Pittsburgh Post-Gazette from Pittsburgh, Pennsylvania • Page 46

PITTSBURGH POST-GAZETTE FRIDAY, AUGUST 31, 2001 Recounting, merger problems plague TruServ lar moves may not find the same open arms. Ace and Do It Best have policies against accepting new members located near existing member stores. Even if they wanted to pounce on the disarray at TruServ, they don't have the infrastructure to absorb thousands of TruServ dealers, officials at both co-ops say. Their warehouses and ordering systems would be overwhelmed, and customer service would suffer, just like what happened in the late 1990s when TruServ acquired ServiStar. "We need to be very selective," said David Heist, senior vice president of member services at Do It Best.

"We would never bring on new members to the point it would affect service." Likewise, Ace has positioned itself to cherry-pick TruServ's best members. "We know exactly who we want. We know where they are and how they fit," said Ken Nichols, Ace vice president of retail operations. Ace has allocated extra resources this year to cover the cost of helping TruServ members convert to its ordering systems and signage. And it's picking the brains of such converts as Courtney to figure out how to make the changeover less traumatic.

That may be good news for the True Value store owners Ace has on its wanted list, but it's just another thing for the top brass at TruServ to worry about TRPSERV FROM PAGE C-1 lencC said Pamela Forbes Lieber-man, TruServ's chief financial offi-t and chief operating officer. -Bankruptcy is not part of the picture," she said. "Prospective lenders are quite happy with what we showed them. We're moving in the right direction." TruServ expects to have commitment letters by early September and is in negotiations with its current lenders in hopes of getting thera to continue financing the co-Ijliirtjeyond Sept. 30.

A new asset-IJwcked loan agreement should be in OjllaEe by the fourth quarter, Lieber- IffcerXop 10 initiatives pay off consolidating warehous-I "jpsteducing returned merchandise fii diimping slow-moving products TflftiServ should be able to post a I profit of $15 million to $20 mil-; Xdh'Jp 2002, she predicted. cash flow from operations has- improved, and TruServ i Jias enough cash to pay its suppliers 1 tioie. Lieberman said. if a new loan agreement through, there's no question that TruServ is troubled. Foi decades, TruServ's Cotter prospered as the leading buying co-op in the hard-; ware business.

But in 1997, with Ace nipping at its heels, Cotter made a bold move, acquiring Butler, based ServiStar Coast to Coast a rival co-op that was the result of a previous combination of coops. The strategy made sense: With more members and bigger sales, the new company TruServ wield more clout with manu- declined 11 percent to $3.99 billion. Meanwhile, second-place Ace has been growing, helped by defections of about 125 TruServ dealers annually since 1996. The co-op racked up $2.95 billion in sales last year, a 5 percent increase. Do It Best the third-largest co-op, has been adding 300 dealers annually for the past several years, bringing its membership to 4,300.

Sales in fiscal 2001, ended June 30, fell 10 percent to $2.20 billion as lumber and other commodity prices dropped, but profit was up 3.6 percent to a record $86.9 million. TruServ has tried to halt the outflow of members by placing a moratorium on redemptions of its stock, which members are required to buy when they join. But after a 65 percent devaluation in the stock related to the accounting errors, that investment is easier to walk away from, members say. Courtney, for example, lost $25,000 of the value of his stock but says he made that back in one year with Ace's patronage dividend. Still, the remainder is a lot to lose for those who have been with TruServ for decades.

Some longtime members have $500,000 or more tied up in TruServ stock, which doesn't trade publicly. And with TruServ expecting to post an operating loss in 2001, there won't be a patronage dividend this year either unless the paint factory sale goes through. As the co-op's problems mount, the options of TruServ loyalists dwindle. Courtney was lucky because Ace was happy to have him a competing Ace store in Alpena had gone out of business. But other TruServ members who are considering simi year when TruServ owned up to years of lax accounting practices.

More than $100 million in accounting errors forced the co-op to post a $131 million loss for 1999 and wiped out the patronage dividend to members. Just this year, TruServ was forced to restate three years of its financials because of a different set of accounting mistakes. TruServ Chief Executive Officer Donald Hoye resigned in July, and a search for a new CEO has just gotten under way. TruServ Chairman Bill Blagg is filling that role on an acting basis. Already, corporate trimming has reduced the southwestern Pennsylvania operations inherited in the ServiStar purchase.

Late last year, TruServ sold its lumber buying group to Builder Marts of America, giving 64 traders a new boss. This spring, the company relocated its commercialindustrial business sales unit from Butler to Chicago, eliminating jobs in the Pittsburgh region. TruServ still has 146 associates in its Butler offices with another 29 in its Butler distribution center. In addition, the co-op uses Pittsburgh-based advertising agency Marc USA to handle its marketing. That relationship appears strong, with the campaign for 2002 already being presented to members.

As TruServ's problems have mounted, its membership has headed in the other direction. As recently as four years ago, the co-op had more than 10,000 members That number has shrunk to 7,535, but TruServ still ranks as the industry's largest co-op in number of members and sales. Last year, revenue TruServ Chief Executive Officer Donald Hoye resigned in July, and a search for a new CEO has just gotten under way. facturers. That should have meant bigger quantity discounts and priority deliveries, something TruServ's independent owners desperately needed to compete with such larger, aggressive home improvement chains as Home Depot, Lowe's and Menards.

But the merger didn't go according to plan. TruServ, which had Eledged to allow store owners to eep their ServiStar and Coast to Coast names, soon found maintaining three brands of products was far more inefficient than expected. The delay in moving to one name and a single computer system delayed the integration of the companies, driving up merger-related costs. The biggest setback came last The bulk of the checks up to $300 a person or $600 a couple, representing advance refunds on 2001 income tax should be arriving in mailboxes this month and next. If people spend some of the money, economic growth should get a boost, analysts said.

"Back-to-school sales will really tell the story, and with retailers competing fiercely for the rebates, they will probably be quite good," Naroff said. With income growth outpacing spending, the nation's personal savings rate savings as a percentage of after-tax income rose to 2.5 percent in July, the highest since June 1999. Private economists and the Bush administration are counting on the tax rebates along with the Federal Reserve's seven interest rate cuts this year to lift economic growth to healthier levels in the third and fourth quarters. In the second quarter, the economy grew at a rate of just 0.2 percent, the weakest performance in eight years. Steady spending by consumers in that quarter helped keep the economy out of recession.

Some economists believe consumers' lackluster spending in July reflected worries about keeping jobs Local portal merges into Despite refunds, spending M0T0RCITYV1EW DORON LEVIN Automakers silently want union victory The United Auto Workers union is nothing if not obstinate: After three defeats in 12 years, the union once again is trying to organize Nissan Motor Co. assembly plant in Smyrna, Tenn. American automakers will be rooting fervently, if silently, for a union victory. General Motors Corp. and Ford Motor Co.

as well as Daimler-Chrysler AG have been losing market share to Japanese competitors for years. The once-mighty Big Three are all union-organized and want Japanese rivals to face the same labor costs as a counterweight to their better productivity. Make no mistake: If U.S. chief executives could make the UAW vanish from their own plants, they would do so quickly. That's not an option.

For now, they want to see Nissan struggle with the costs and problems that a union brings. The representation election for Nissan's 4,100 hourly workers in Tennessee is expected to take place by early October. Nissan and other Japanese automakers are determined to keep the UAW at bay. Even without the UAW Nissan and other Japanese automakers in the United States already pay about the same wages as the American companies. That leaves the UAW with little else to entice workers but better benefits, such as pensions and health plans.

Nissan's compensation strategy worked brilliantly when its plant opened in 1983. Most of its workers were young and didn't worry about retirement or health problems that might come with their jobs. Today the average age of a Nissan worker is 40, and some are grumbling. "When the workload is more than you can do, you don't hold up until retirement," said Jeff Smith, 37, a pro-union activist who joined Nissan 13 vears apo. "We need het- ter benefits.

We're getting older and it's too late when you're already old." Smith said workers received up to $32 a month in retirement pay for each year of service, to a maximum of $960 a month, plus a 401 (k) plan to which Nissan contributes. General Motors' maximum pension benefit for hourly workers, by contrast, is about $2,200 a month. Nissan declined to discuss details of its pension plan. The Nissan plan requires worker co-payments for health insurance whereas UAW workers pay nothing, according to Sean McAlinden, a labor economist for the independent Center for Automotive Re; search in Ann Arbor, Mich. Using his own and published research, McAlinden calculates that Nissan needs 27.6 hours of labor to assemble the average vehicle in the United States.

Its labor costs including salary and benefits are about $35 an hour $966 per vehicle. In comparison, Ford needs about 40 hours to assemble an average vehicle; its assembly-plant labor costs come to $1,920, or roughly double Nissan's, according to McAlinden. If the Japanese are required to spend more in pension and health benefits, U.S. automakers hope their own labor-cost disadvantages of hundreds of dollars will vanish. The UAW still faces an uphill battle persuading Nissan's workers in Tennessee to vote for union representation.

Nissan says most ofits production workers now earn almost $23 an hour, well above the state's $13-an-hour average wage. Nissan workers rejected the only UAW petition that came to a vote, in 1989, by a 70-30 margin. In 1997 and 2000 the union left active campaigns without holding an election. Should the UAW win, it could be one of the union's most significant victories since the 1930s. Few doubt that the Japanese automakers have been undermining the viability of traditional U.S.

automakers and the UAW's labor base. In the 18 years since Nissan's plant opened, the overall market-share of U.S. automakers has declined to about 64 percent from 77 percent, while that of Asian manufacturers has climbed to 30 percent from about 19 percent. McAlinden sees UAW membership falling below 700,000 in two years from its current 740,000 and a peak of 1.5 million in 1978. Not that the once-proud UAW faces extinction yet.

Irrelevance is more like it, especially if the union fails to bring Nissan and other Japanese automakers into the fold. Doron Levin is a columnist far Bloomberg News. The opinions expressed are his own. in the face of mounting layoffs "Given the large number of job-loss announcements, the outlook from the consumer perspective is a little less rosy," said Richard Ya-marone, economist with Argus Research Corp. In July, spending on durables costly manufactured goods expected to last at least three years, such as cars and washing machines fell by 1.1 percent after a 2.3 percent increase the month before.

Spending on nondurables, such as clothes and foods, edged down by 0.1 percent in July for a second month in a row. Spending on services rose by 0.4 percent for the second straight month. Separately, the Labor Department said new claims for state unemployment insurance fell last week by 1,000 to 399,000. B'it the more stable four-week moving average of claims, which smooths out weekly fluctuations, rose by 12,500 to 393,000, suggesting that the labor market remains weak. While many economists are hopeful the country will be able to dodge a recession this year, they still worry that serious deterioration in the labor market might entice people to curtail spending and tip the economy into recession.

was president, the only president, appropriately enough, to be married in the White House. In 1888, just two years after Cleveland's nuptials, Sophia Carlisle open a small fashion business out of her North Side home. Not long after, she moved into space at 515 E. Ohio about one block away from Carlisle's current location. That site burned down around 1930, but the family relocated to a rented storeroom at 409 E.

Ohio St. Eventually, that building was bought, as were three adjoining ones, with the bridal salon's retail stores, alterations department, administrative offices and storerooms filling about 12,000 square feet. Some families have sent four generations of brides down the aisle in dresses from Carlisle's. People rises little 'SPENDING FROM PAGE C-1 "Even excluding tax rebates, in-! come gains remain strong, and that should help sustain consumer spending and keep the economy go- ing," said economist Joel Naroff of Naroff Economic Advisors. As the first round of tax-rebate checks went out near the end of the month, people probably opted to save them or pay off debt, rather than spend them, some economists i suggested.

"Rebate checks were only sent out late in the month, which no doubt skewed the data toward sav-' ings since there was not time to spend it all yet," said First Union chief economist David Orr. I Carlisle's plans CARLISLE FROM PAGE C-1 and photographers with engaged couples or others planning special events. About 18 months ago, Richetti de-; cided he could do better by group- ing even more things under one roof. He visited two similar one-stop centers in New York and then began talking with potential tenants. One that he really wanted was Carlisle's, an institution in the Pittsburgh wedding business.

In addi-' tion to having a well-known name, the store has customers who are usually in the early stages of plan move to new wedding center in Strip District Post-Gazette staff writer Teresa F. Lindeman cmtrumted to this report. bleClickDart. A portal is a Web site, such as Yahoo or Excite, that is positioned as an entrance to other sites on the Internet and which typically offers a variety of services, including e-mail, search functions and Web hosting. As market conditions have worsened over the past year and as online business has become turbulent, more newspapers have folded their portals into their news sites.

Last year, the San Jose Mercury News merged its traditional news site, Mercury Center, into its portal, bayarea.com, in an attempt to boost traffic. Pittsburghfirst.com discontinued its e-mail service in April because it was underused, and this week will transfer its directory of Web sites to Visitors to pittsburghfirst.com will now be greeted by a message that redirects them to ding center, leaving room for about 200 styles to be displayed. That's fewer than the existing store. Workman said less popular styles will be pulled sooner than in the past Carlisle's new neighbors should include businesses such as Steven Vance-Strolling Violins, Fenogliet-to's Wedding Cakes, Palate Partners and Elite Coach and Embassy Coach, among others. Richetti said merchants would share information on upcoming weddings.

Richetti hopes to improve on the concept of bridal trade shows, events that draw couples interested in researching the latest fashions as well as many potential vendors all in one place. He might not have as many vendors, but they'll easily be found year-round. Workman concedes that he has mixed emotions about the move from the North Side. For one thing, expect the remaining windows to feature a map detailing the route to the new site about 1.5 miles away. Anyone who needs alterations will still have to go to East Ohio Street for fittings.

All the recent development activity on the North Shore, especially the two new stadiums, has Workman convinced that good things are in store for the battered retail district. But he believes restaurants and stores tied more closely to those entertainment areas will be most at home there. Meanwhile, Richetti is keeping an eye on the heating and air-conditioning guys and the plumbers, and is looking for bride and groom mannequins he can put up on the roof so no one misses the place. Aracri's GREENTREE INN Pittsburgh's But-Kept Secret FRESH CRAB Stuffed with 95 Crabmeot I VEAL 0SS0 BUCO Happy Hour Frl. A Sat.

4pm-6pm 921-4601 1006 GREENTREE RD. (Gteen Ttee Exit, Parkway West Right On Greenltee Rd.) By Eve Modzelewski Post-Gazette Staff Writer Pittsburghfirst.com, a portal Web site launched last year by the Post-Gazette, merged this week with the paper's traditional news site, Low traffic on pittsburghfirst.com which provided a directory of national and local Web sites, free e-mail and other services rendered the portal unnecessary, said Debra Alward, the Post-Gazette's director of new media Instead of browsing through the portal, visitors tended to bypass the site to save themselves a few clicks and go directly to for local news, she said. Traffic on has reflected that trend. Over the past 30 days, more than 700,000 different people have visited as measured by Dou- who haven't been there in years still know where to find it. On the other hand, the store's floor space is carved out of disparate buildings and looks a bit worn.

"We really can't afford to become old-fashioned in the public's eyes," said Workman, whose mother, Betty, and sister, Jan Winner, also are active in the business. The bridal shop keeps its inventory in fashion, carrying dresses ranging from $600 on the lower end to $5,000 Vera Wang lines, with the average gown costing about $1,000. A moving sale has already begun, but the move won't come until early December, the slowest month of the year for Carlisle's. The bridal shop will take about 2,600 square feet in the new wed- 576 584 599 640 692 883 906 913 951 961 714 721 757 980 1008 1022 1196 1244 1248 1253 1265 1266 1270 1279 Bx Hand Qnh The Chase Manhattan Bank Room 234-North Bldg. Institutional Trust Securities Window 55 Water Slreel New York, NY 1(1(141 ning.

The dress often sets the tone for everything else. Blaine Workman, a fifth-generation participant in the family-operated Carlisle's, said the owners had known Richetti for several years. When Richetti pitched the idea of moving the bridal store out of the North Side, Workman said, he balked. "We've been here forever. There's no way I'd consider moving." But after pondering the proposal, the family eventually decided to say "yes." Carlisle's proudly traces its roots to the days when Grover Cleveland fli Hand Only The Chase Manhattan Bank Room 2.34-North Bldg.

Institutional Trust Securities Window 55 Water Street New York, NY 10041 eO NOTICE OF PARTIAL REDEMPTION TO THE HOLDERS OF PUBLIC PARKING AUTHORITY OF PITTSBURGH Project Revenue Bonds, Series A NOTICE IS HEREBY GIVEN that, pursuant to the applicable provisions of the governing documents of the above captioned bonds (the $375,000 principal amount of the Bonds will be redeemed on October 1, 2001, at the referenced Redemption Price, together with interest accrued to October 1, 2001. From and after October 1, 2001, interest on the Bonds shall cease to accrue. The following Bonds will be redeemed and paid upon presentation to the office(s) shown below. 'CUSIP Number: 725259EY7, 6.625, Due October 1. 2012 Redemption Price: 100.00, Total Amount Called: $375,000 Bearer Bonds called tile amount ofS5.m) each: 730 739 742 752 778 815 819 862 877 929 935 962 991 1058 1062 1098 1106 1113 1125 1133 1135 1145 1154 1179 1195 1251 1286 1289 1299 1330 1341 1345 1355 1378 1398 1430 1431 1445 1446 1453 1461 1498 1521 1523 1525 1566 1585 1587 1588 1629 1638 1683 1687 1691 1756 1764 -1797 1891 1938 1956 2000 2058 2061 2069 2071 2105 2122 2133 2138 2154 2164 2166 2168 2198 2266 Payment of the Bonds called for redemption will be made upon presentation and surrender of said Bonds, together with all coupons maturing on and after October 1, 2001, in the case of bearer bonds at the location shown below.

Called Bonds should be presented as follows: NOTICE OF PARTIAL REDEMPTION TO THE HOWERS OF ALLEGHENY COUNTY HOSPITAL DEVELOPMENT AUTHORFTY Allegheny County, Pennsylvania, Hospital Gross Revenue Bonds, Series 1973 (Harmarville Rehabilitation Center, Inc. Sublessee) NOTICE IS HEREBY GIVEN thai, pursuant to the applicable provisions of the governing documents of the above captioned bonus (ihc $350,000 principal amount of ihe Bonds will be redeemed on October 1. 20111, at ihc referenced Redemption Price, together with interest accrued lo October 1,20111. From and alter Oclobcr 2IKII. interest on the Bonds shall cease lo accrue.

The following Bonds will be redeemed and paid upon presentation lo (he ofllccfs) shown below. 'CUSIP No: 0172898EJ, 6.00, Due October 1, 2001, Redemption frier 100.00, Total Amount Called: $350,000 Brum Bimih called in the amount ill Stl()tl rath nil ilh prefix B': 303 759 349 776 357 414 496 500 520 575 787 791 807 841 855 871 1033 1037 1039 1107 1111 1113 1162 1184 1344 1346 1347 1348 1351 1373 1386 1396 1397 1450 1464 1468 1482 1509 1518 1561 1595 1596 1615 1641 1650 1651 Payment of the Bonds called lor redemption will be made upon presentation and surrender of said Bonds, wiih all coupon; malunng on and allcr October 2001. in Ihe case of bearer bonds at Ihc location shown below Called Bonds should he presented as follows: Express Deliver Qnh The Chase Manhattan Bank Institutional Trust Services 2001 Brvan Street, 9th Floor Dallas, Texas 75201 prst ClmsRtuislenJCtrtilieJ The Chase Manhattan Bank Institutional Trust Services P.O. Box 2320 Dallas, Texas 75221-2320 first CtinJRefistendCenmrd The Chase Manhattan Bank Institutional Trust Services PO Box 2321) Dallas. Texas 7522 1 -2320 Express Delivery Onh The Chase Manhattan Bank Institutional Trust Services 2(101 Bryan Slrccl, 9lh Floor Dallas.

Texas 75201 Pum ic Parking Authority of Pittsburgh By: Chase Manhattan Trust Company, National Association as Trustee or Agent Bondholder Communications: 800-275-2048 County Hikhtai Dkvki.opmknt AuTHiwrrY By: Chase Manhattan Tint Company, National Association as Trustee or Aeenl Bondholder Communications: 800.275-2048 www.chase.combondholder www.chase.combondholder Dated: August 31, 2001 IMPORTANT TAX INFORMATION Under the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (the paying agents making payments of interest or principal on municipal securities mav be obligated to withhold a 30.5 tax from remittance to individuals who have failed to furnish the paying agent with a valid taxpayer identification number. Owners of the Bonds who wish to avoid the imposition of the tax should submit certified taxpayer identification numbers when presenting the Bonds for payment. 'NOTE: flu Issuer and Chase stall not be responsible fir the use of the CUSIP numbers selected, nor is any representation made as to their correctness indicated in the notice or as printed on any Bond. They are included solely for ttie convenience of tlie holders. Daied: August 31, 2001 IMPORTANT TAX INFORMATION Under Ihc provisions of the Economic Growlh and Tax Reliel Reconciliation Act of 2001 (ihe paying agents making payments ol interest or principal on municipal sccunlies may be obligated to withhold a 30.5' lax from remittance lo individuals who have tailed lo turmsh Ihc paying agent wilh a valid taxpayer identification number.

Owners of ihe Bonds who wish to avoid the imposition of the uix should submit ccrtilicd taxpayer identification numbers when presenting ihe Bonds lor payment. N()TE: The Issuer and Chase shall not he resptmsible fiirthe use of the CUSIP numbers selected, nor is an representation made as to their correctness indicated in the nance or as printed on any Bund. They are included solely for the convenience oj the holders. i.