbide Electro Abrasives is introducing a product that car ries the potential of being much more profitable than silicon carbide which has a profit margin of about 2 percent Ramming said been kind of concerned about the dete rioration of our profits over the last couple of he said wanted to get into a higher value added business where our customers would ask us how long it will last rather than how cheap can you sell The expansion also will double Electro Abra capacity to make water classified silicon car bide powders Silicon carbide is used to make grinding wheels and metal composites as well as to reinforce items such as aluminum castings is a high demand for silicon carbide and a bit of a shortage Ramming said Electro Abrasives already has started production of silicon carbide from the new addition and the company expects to begin production of boron car bide early next week Ramming said WASHINGTON The economy closed out last year by expanding at a robust annual rate of 45 per cent in the fourth quarter pushing all of 1994 to the strongest growth in a decade The Commerce Department said today that heavy consumer spending particularly for big ticket durable goods propelled the advance in the fourth quarter as it had throughout 1994 I he economy grew 40 percent last year The last time growth was moie rapid was in 1984 when the economy surged 62 percent during the final year of President first term in office The economy in creased 31 percent in 1993 Analysts said a slowdown appears in evitable because of a huge buildup in in ventories that could take months to draw down Economists still expect the ed eral Reserve to boost interest rates again next week but then pause to see whether the higher rates are taking hold think the ed will move into a holding pattern after that and perhaps wait several said economist David Jones of Aubrey Lanston Co a New York City government securities dealer ness will pull back in the early part of 1995 and that will lead to a drop in overall economic White House spokesman Mike McCurry said the report the strength of the economic re covery and once again reminds us that protecting the economic recovery and the creation of jobs for Amer icans ought to be at the top of every agenda in Despite the heady expansion which was in line with expectations inflation remained tame and actually declined in the fourth quarter One mea sure of inflation tied to the gross domestic product rose 25 percent in the October to December quarter compared to 35 percent in the third quarter The price index was up 27 percent for all of last year its best showing since the government began the gauge in 1983 The fourth quarter growth occurred despite rising interest rates intended to slow the economy The economy grew at a 4 percent annual rale in the third quarter Gross domestic product measures all goods and services produced in the United States ederal Reserve Chairman Alan Greenspan told the Senate Budget Committee on Thursday that he sees signs the economy is slowing from its remarkably rapid pace GDP growth at 10 year high for all of 1994 DENNIS ENSERBuffalo News Standing in front of the new micronizer control panel and holding tanks at the Electro Abrasives Corp in Hamburg are from left company president Allan Ramming plant manager James Kintzel and plant superintendent Robert A Mesanovic Expansion at Electro Abrasives adds new product line 15 jobs a SS i irv lawi HB 5 Kb KKv Gross tejW Domestic Product Percent change from previous quarter 8j l4th quarter! 7 1 45 I (Advance) ire illnl Illi ltd I 2 I 1992 1993 1994 Ouarterty at annual rats National uel reports lower earnings revenues By DAVID ROBINSON News Business Reporter Lower earnings from its utility busi ness as well as its pipeline and storage operations led to an 18 percent drop in first quarter profits at National uel Gas Co the diversified natural gas company said Thursday The Buffalo based utility said its profits fell to $2586 million or 69 cents per share from $3163 million or 86 cents per share a year ago when its earnings were bolstered by a one time gain of $383 million or 10 cents per share from an accounting rule change Without that one time charge the profits fell 7 percent from $278 million or 76 cents per share one year ago The earnings fell short of the expec tations of Wall Street analysts who had predicted National uel would earn 75 cents per share during the quarter ac cording to Zacks Investment Research National uel stock was unchanged Thursday at 26 The revenues fell by 124 percent to $2715 million during the Earnings Decline Utility operations weaken Quarter Profits 1993 Dec $316 million 1994 Mar $4384 million June $983 million Sept $374000 Dec $259 million SOURCE: National uel Gas Co Buffalo News quarter that ended on Dec 31 from $3101 million a year earlier One reason for the lower earnings and revenues was the unusually warm winter weather which led to a sharp drop in the amount of natural gas that National residential and business customers used The company's utility customers used 63 billion cubic feet of gas less during the first quarter than they did a year ago because of the weather which was 19 percent warmer than it was last year The warmer weather led to lower 0 1 earnings at its utility operation in Penn sylvania but it did not have much of an impact on the profits from its New York utility business which is covered by a weather normalization clause That clause lowers rates when the weather is unusually cold and raises them when it is unusually warm in an effort to smooth over the sharp fluctua tions that can occur because of abnor mally warm or cold temperatures The weather normalization clause boosted the bills of National New York customers by a little more than $4 million during the first quarter of this year after lowering their bills by $58 million a year ago spokesman Ar thur Coon said National uel is not covered by a weather normalization clause in its Pennsylvania service terri tory are pleased that the many steps we have instituted to mitigate the finan cial effects of unseasonably warm win ters have so thoroughly protected our earnings in the warmest first quarter in the last 10 years" said Bernard Ken nedy the chairman presi dent and chief executive officer The earnings from its pipeline and storage operations also de clined mainly because last year's profits were bolstered by a one time gain from a refund of costs related to joint stor age sites National uel's earnings from its ex ploration and production business de clined by less than 1 cent per share as natural gas prices fell by an average of 25 percent The natural gas produc tion rose by 12 percent but the average price of that gas dropped to $172 per thousand cubic feet from $228 a year ago The oil production was relatively flat during the quarter but the average price it received for the oil rose by 14 percent to $1567 per barrel National other nonregulated businesses reported higher earnings mainly because of improved margins from its pipeline construction subsidiary and increased profits from its marketing subsidiary and its timber operations Business Today.