Pittsburgh Post-Gazette from Pittsburgh, Pennsylvania • Page 14

iputaburgb JJost-farctlc 14 FRIDAY, MARCH 2, 1990 anagers9 2 firms to buy WABCO The unit has annual revenues of about $200 million and employs about 1,800, including 600 in Wilmerding and Greensburg. be run cooperatively, he said. WABCO also will manage the North American operations of other Cardo-owned rail products firms called SAB, Lucas Railway and Faiveley North American. "It's really a strategic acquisition and partnership," said Kassling, who will gain a seat on Cardo's board. He said the transaction should close within the next two weeks.

He declined to describe the ownership stakes of each investment partner or to say how many managers will participate. "Management will have a significant percentage and a large measure of control," he said. WABCO, following a wrenching restructuring in the 1980s, is once again profitable, he said. The venture partners project a rebound in the market for rail equipment. Cardo's president, Lennart Nilsson, issued a written statement saying, "A massive re- By Pamela Gaynor Post-Gazette Staff Writer A group of WABCO managers have joined with a Swedish company and a New York venture capital firm to buy the North American operations of American Standard railway braking products group.

WABCO, founded 120 years ago as the Westinghouse Air Brake is the principal asset changing hands in the $150 million transaction. It has annual revenues of about $200 million and employs about 1,800, including 600 in Wilmerding and Greensburg. In addion to an unspecified number of managers, Investment AB Cardo of Malmo, Sweden, and Vestar Capital Partners Inc. will hold shares in the company, which will remain headquartered in Wilmerding. In a separate transaction, Cardo is purchasing American Standard's non-North American railway braking business.

The 1 I equipment and extension of the railway system has begun, especially in Europe." The North American market for rail equipment hit a peak in 1978, a year when 95,000 freight cars were sold, he estimated. It then collapsed and shipments through the mid-1980s plunged to an average of about 12,000 annually. Kassling said North American deliveries of freight cars rebounded to about 30,000 last year. The partnership with Cardo and WABCO's role in managing the North American activities of the Swedish concern's other rail businesses could mean expansion of employment here, he said. "It is possible" he said, but cautioned, "Since we're in the early stages of determining where we might put certain products, I can't commit yet," he said.

Training center to open, USW says By Jim McKay Post-Gazette Staff Writer The United Steelworkers soon will open a career development center to train its members for changing jobs in the steel industry and for pursuits outside the mills. A professional director for the institute, to be jointly run by the union and major companies where its members work, will be named in the next few weeks, USW President Lynn Williams said yesterday. "The idea is to enable workers to improve their literacy, their numeracy and their skill levels," Williams told reporters before a ceremony marking the start of a new four-year term of office for himself, other international officers and district directors. The first step toward developing the institute was taken by Bethelem Steel Corp. in May 1989.

That is when it agreed to contribute $300,000 a month, the equivalent of 10 cents an hour for each worker, to the center under terms of a new contract. LTV Steel in a tentative agreement reached last weekend, will contribute $210,000 a month toward the institute. National Steel Inland and Armco have also agreed to financial support. "The money is piling up right now," Williams said. Other unions have negotiated training programs.

The United Auto Workers, for example, has negotiated joint programs with Ford and General Motors while the Communications Workers of America has career development programs with American Telephone Telegraph. But Williams said the USW's approach is unique in that it involves several employers in the same industry and may be expanded to workers represented by the union in other fields. Funding for the center was among gains Williams said the union obtained in contract talks with the union's traditional industries, which include basic steel, specialty steel, iron ore, aluminum, copper and containers. But he said the gains in recent years are tempered by the suffering of the USW members in the last decade, when the union's membership declined from 1.2 million to about 600,000. "Profit-sharing, stock ownership, gain-sharing, price-related bonuses and signing bonuses have been returning sacrifices dol-lar-for-dollar, and in many cases, more than that," he said.

He also said the USW was growing again. The union's organizing efforts have added 60,000 new members in the last four years including industrial workers, municipal employees, health care workers, security guards and bank tellers, he said. 1 Darrell SappPost-Gazette Monica and Rhonda Smith, both University of Pittsburgh students, wait to board a bus home to Harrlsburg for spring break. Greyhound passengers face drivers' strike NEWS BRIEFS Ketchum awarded Hersheypark pact Ketchum Communications Inc. has won a heated contest for a new account to promote Hersheypark and other tourist attractions in Dauphin County.

The account, which also covers Hershey resorts and destination advertising, is reportedly worth about $2.5 million in annual billings. It covers both advertising and public relations. The billings cover all costs, including advertising placement, with the agency netting up to IS percent of that amount. Ketchum won the account over three other finalists, including Pittsburgh's Marc Advertising. Newhouse estate beats IRS The Internal Revenue Service said yesterday it has not decided whether to appeal a Tax Court decision that overturned a $609.5 million IRS ruling against the estate of publisher Samuel I.

Newhouse. The court, in a decision published yesterday, sided with the estate in the only issue in one of the biggest tax disputes in the nation's history: the value of Newhouse's stock in the family's publishing and broadcasting operations at the time of his death in 1979. The IRS had contended that Newhouse's holdings in Advance Publications Inc. and Newhouse Broadcasting Co. were worth a combined $1.32 billion.

The estate insisted the value was $247.1 million. Judge John Williams Jr. valued the stock at $235.6 million. USAir takeover rumor USAir Group Inc. shares rose early yesterday on takeover speculation but fell $1 for the day to close at $31, after the buyout rumors appeared to be unfounded.

The stock traded as high as $33.75 after a report in USA Today said investor Marvin Davis is weighing a bid for the airline. Trading was heavy with 1.4 million shares changing hands. Along with the Davis report, analysts said USAir is attractive for its strong earning prospects. They said the airline is poised to have a good second half because of progress in integrating Pidemont Airlines. Kukovich: Hope for VW plant State Rep.

Allen G. Kukovich, D-Manor, said yesterday he thinks "there is a real chance" that Sony Corp. might use the abandoned Volkswagen plant in Westmoreland County to assemble television sets. Kukovich made the prediction at a press conference to announce his re-election campaign. Sony has looked at the plant in East Huntington and at a site in Marshall, Allegheny County, among other locations.

Greenspan: Drexel fall OK The stock market's mild reaction to the collapse of Drexel Burnham Lambert Inc. showed that federal regulators were right to let the securities firm fail, Federal Reserve Board Chairman Alan Greenspan said yesterday. In the government's first public testimony about Drexel's slide into bankruptcy, Greenspan told a House panel that "our concern was not with the fortunes of a particular firm" but with "the orderly operation of the financial markets." Study: steel in cars may drop The use of steel in automobile manufacture will continue to decline as plastics and related composites increasingly find their way into body panels, bumpers and chassis, according to a survey of design engineers released this week. The survey was sponsored by Mobay Corp. of Pittsburgh.

Chambers acquires two firms Chambers Development Co. said yesterday it has acquired the assets of two more firms engaged in collection and hauling of solid waste. The firms are Sweet Disposal of Johnston, R.I., and Action Garbage Services of Matthews, N.C. The new additions are expected to generate $2.7 million in revenues annually. Also in business U.S.

Bankrupcty Judge Judith K. Fitzgerald has ordered the bankruptcy case of I.D. Craig Service Corp. to be converted into Chapter 7 liquidation from a Chapter 11 reorganization. The move will not effect payouts to former policy holders or creditors Mine Safey Appliances Co.

said yesterday its board has renewed authorization to buy back up to 300,000 shares of common stock from time to time for employee stock options and awards. The action supersedes a 1986 authorization underwhich 183,000 were purchased Quaker State Corp. said it and the Oil, Chemical and Atomic Workers Union Local 3-887 have agreed on a three-year labor agreement covering 156 employees at its Congo plant in Newell, W.Va. No terms were released Texas Air Corp. has agreed to pay its Eastern Airlines subsidiary $280 million to settle a bankruptcy examiner's findings that it bought Eastern assets at unfairly low prices, the examiner said yesterday.

PEOPLE CNTIJEMQVE Roadway Package System said John P. Chandler has been named senior vice president of finance and administration. Fred Siege! has been named executive vice president and executive creative director at Ketchum AdvertisingPhiladelphia. Swedish investment and industrial holding company has annual revenues of about $1.2 billion. William Kassling, an American Standard vice president who will become chairman and chief executive of WABCO, said Cardo is paying in excess of $100 million for those operations.

Although separate, the two businesses will ment of Transportation from driving more than 70,000 miles per year. Drivers are asking that a 22 percent wage cut, agreed to when Currey paid $270 million for Greyhound and $80 million for Trailways, be restored. Simpson said drivers want the increase on a three-year contract, not a six-year pact, with no safety penalty. "They're trying to bust the union. There's no doubt about that," Cummins said.

National union officials agreed with him. Greyhound has "declared a war on the members of this union," said Harold Mendlowitz, president of Local 1202 in New York City. Greyhound has said it cannot afford to increase its $83 million, 3-year offer. The company said yesterday that the latest union proposal would cost "$30 million and counting" in the first year and more than $200 million over the life of the contract. The 3-year-old company earned its first profit last year, after being created in a buyout of Phoenix-based Greyhound bus operations.

MARKETS $0.05 0.90 Dow Jones Gold Dollar 30 Industrials Republic Bank Fed index 2,635.59 $406.70 94.10 Industry analysts gave warm weather the credit for boosting sales in what is normally a slow month for stores. One standout among the retailers was discounter Wal-Mart Stores which said its February sales surged 33 percent, while sales at stores open a year or longer were up 17 percent. In contrast, Sears, Roebuck and the country's biggest retailer, reported sales were flat. The Commerce Department said construction spending rose 1.8 percent in January, the biggest increase in more than a year. Economists credited the warmest January since the government began keeping track of temperatures 96 years ago.

Residential, non-residential and government construction spending totaled a seasonally adjusted annual rate of $424 billion in January on the largest gain since a 2.3 percent advance in December 1988. Personal income rose 0.8 percent in January despite a new tax bite from Social Security. "I At Jr. 6 Greyhound Executive Vice President P. Anthony Lannie, who is heading the company's negotiating committee, said, "The company has acted in good faith throughout the four months of bargaining and has always assumed the union was acting in good faith, too." The union last month rejected the company's initial offer by a 91.9 percent vote.

Greyhound says it serves 9,500 U.S. communities, and is the only public intercity transportation in about 9,000 of them. The company this week stopped selling tickets to destinations it could not reach by midnight, Gravley said. Union spokesman Jeffrey Nelson said working drivers would continue to their next stop at that time, then join picket lines. Greyhound spokeswoman Elizabeth Hale said the company had advised passengers this week of the possibility of a strike, and had worked to reduce the number of buses on the road at midnight.

The Associated Press and Staff Writer Regis M. Stafanik contributed to this report AI suitor now By Joyce Gannon Post-Gazette Star) Writer Japonica Partners, a New York investment group that wants to reorganize Allegheny International says it has acquired $32 million worth of bank claims against the appliance maker, making it the firm's largest single creditor. In a notice filed yesterday in U.S. Bankruptcy Court, Japonica also said that unidentified sources have made available $120 million in equity financing for Japonica to complete its $650 million, all-cash proposal to take over AI. A spokesman for Japonica declined comment yesterday except to confirm that the group purchased the bank claims.

He said some of Japonica's principal investors were scheduled to appear this morning at a hearing in bankruptcy court in Pittsburgh to discuss their plan. AI yesterday again voiced concerns over Japonica's ability to secure financing and said it was "indeed forging ahead" with its own reorganization plan. AI's plan which would pay off creditors and shareholders with stock rather than cash has already received bankruptcy court approval. Creditors and shareholders have received copies of it and are expected to submit votes on it by the end of March. FROM PAGE 1 station before their 11 p.m.

trip was to leave. They said a ticket agent had told them that, if the bus left, it would go all the way to its destination even if a strike were called while they were en route. Gary Simpson of Overbrook, an eight-year employee, said the strike would affect at least 125 drivers in the Pittsburgh area. "Finally, someone has come to hear our side of the story," Simpson said. "There has been his Greyhound chairman Fred G.

Currey's side of the story, but no one has talked to us about it." According to Simpson and driver Jim Cummins of Cincinnati, who has been with Greyhound for 18 years, the contract proposes an increase of 2 cents per mile driven. That would bring wages to 32 Vi cents per mile, they said, or roughly $25,000 a year. "You get the raise, but only providing you drive 80,000 miles safe," Cummins said. Cummins said the safety penalty is Greyhound's way of avoiding the raise. He said drivers were prohibited by the U.S.

Depart Reports suggest slowing economy By The Associated Press A variety of statistical reports released yesterday by the government and private business provided more evidence of a sluggish, but not totally out-of-sorts economy. One private report showed a continuing decline in the manufacturing economy in February, but many of the nation's retailers reported modest improvement in their fortunes during the month. The government, meanwhile, reported a mix of pluses and minuses. Construction spending and personal income were up in January, but so were home prices and mortgage rates. The reaction to the mixed signals was generally positive on Wall Street, where stock prices closed higher.

The Dow Jones average of 30 industrials rose 8.34 to 2,635.59. Some of yesterday's highlights include the following economic and business reports: The National Association of Purchasing Management said the U.S. manufacturing economy slowed for the 10th consecutive month in February, although the rate of decline was at the lowest since last June. Major chain stores reported some growth in February sales, but the outlook for the retailing industry remained grim. biggest creditor Japonica's latest move doesn't affect the company's plan, said Robert Sable, attorney for a committee of AI's unsecured creditors which supports AI's own plan.

Sable also questioned Japonica's ability to get financing. "They said they have $120 million available to them, and they say they're highly confident they'll get bank financing. But we don't have the names of financing sources or any backup," Sable said. However, Japonica has boosted its credibility by becoming a major creditor, Sable observed. "We now have to look more carefully at what they propose." In yesterday's filing, Japonica revealed it had been assigned claims previously held by Canadian Imperial Bank of Commerce, Harris Trust Savings Bank, The Northern Trust Co.

and Israel Discount Bank of New York. The transferred claims include $12.6 million from Canadian Imperial, $11.2 million from Harris Trust, $5.6 million from The Northern Trust and $2.8 million from Israel Discount Bank. The claims do not include any those institutions may have held against AI's Sunbeam Corp. subsidiary, the filing stated..