Detroit Free Press from Detroit, Michigan on September 10, 1994 · Page 12
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Detroit Free Press from Detroit, Michigan · Page 12

Detroit, Michigan
Issue Date:
Saturday, September 10, 1994
Page 12
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Call Business, 1-313-222-8765 Page 12A Saturday, Sept 10, 1994 THE DOW Investors fled cinr,nc:u YOUR Come back Tuesday for the latest information on mutual funds. 1 after a report ) on mgner-than-expected inflation. Detroit 4frcc Wxc BRIEFLY Flint-based Citizens to purchase 4 banks Great Lakes Bancorp dealt WHOLESALE PRICES Percent change in producer price index, . seasonally adjusted mm inn. firm toM 1.0V 0.5 0J s ill Great Lakes Bancorp Headquarters: Ann Arbor Chief executive: President Robert J. Delonis Employees: 1,085 Branches: 44, including 39 in Michigan, mostly in the Ann Arbor, Saginaw and Battle Creek areas Assets: $2.7 billion 1993 revenue: $218.2 million 1993 loss: $28.2 million TCF Financial Corp. Headquarters: Minneapolis Chief executive: Chairman William A. Cooper Employees: 3,500 Branches: 132, including 15 in Michigan, in Macomb and Oakland counties. ' Assets: $5 billion 1993 revenue: $477.2 million 1993 profit: $38 million SOURCE: Bloomberg Business News, company reports Headquarters will remain in Ann Arbor By Robert McNatt Free Press Business Writer Citizens Banking Corp., based in Flint, has bought four Michigan banks from Banc One Corp. for $115 million. The four banks, in East Lansing, Fenton, Sturgis and Ypsilanti, will add 21 branches with $680 million in assets to Citizens. The transaction, expected to close before the end of the year, increases Citizens' assets by 25 percent, to $3.5 billion from $2.7 billion. It brings the total number of branches to 93. It will also end the Michigan branch-banking presence of Columbus, Ohio-based Banc One, the eighth-largest U.S. bank. Citizens' stock closed Friday at $25.75 a share, down 50 cents. Banc One closed at $33,375, down 37.5 cents. "This is sipnifirant anrl it will take us some time to absorb the transaction," said John Ennest, Citizens vice-chairman and chief operating officer. He said Citizens will continue to look for other properties in the state. Though it has been an active acquirer, Citizens has traditionally focused on the Flint and Saginaw areas. The added branches will provide its first presence in the Lansing area and southwestern Michigan, and expand its operations in southeastern Michigan, where it last year bought National Bank of Royal Oak. A Banc One spokesperson said it decided the money realized from the sale, which had been in the works for about five months, could be better utilized in other areas. But he emphasized that Banc One did not rule out returning to branch banking in Michigan. -0.5 "1-WSONDJ FMAMJ J A Monthly change August July Finished goods 0.6 0.5 Intermediate 0.7 0.5 Crude goods 0.4 -0.9 Foods 0.7 0.5 Source: Bureau of Labor Statistics 1995. Great Lakes stockholders would get $28 in TCF stock for each Great Lakes share. "This is unlike the typical acquisition in the industry," said Great Lakes chief executive Robert Delonis. "We keep our management team, our local board of directors and our local identity. Customers should know that Great Lakes will still be here and that this will See GREAT LAKES, Page 13A BY ROBERT MCNATT Free Press Business Writer Ann Arbor-based Great Lakes Bancorp, which has struggled because of commercial lending setbacks, is being sold to TCF Financial Corp., a $5-billion multistate bank-holding company based in Minneapolis. The $195-million deal, which was announced Friday and is subject to shareholder and regulatory approval, is expected to close in the first quarter of wrwww w ss '"v"",",w"":f v "7'' -,flMI KRT Rising wholesale prices send the market down Inflation at the wholesale level is on the rise, touching off waves of selling on Wall Street. The Labor Department said wholesale prices in August rose 0.6 percent, more rapidly than they have in four years, as higher commodity prices pushed their way through the economy. The advance was broad-based, including higher prices for food, gasoline, autos and tobacco. It also is on top of a 0.5 percent advance in July that ended a string of benign wholesale reports. The news sent the Dow Jones industrial average down 33.65 points to close at 3,874.81. It was the biggest one-day decline since June 30 and put the best-known stock average barometer back to its levels of mid-August. S&Ls growing again Earnings at the nation's savings and loans surged 73 percent in the second quarter from the first, as the once-beleaguered thrift industry grew in size for the first time in more than five years. The Office of Thrift Supervision said the 1,612 private-sector thrifts earned $1.3 billion last quarter, up from $750 million in TURNS UP THE VOLUME Ford uses rebates on V4, 95 models to compete with Accord BY ALAN L. ADLER Free Press Automotive Writer Ford is going to war to keep the Taurus the best-selling car in the country for a third consecutive year. Honda says it isn't fighting. No matter, consumers already are the winners. Bragging rights are so im-'portant to Ford that it an-inounced a new round of incentives Friday on its midsize sedans, including 1995 models, i New customers can get up to $750 cash back or a 2.9-percent interest rate on a purchase, or $500 off on a two-year lease. Monthly payments on a two-year lease for a '95 Taurus GL would be $239, with $1,850 down. Customers who leased a Taurus two years ago can get a 1995 Taurus for $224 a month because of an extra incentive to keep them driving a Ford. Buying a 1995 Taurus over four years would cost $377 a month r j W-- . Urn ; ' VA ' .r;A'" y 9 . - H.I . v f w V , WILLIAM ARCHIEDetroit Free Press Economist Yukio Noguchi is also a best-selling author on reorganizing files. Economist says Japanese must adapt industries to stronger yen Yukio Noguchi, a leading Japanese economist, visited Michigan this week to meet with Japanese business leaders and Michigan academics. Noguchi, 54, a professor at Hitotsubashi University in Tokyo, discussed Asia's economies and trade relations with Free Press Business Editor Tom Walsh. Q What's the outlook for exchange rates? A, Many Japanese businessmen argue that the yen ($1 was worth 99 yen Friday) is overvalued. This may be true, but in the long run I think the yen will get stronger, and the Japanese industrial structure will have to adapt to that. I think a stronger yen itself is not a problem. Businessmen argue that because of the stronger yen, they have trouble exporting and are forced to move production sites overseas, and as a result employment opportunities are lost in Japan ... But I do not buy this argument. I believe we must adapt to this stronger yen, we must restructure so that higher productivity will be achieved, and this stronger yen must be felt by consumers in terms of lower prices. Q. Even with recession and a strong yen, unemploy- ment isn't much of a problem in Japan. Am Correct. Unemployment recently hit 3 percent, but that is still much lower than other countries. In the 21st Century, labor shortage will be the problem. In the year 2005, the labor force population will actually decline in Japan. This will be the first such experience for an Asian economy. PATRICIA BECKDelroit Free Press Ford Tauruses leased to individual customers two years ago are beginning to come back for resale. One way this happens is through auto auctions, open only to Ford dealers, who examine the returned car above. with $1,850 down. Ford increased those incentives it had been offering a $500 rebate or 6.9-percent financing because of better deals on the competing Accord and Toyota Camry. Both cars outsold Taurus in August, pushing Accord ahead in the race to be America's best selling car. "We're really not trying to escalate" that sales battle, said Ford Division general manager Ross Roberts. "We're simply making sure our dealers remain competitive." Honda, which is offering monthly payments of $189 to $239 a month on a two-year lease, took offense. It said in a news release that it doesn't "have a nickel of incentive money" on the Accord lease offer. Technically, that's true because consumers don't have the option of getting any cash back like they can under the Ford offer. The monthly payment offers, available only on 1994 Accords, are based on assumptions by GE Capital Corp. that a 1994 Accord will be worth See Taurus, page 13A Q: The battle between the Honda Accord and Ford Taurus to be the best-selling car in America is heating up now that Accord has regained the sales lead for the first time since November 1992. The customer is the winner with offers like these: 1994 Honda Accord: Two-year lease with monthly payments of $189 to $239 a month with $1,850 down. No cash rebates or discounted annual percentage rates offered. 1994 Ford Taurus Mercury Sable: 2.9 percent annual percentage rate financing plus $750 cash rebate on purchase. Cash rebate of $500 on a two-year lease, roughly $239 a month with $1,850 down; $207 a month with $1,850 down for lessees returning a Taurus or Sable leased in September-December 1992. 1995 Ford TaurusMercury Sable: 2.9 percent annual percentage rate financing plus $500 cash rebate on a purchase. Cash rebate of $500 on a two-year lease, roughly $239 a month with $1,850 down; $224 a month with $1,850 down for lessees returning a Taurus or Sable leased in September-December J992. the first quarter. Second-quarter profits matched those of a year earlier. It was the 14th straight profitable quarter. It reflected a drop in troubled loans and the wide spread between what S&Ls earn from loans and what they pay out to depositors. Agitated engineer A former Whirlpool Corp. engineer has been indicted for allegedly mailing secret information on the company's next generation of washing machines to rival appliance makers. Jeffrey Lynn, 53, was a lead engineer at the Benton Harbor appliance maker from March 1990 until July 1993. Federal prosecutors say he mailed company information to Maytag, General Electric, Electrolux and the U.S. Department of Energy. Officials would not discuss a possible motive. Police are looking for Lynn, whose whereabouts are unknown. Pesticide plant sold Union Carbide sold its stake in the Indian pesticide plant that leaked lethal gas 10 years ago and set aside proceeds for the thousands of victims of the worst industrial accident in history. Union Carbide's majority stake in the Bhopal plant and other assets were bought by a Calcutta-based company for about $90 million. More than 4,000 people were killed when toxic methyl isocya-nate gas leaked from the plant on the night of Dec. 3, 1984, poisoning a huge shanty town nearby. Acura raises prices Acura, Honda's luxury car division, will raise prices on '95 Legend sedans and coupes an average of 3 percent over 1994 models, an increase of $1,131 per car. Integra coupe and sedan prices will rise 3.6 percent, an average of $635 per car. Lawsuit on the line The telephone industry will challenge a 10-year-old law that forbids telephone companies from providing television shows and movies to its customers. The lawsuit will be filed in federal court Monday on behalf of the 1,056-member United States Telephone Association. It will argue that the provision violates the pkme companies ?irst Amendmdfi rights. Q: How do you see the future of other Asian economies? Joint ads about to end for Contour, Mystique 0: n Am We have to distinguish three groups. First, the so-called NIE's (newly industrial economies) Korea, Taiwan, Hong Kong, Singapore. These have already shifted industrial structure from labor-intensive light industry to heavy industry, so they are going directly after Japan. The second group is the ASEAN (Association of Southeast Asian Nations) countries Thailand, Malaysia, Indonesia. These are still in the stage of labor-intensive industry, and their growth will continue. The third is mainland China. Because of their enormous size, what they are going to be in the future will have a huge impact on Japan, and the world economy as a whole. Some people have fears about the political situation in China, but I think there will be almost no risk there. This is my personal feeling: Once people know the meaning of growth, the prospect of becoming rich in the future, I don't think there will be a reversal. See JAPAN, Page 13. Ford also is placing 22 million eight-page ' inserts with attached reply cards in national publications. People who send back the card will receive a video about the Contour and a mini-brochure. Ford then figures it has a ' potential customer on the line, and a dealer may call to offer a test drive. The budget for the ads reportedly is the " biggest in Ford history, $ 1 1 0 million for Ford and Lincoln-Mercury divisions. That exceeds , the estimated $100 million Ford spent to ', launch the original Ford Taurus and Mercury Sable in 1985. But overall, Ford Division advertising manager John Vanderzee said, the division's ad budget is roughly the same as last year. BY ALAN L. ADLER Free Press Automotive Writer Ford is breaking with tradition by advertising its new midsize Ford Contour and Mercury Mystique sedans together, but the siblings will go their separate ways beginning Monday. The Ford Division previewed its television spots Friday, all built around the theme "Goal: The world car for the 21st Century." But the ads don't go into what that means, focusing instead on Contour's safety, ride and handling and low-maintenance engine option. Ford may be counting on the current TV ads, which end with the names of both cars, to explain that the cars were jointly designed in Contour ads will saturate prime-time TV. Europe and the United States "and are being sold in 75 countries. The Contour TV spots will saturate top-rated and new prime-time shows, such as "Home Improvement." Si1

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