Detroit Free Press from Detroit, Michigan • Page 34

This morning's business briefing; Tuesday, August 4, IS81 Dow-Jones Industrials 946.25,-6.09 Prevalant prime rate 2012 Fixed-rate mortgage (20 down) 17 26-week certificate rate 1 5.82 212-year certificates (highest rate) 12 Inflation rate (national) 10.7 Inflation rate (Detroit) 11.3 Michigan unemployment rate 10.6 National unemployment rate 7.3 Auto layoffs (indefinite only) 152,680 'MUTUAL FUNDS 7D STOCKS 7-1 OP NYSE 8D OPTIONS 9D DETROIT FREE PRESS 6D new cash rebates rvsier J1 In ffer 1 Dollar at highest in nearly 10 years it's the only U.S. automaker whose sales are higher than last year's. For the Jan. 1-July 20 period, Chrysler is up 22.9 percent, while GM is down five percent and Ford is down 4.3 percent. There's been no word from the smaller U.S.

-based companies, American Motors Corp. and Volkswagen of America, as to whether they also intend to offer customer incentives. AMC's sales are down five percent for the year through July 20, while VW of America's sales are down 13.3 percent. The entire domestic industry's sales are 2.4 percent below the peri i The dollar soared to its highest level in nearly 10 years, setting records against the French franc and Italian lira and By STUART ELLIOTT Free Press Automotive Writer Chrysler Corp. Monday became the third of the Big Three to offer incentives to customers to perk up car sales.

Chrysler's program, through participating dealers, features cash rebates of $300 to $1,000 on models ranging from Mitsubishi imports sold under Plymouth and Dodge nameplates to the luxury Chrysler Imperial. The program covers 1981 models sold and delivered from last Saturday through Aug. 31. IN ONCE AGAIN offering incen rates July 27, and Ford Motor which Friday began offering a variety of incentives. Of the three, Chrysler's program is most like the familiar "buy a car, get a check" campaigns of the past.

The company's "experience has shown the consumer understands and responds to an uncomplicated rebate program that puts a specific amount of cash directly into his pocket," said John Naughton, Chrysler's executive vice-president of sales and marketing. Dealers will be contributing to the rebates, a company spokesman said, but no details are yet available. This could mean some dealers may not be willing to bargain as much in making deals or will deduct from the value of a trade-in. CHRYSLER WILL rebate $300 to buyers of the Plymouth Horizon and Horizon TC3, Dodge Omni and Omni 024 (excluding Miser versions) and these imports: Plymouth Arrow, Sapporo and Champ and Dodge Colt, Challenger and D50 pickup. Buyers of the Plymouth Reliant and Dodge Aries K-cars will get $500 rebates, as will buyers of domestically built two-wheel-drive Dodge Ram pickups.

There'll be $700 rebates for buyers of domestically built four-wheel-drive Dodge Ram pickups and Plymouth Trail Duster and Dodge Ramcharger sport utility models. The $1,000 rebate is for buyers of the Chrysler Imperial. The cars not covered under the program are mostly larger, rear-wheel-drive models such as Dodge Diplomat and St. Regis, Chrysler Newport and New Yorker and vans and trucks. No reason was given for their exclusion.

The GM incentive program involves a 13.8 percent interest rate on new cars financed through General Motors Acceptance Corp. The Ford program is a "dealer's choice," giving participating dealers specific sums that can be given to customers as rebates, used to lower interest rates or as a credit toward a down payment. THERE WAS SOME question whether Chrysler would decide to rejoin the ranks on incentives, since closing in on a record against the Canadian dollar. 'I As the U.S. currency surged, gold fell to its lowest price in 20 months as Investors sought to put their funds into dollars, I with bullion ending the trading day in New York at $390 a troy ounce, down $14 from Friday.

i The dollar began the day by climbing to 243.65 Japanese yen in Tokyo from Friday's late rate of 239.75 yen, reaching Jits highest level since April 1980. The dollar continued to od of Jan. 1-July 20, 1980. Figures for the July 21-31 period are to be climb in later trading in Europe and the United States. The last time the dollar was so strong was in late tives, Chrysler joined General Mo reported Tuesday.

They are expect tors which reduced financing ed to trail year-ago levels. cording to Morgan Guaranty Trust Co. in New York, which measures the value of the dollar based on the volume of United States' trade with 15 other countries. bssilcingfinszsca -Smallest bank posts record Wliy weak Burroughs took a weaker partner First Independence National Bank of Detroit, the state's only minority-owned bank and Detroit's smallest bank, had record earnings for the first six months of this year. Net Income was $240,998, or $1 per common share, compared with a net loss of $130,711 in the same period last menthal stressed that Memorex will be operated as a free-standing subsidiary.

Each firm will continue to develop its primary market, they say. year, the bank reported. In addition, total assets increased 8.7 percent to $48.9 million as of June 30, 1981, from $44.7 million a year earlier. The bank, which ran into financial trouble in 1978, named a new president, Charles Allen, in April. Allen attributed the By MONTE I.

TRAMMER Free Press Business Writer In acquiring the financially ailing Me-morex Burroughs Corp. of Detroit will improve its own competitive position, increase its own number of sales outlets and more rapidly develop high capacity memory devices, Jerome S. Jacobson, vice-chairman of Burroughs said Monday. Burroughs Chairman W. Michael Blu- Memorex "would probably go belly up if somebody didn't take them over," said Robert Eldred, chief analyst for First of Michigan Corp.

bank improvement to higher interest earned on invest Eldred said Memorex, because of its rising costs and debt, has been seen as a ments, new Investments and better cash management. Joint automatic tellers risky investment. A national investment service, he said, described it last month as "struggling with adversity," and "facing a bleak" 1981. He callled the acquisiton a "In this game it's mainframe and peripherals and this acquisition is directly in line with our (comeback) strategy." Jerome S. Jacobson, vice-chairman of Burroughs.

4 I menthal said he expects Memorex to make a "near-term contribution to our profits" and to be' of long-term strategic value." Jacobson said that in deciding to acquire Me good long-term move. Although Memorex is best known for its Customers of Manufacturers National Corp. banks and Michigan National Corp. banks will now be able to use either company's automatic teller machines, as the two banks Monday became the first to join a system that will link most banks' teller machines within a few years. Manufacturers and Michigan National customers who highly-advertised home audio and video recording tapes, it derives less than 10 percent of its revenue from the consumer morex, a Santa Clara Calif manufac market, said Burkhardt.

turer of computer components, Burroughs enlarged upon what had started as discussion of a joint venture. It produces computer peripherals printers, memory disks, microfilm equipment and the like some of which are THE DEAL WAS agreed upon Saturday resold under the labels of such firms as IBM. have plastic cards encoded with magnetic tape can now use any of 500 terminals across the state to withdraw cash, make deposits and withdrawals, transfer money between savings and checking accounts, or get cash advances from a credit card or credit line. The system, called Magic Line, is run by MAC-LINK, an organization of 129 banks, credit unions and savings and loans associations. About 50 or 60 institutions are supposed to Join the system by the end of the year.

Within two years MAC-LINK will have more than 1,000 terminals throughout the state when the Memorex board voted unanimously to accept Burroughs' $105 million Memorex, which derives half its sales offer and to reject a $90 million offer from Storage Technology Corp. of Louisville, Colo. from overseas operations, also has suffered from currency fluctuations abroad and rising interest rates at home. The currency rate changes cost money and the interest Burroughs will acquire the 7.3 million rates raise its own borrowing costs while reducing the ability of potential customers outstanding shares of Memorex for $14.50 a share. The deal, expected to be Completed later this year, requires approval by Memorex shareholders and will require that Memorex restructure its long-term debt.

to borrow in order to buy or lease equip ina auio inausny ment. THE CURRENCY problem also is affect The acquisition will join Memorex, the 10th largest of the nation's top 100 data ing the ability of Burroughs to turn itself THE TRADE JOURNAL Automotive News said 104 domestic new car dealerships went out of business in the second quarter of 1981, compared with 672 dealers in the around as rapidly as executives predicted ing systems, won a $50 million contract to install an air traffic control system in Argentina. ANY BENEFIT for Burroughs from the Memorex acquisition is expected to be less dramatic in the short run. But it will allow Burroughs and Memorex to end some of their duplicative effort in developing high-speed, high-capacity memory devices. It also will enable both firms to increase sales outlets.

Some Burroughs products are expected to be offered by Memorex and Burroughs, in turn, will offer some Memorex products to its users, the company said in a statement. Jacobson said the economies of scale, and the possibility of additional outlets for Burroughs products, might lead to a net increase in production jobs in the Detroit area. earlier this year. same period last year. A total of 325 domestic car agencies processing machine manufacturers with giant Burroughs.

"The result will be to move us both well into the top five," said James Burkhardt, a Memorex ings below the level of comparable periods last year. Memorex has lost $31.5 million in the first half of 1981. "In this game it's mainframe and peripherals and this acquisition is directly in line with our (comeback) strategy," said Jacobson. Burroughs is manufactures computers and its own accessory equipment, which is becoming increasingly important in the computer industry. That is the area in which Memorex excells, industry analysts say.

As part of an attempt to turn the Detroit-based computer maker around, the Burroughs board last year hired Blumenthal, former U.S. Treasury secretary and ex-chairman of Bendix Corp, to be chief executive officer. Shortly after taking control in September, Blumenthal acquired Systems Development Corp. of Santa Monica, Cal. Last week that firm, experienced in producing large military and scientific data process Blumenthal predicted earlier this year i -closed their doors in the first half of 1981, including 28 by that in the second half of 1981, the firm would report earnings above those of the American Motors 41 by Chrysler 135 by General Motors Corp.

and 141 at Ford Motor Co. That totals 345. A same period last year. change in the number of dual dealerships those handling THE MOVE CAUSED surprise in invest That prediction has been revised, said ment circles because while both firms suffer depressed earnings, Burroughs is on the Jacobson, because of the effect foreign exchange rates are having on international sales. road back emphasizing sales, service and management restructuring while Me "Generally speaking, analysts are their expectations across the indus morex faces potentially fatal rising costs and mounting debt.

try," he said, while declining to predict third and fourth quarter earnings. MEANWHILE, Jacobson and Blu- Burroughs has reported quarterly earn- Mobil boosts Phibro is buying Salomon firm two car makes reduced overall losses to 325. GENERAL MOTORS CORP. declared a dividend of 60 cents per share of common stock in the third quarter. The dividend is payable Sept.

30 to stockholders of record Aug. 13 and continues the rate of dividends paid since the second quarter of 1980. The third-quarter payment bring's GM's dividends for the first nine months of 1981 to $1.80 per share, against $2.35 per share for the first three quarters of 1980. GM also declared dividends of $1.25 per share of preferred stock and 94 cents on preferred stock. The preferred stock dividends are payable Nov.

2 to shareholders of record Oct. 5. 1 THE FIVE U.S. AUTOMAKERS turned out 517,825 cars In July, 25 percent more than in the same month last year, according to company reports. Domestic manufacturers built 415,300 cars in July 1980.

For the first six months of the year, production stands at 4,090,548 cars, up 6.7 percent from 3,832,850 cars in the same period a year ago. The July production was: General Motors 340,408 cars, up from 315,501 a year ago; Ford Motor 75,637 cars, up from Chrysler 71,760 cars, up from American Motors 13,732 cars, up from and Volkswagen of America, 16,284 cars, down from 20,273. Conoco bid again NEW YORK (AP) Mobil Corp. raised its bid for Free Press Wire Services Conoco Inc. to $8.6 billion Monday and argued it was Salomon Brothers, one of Wall Street's last partnership empires, will be taken over by Phibro a large commodity-trading company, in a $250 million merger plan, unlikely anti-trust problems will stop it from taking over the nation's ninth-largest oil company.

Mobil, the No. 2 oil company, already had the highest the two firms announced Monday. The acquisition, set for Oct. 1 would become the third big merger in the securities industry this year, prompted in part offer on the table for Conoco, but the Justice Department has blocked it from buying any shares and held open the possibility it will file suit to block a Mobil-Conoco merger. To win the largest corporate bidding war in history, 1 WS by expectations of increasingly wide-open competition in It the financial world.

Mobil must persuade enough of the shareholders who have tlso msrhsts This spring, Prudential Insurance Company of America offered shares to Du Pont Co. to withdraw them before the deadline at midnight Tuesday. acquired Bache Group Wall Street sixth-largest firm, and American Express Co. bought Shearson Loeb Rhoades DU PONT, THE LARGEST chemical company in the country, already has been offered more than half the shares of Conoco and plans to begin buying them Wednesday, pending final anti-trust approval. The third bidder, Seagram Co.

began buying Conoco shares for $92 each on Saturday and has accumulated about Ralph E. Bailey, left is chairman of Conoco, the firm sought in furious bidding by three others, including Du Pont, the chemical giant, whose chairman is Edward G. Jefferson, right. Conoco; is offering $95 a share for 45 percent of the stock and 1.7 Du Pont shares now worth about $77 for each remaining share, or a total of $7.3 billion. Du Pont got tentative Justice Department clearance for the deal last week and said it expects to sign a consent decree by Tuesday to solve the department's only concern, a joint petrochemical venture between Conoco and Monsanto a major Du Pont competitor.

But the department asked more questions of Mobil, said Mobil could not buy shares until 10 days after adequate answers were submitted, and said no decision had been made on whether such a deal would violate the law. 18 percent of the stock. Conoco is prized for its large reserves of coal, oil and the second-largest investment house. SALOMON BROTHERS, which is among the top five brokerage houses in investment banking, has long been the acknowledged leader in bond trading operations. It is not as well known outside the business community as many of its competitors because it does not deal directly with the public.

But the 71-year-old firm is known for its aggressiveness and profitability. Phibro, a publicly owned company whose shares are traded on the New York Stock Exchange, will buy Salomon, the largest firm in the investment business still operated as a partnership, from its 62 partners for Phibro debentures that can be converted into common stock. TREASURY BILL YIELDS rose for the fourth time in five weeks at the government's weekly auction. Six-month T-bills sold for an average of 15.571 percent. Three month bills sold for an average of 15.674 percent.

Interest rates for "Small Savers" savings certificates available in denominations as small as $500 climbed to an unprecedented 15.8 percent at savings and loans, and 15.55 percent at commercial banks. The rates are the highest since May 22. BOND PRICES plunged to record lows amid concern over heavy borrowing of the U.S. Treasury and the Federal Reserve Board's money stance. The Treasury's 13.875 percent, 30-year bonds an indicator of trends in long-term interest rates plunged $22.50 to $975 for each $1,000 in face value on Lanston's quotation sheets, a record low.

Yields on the issue reached a record-high 14.24 percent. natural gas. Any takeover of Conoco will dwarf the $3.6 billion acquisition of Belridge Oil Co. by Shell Oil Co. in 1979, which had been the largest merger ever.

Mobil raised its offer to $115 a share, from $105, for 51 percent of the Conoco shares and said it will offer securities valued at $85 for each remaining share. DU PONT, WHICH HAS signed a merger agreement with Detroit bank branch or representative office in Mexico, some do business there. But Turner said: "We don't consider the neighbor down the street competition (in Mexico) any more than someone from Arizona." SOFINSA hopes to win business from Mexican companies as well as from American companies doing business there, Turner said. Thomas P. Williams, an assistant vice-president in international banking department, will move to Mexico City to become a SOFINSA director.

company, which is scheduled to begin operation in October. Charles Turner, a senior vice-president in charge of international banking, said Mexico is one of the four most important countries of the 45 in which the bank does business. "It looks pretty promising," he said. "The economy is pretty strong, and there is good opportunity to develop new things." Although no other Michigan bank has a to open branch By KITTY MCKINSEY Free Press Business Writer Detroit Bank Trust, the third largest bank in the city, is opening a branch in Mexico City to lease equipment and make loans to large- and medium-size companies there. The Mexican financing company, called SOFINSA, is a joint venture between and Printaform S.A., a leading Mexican supplier of electronic office equipment and business forms.

Under Mexican law, can own only 49 percent of the new financing THE PHILADELPHIA BULLETIN, one of America's oldest and largest daily newspapers, said it would cease publication Aug. 16 unless its employes accept wage cuts and other concessions totaling nearly $6.3 million annually. The paper said it lost $10.3 million in the first six months of the year. in Mexico City Compiled by ALAN S. LENHOFF nlliiifci iil4 ilMPiM i mlffl "TTF "11 iftHi i vKkw0k iff ii ii rf i iWlnlii( HI irf gm nl i4iiOT if! 0k iftiidift tM tfih, 0k Wi 0 0t ff MM jit lAnirtL A 0k 0, rffcniA 1 Jfti Jfli flftmrt Oirt iWiH Anli 41 iirtn 0, 0 lfniilH ilA rffVi1 Wli lTli fl 0k A tlfcin.