Detroit Free Press from Detroit, Michigan • Page 41

This morning's business briefing: Wednesday, July 29, 1081 Dow-Jones Industrials 939.40,-6.47 Prevalant prime rate 2012 Fixed-rate mortgage (20 down) 17 26-week certificate rate 15.04 212-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 10P STOCKS 10-1 2D NYSE 11D PETROIT FREE PRESS 9D OPTIONS 12D Souvenir sales -t V- VI too striking out, yL By BARRY ROHAN Free Press Business Writer As the baseball strike drags on, retail sales of look-alike major-league jerseys, caps, batting helmets and other souvenir merchandise sold primarily to young boys has fallen into a deep slump. Many retailers report sales drops of 30 to 50 percent in big league "replica" merchandise over the past month. Some say the junior set already has turned to the upcoming football season and will not be easily won back even if the strike were to end soon. None of retailers could estimate the size of the lost business locally or nationally, except to note that total sales through the season run into many millions of dollars. Since the merchandise is sold in thousands of stores in large and small cities throughout the country, the sales also are believed to dwarf those of similar goods sold at big-city Court asked to block Edison securities sale Michigan Attorney General Frank Keiley and the Michigan Citizens Lobby, appealing a July 7 decision by the Public Service Commission, asked the state Court of Appeals to block the sale of $1.9 billion in Detroit Edison securities.

The money would be used to finance construction of three power plants, including the Fermi II nuclear plant near Monroe. If successful, the action would block Fermi and Edison's two coal-powered Belle River power plants. All the facilities are to be completed by 1985 at a total cost of $3.8 billion. The Original combined estimate was $629 million. The consumer group said Edison is not monitoring cost overruns properly, and that the plants aren't necessary for Edison to meet projected needs.

Those two factors will saddle Edison customers with unnecessary rate increases, the group charged. "This additional action is unwarranted and could cost Detroit Edison customers money if it continues delays in the 981 financing program," said an Edison spokesman. In a related matter, Edison and 1 0 other utilities asked the U.S. Supreme Court to reconsider its July 2 decision denying the utilities the right to challenge the amount of severence tax Montana charges for the removal of its coal, Severence taxes are imposed by states with energy resources on companies who remove those resources. The utilities say the severence taxes allow energy-rich states to unjustly gouge states like Michigan, which imports much of its energy resources.

Monte I. Trammer Is there ground for a lawsuit? sports stadiums in the best of times. "RIGHT NOW ONLY the true diehard baseball fan is hanging in there," said Dennis Jackson, manager of The Old Ballpark, a sports memorabilia store in Livonia. "In the past three weeks we've noticed a lot of the kids are getting into football items." The store, which carries a wide variety of replica merchandise in several sports, reports sales of major-league baseball pennants, batting helmets, shirts and other items have fallen by about one third in recent weeks. The kids may have become merely indifferent to baseball, but Jackson says many parents seem downright antagonistic.

"The economy isn't all that well and there's still a lot of people out of work," he said. "There's no way these people are going to understand a guy like Steve Kemp (Tiger left fielder) making all that money and for some reason wanting a little more. "We've had kids come in here and say things like, 'Hey, look at all that Detroit Tigers and the parents say something like, 'Who cares about Sales of baseball cards among the younger set also have fallen off substantially in recent weeks. Youngsters have begun buying football cards instead about six weeks earlier than usual, Jackson said. THE STORY IS SIMILAR at Circus World Toy Stores, of Taylor, which operates 127 stores in 22 states, including 18 in Michigan.

Company President Sid Rubin says sales of major-league replica caps and plastic batting helmets have fallen by half over the past month or so. "It's almost like the only ones who still care about the baseball strike are the adults," he said. "The children have found other means of entertainment. My guess is that the baseball mood among the children is almost evaporated and the season is probably already a washout." Acme Sporting Goods which has outlets in Birmingham, Roseville, Livonia and Rochester, also says sales of replica merchandise have fallen about 50 percent and the company has begun marking it down. "We really got into a lot of replica this year, made a special department of it in our stores," said Acme Sporting Goods President Charles Roover.

"Nobody expected the strike to go on this long." James Pike, manager of the Acme Sporting Goods store in Birmingham, said he marked down the major-league jerseys from $13.95 to $10.95 after their sales had come to "a standstill" two or three weeks ago. "We noticed the dropoff in sales right the auto industry KiimrSmmtit i iiniii i Sfcn 'in 1 Juaal jUS Free Press Photo by IRA ROSENBERG Baseball items are moving so slowly that Stuart Weiler of Herman's in the Fairlane Center suggests people wear more than one cap. i FOUR LEADING TIRE manufacturers Goodyear, Firestone, Uniroyal and General Tire announced price increases ranging from 3.5 to five percent. FORD OF CANADA earned $24.2 million in the second quarter, making the quarter its most profitable in the last two years. NISSAN WILL BUILD a new factory in Britain.

Production is expected to begin in 1984. By the Associated Press Eighteen members of the Tiger Stadium ground crew are threatening to sue the striking Major League Players Association for "interference of a business relationship." The workers are not part of the Tigers' regular salaried work force, and their jobs are based on the number of games they work. They don't qualify for unemployment compensation under Michigan law because of a statute that prohibits payment "if total or partial unemployment is due to a labor dispute which was, or is, in progress in a department or unit, or group of workers in the same establishment." "We have some misgivings because it's one union against another," John Day, steward for Local 79 Service Employees' International Union said. "But a lot of us are going down the tube without a salary. There Is nothing else we can do.

This has gone on long enough." Each of the 18 workers has lost approximately $6,000 in wages during the baseball strike. A lawyer representing the workers said the suit would ask for $108,000 in lost wages, plus any future damages caused by the strike. corporations after the strike started," he said. Echoing the experience of many other sporting goods stores, he said, conventional baseball-team clothing and equipment purchased for play continues strong. Michael McGrath, manager of Herman's World of Sporting Goods store at Fairlane Shopping Center, Dearborn, says sales of replica baseball shirts and hats are down 40 to 60 percent and a big hunk of the best part of the season has already been lost.

"Right about this time it becomes more clear which teams are going to be the contenders," he said. "Normally the two top teams In each division are your best sellers. But if there's no play, there's nobody out there buying the league leaders' jerseys." THE SALES SLUMP at the retail level has meanwhile begun backing up to the suppliers. Although typically suppliers make their biggest deliveries at the start of the season, they are being affected by a sharp falloff in re orders and are expected to feel the impact of the unsold merchandise next year as well. One of them, Rudy DiPietro, president of Apsco Sports Enterprises of Brooklyn, N.Y., is plenty mad about it.

"We're hurting because the layman a guy like you and me who comes home at the end of the week with say $300 or $350 is Irritated with a player being paid upwards of $80,000 a year who's got the nerve to go on strike and deprive him of a little pleasure on the weekend," he said. DiPietro, whose firm supplies baseball hats and miniature souvenir bats to sports-stadium concessionaires (including Tiger Stadium) and retailers, including Herman's sporting goods and J.C. Penney stores, says the retail-store portion of the business is off 20 percent. "I don't know how big this industry is," he said. "We're only a tiny end of it You're talking about millions of dollars being lost to retail business because of this strike." Conoco battle goes on Chemical giant Du Pont Co.

said it has been offered a majority of the shares in Conoco the subject of a multibillion-dollar bidding war. But the battle for control of Conoco, the nation's ninth-largest oil company, continued. Du Pont's announcement concerned snares offered through Monday night, many of them before Mobil Corp. raised its bid for Mobil to $8.2 billion. Shareholders who Offered shares to Du Pont can withdraw them through Aug.

4. Seagram Co. the third contestant in the bidding battle, again criticized Conoco management and contrasted its "firm cash offer" to the "maybe, conditional offers of Du Pont and Mobil." 1 Seagram, the Canadian distiller, is offering $92 a share for 51 percent of Conoco's stock. That is the lowest cash price of any of the offers, but Seagram said it is making arrangements to start paying for shares on Saturday. Conoco noted that Seagram's offer has conditions that would allow it to drop or delay its bid, and urged stockholders hot to act hastily.

Mobil is offering $105 a share in cash for 51 percent of Dealers applaud lower GM interest rates By STUART ELLIOTT Free Press Automotive Writer Will General Motors Corp. suc ceed in its latest attempt to move its slow-moving cars? Conoco and securities it says will be worth $85 a share for the remainder. But the date of purchase is unclear because Mobil says it will wait for anti-trust clearance. The response Tuesday from in Du Pont is offering $95 a share for 40 percent of the shares dustry analysts and some of GM's a figure its board is expected to raise to 45 percent 1,000 dealers was a cautious Wednesday and plans to acquire remaining shares for 1.7 Du Pont shares, now worth about $77. yes." For the most part they ap Du Pont said that about 43.6 million shares had been plauded the offer, announced Monday, of new-car loans through Aug.

31 at a 13.8 percent interest rate, down from the prevailing rate of the second quarter," when the company earned $514.6 million, its highest profits in two years. This is "really GM's way of preserving its long-term profitability," Jouppi said, so it can finance its ambitious capital improvements. THE CUT-RATE loans also directly address what many think is a major reason for sluggish auto sales: high interest rates. "The way the media really emphasized the prime rate lately, people think they have to get car loans at 21 percent," said Rosario Cris-cuolo, general sales manager of Art Moran Pontiac-GMC in Southfield. "That's not true.

This really will give us a shot in the arm." GM has been sponsoring an advertising campaign stressing that the prime rate is almost always higher than auto loan rates, which nationally average 16.5 percent-17 percent (16.5 percent in Michigan). But the ads don't mention specific numbers. Monday's move gives shoppers a figure to focus on, and it's easy to see 13.8 percent is less than 20 percent or 21 percent. "It's a for-real deal in today's money market for cars," said Dreisbach. ONE FACTOR that could well determine the program's success is shoppers' perceptions of how for-real the deal is.

GM estimates a buyer would save $550 on an average 45-month finance contract of $7,593, or $12.22 a month out of monthly payments of approximately $169. The deal comes at a price to participating dealers. While it's in effect, GM will cut by two-thirds payments to dealers of the "finance offered to it by the close of business Monday. That would give It a majority of the 86 million shares outstanding, even without exercising its option to buy another 15.9 million reserve" a percentage of the loan they get for placing it through GMAC and completing the paperwork. For instance, on an $8,000 loan at 16.5 percent, one dealer said, he would get from GM a finance reserve of $196.80.

Under the new program, he'll get a third of that, approximately $66. But "I'll gladly trade ($130) in income for a $200 expense," the dealer said, referring to the monthly cost of carrying an unsold car at current high Interest rates. And when dealers finance the cars they buy from the auto companies, they often pay the banks prime rate or above. It's conceivable, however, that one way dealers could make up some of that loss is by bargaining harder with customers on the deals they write. novs analysis follows weeks of rumors GM would reinstate rebates to battle a persistent sales slump.

Deliveries for the year to date, as well as for the first 20 days of July, are down five percent from 1980. The rumors affected sales, some dealers believe. "A lot of our customers were coming in and saying, 'We know there'll be rebates, so we'll wait for that, said Scott Dreisbach, president of Dreisbach Buick in Pontiac. "At least this will get it off dead center." GM won't say why it chose lower loan rates over rebates. But auto analyst Arvid Jouppi, senior vice-president of John Muir notes that the interest-rate plan lets GM executives "preserve the price structure that served them nicely in shares directly from Conoco.

CHEVRON USA AND THE DEPARTMENT of Energy 16.5-17 percent. "I don't know if it's going to move the market, but it's going to help," said Russell Shelton, vice-president of Shelton Pontiac-Buick in Rochester. "It gives us a little surge that's much needed," said Bill Kendall, new-car sales manager at Gene Merollis Chevrolet in Garden City. THE INTEREST rate discount reached an settlement, the second-largest in a federal oil pricing complaint. Most of the issues in the settlement involved alleged pricing and cost allocation violations under government petroleum pricing regulations in force between 1973 and Jan.

28, 1981. The department had accused Chevron of violations totaling $417 million, some of them in overcharges and others in accounting irregularities. Only the department's $100-million agreement with Amoco, a unit of Standard Oil Co. of Indiana, was larger. TWA HAS CALLED for a freeze on wages and benefits through 1982 for its 32,000 employes.

"The unavoidable fact The truck market's riding a roller coaster, too we face is that our current operating costs are killing us a situation made worse daily by the serious and growing threat of the new, low-cost airlines," said Edward Meyer, president of the airline unit of Trans World Corp. Union leaders made no T1 I By ALAN S. LENHOFF Free Press Automotive Writer TRAVERSE CITY Ford Motor strategy to restore big profits to the gutted truck business sounds deceptively simple: Just make the big trucks bigger and the small trucks smaller. But as domestic automakers look to their truck divisions for the markets Sleepy stocks drift down The stock market drifted lower in quiet trading. The Dow help as they climb back from record losses, they will find there are no easy ways to success in today's volatile truck market, James Capolongo, Ford vice-president for truck operations, said Tuesday.

In an address to a University of Jones average of 30 industrials, up 17.31 points Friday and Monday, fell 6.47 to 939.40. I New York Stock Exchange volume remained sluggish at The tallspin has had a devestating effect on the automakers' balance sheets. Pick-up trucks are the best-selling vehicles for both Ford and Chevrolet. And in good years Ford trucks have contributed a $1 billion profit to the company, Capolongo said. The softest spot in the truck market is for medium-duty trucks those between the 18-wheelers and the pick-ups which Capolongo calls "a no-growth market." Those trucks are being replaced by bigger trucks by operators who need greater efficiency, while other firms, such as truck rental companies and package delivery companies, are saving money by shifting to light trucks and vans.

FORD CLEARLY SEES a future in the compact pick-up business. In the '70s, about 90 percent of the pick-ups sold were full-size. By 1985, Ford predicts, 50 percent of the sales will be small pick-ups, with sales of one million units. Capolongo said Ford plans to spend an unprecedented $2 billion on new compact truck programs by 1985. In January, Ford will introduce a two-wheel drive version of its small Ranger pick-up.

Four-wheel-drive and diesel versions will be offered as 1983 models, with commercial models in later years. The Ranger will be about 20 inches shorter than Ford's full-sized F-series pick-up and get about 25 percent better mileage. Ford's Louisville plant, which will build the Ranger, has a capacity of about 300,000 units annually, compared with the typical anuual sales of its Courier compact pickup, which Ford now imports from Japan. 38.16 million shares, against 39.61 million Monday. I he daily tally on tne NYbt showed about eight losers for every five stocks that gained ground, and the exchange's composite index slipped 0.38 to 74.94.

1 Michigan seminar on the changing auto motive industry, Capolongo said the days are gone when trends in truck sales were predictable and products evolved slowly. Today, he said, "sales charts look like Standard Poor index of 400 industrials dropped 0.89 to Ford's smallest pick-up truck is the Courier, with an EPA city mileage rating of 27. BUT AT THE OTHER END of the market, the U.S. automakers are poised to begin building the same kind of compact pick-up trucks the Japanese have sold so successfully. Today, Ford, General Motors Corp.

and Chrysler Corp. all sell compact pick-ups that are manufactured for them by their Japanese partners. The small pick-up market is quickly becoming the most competitive segment of the truck market. Ford expects its new Ranger pick-up, which will be launched in January, to compete with a dozen other models, including GM's new S-series truck, due for fall introduction, and what is today the only U.S.-built small pick-up, Volkswagen's Rabbit pick-up. In the 1 970s the truck market grew rapidly, reaching a peak of 4.3 million units in the U.S.

in 1978. Then came the crash. This year, Capolongo said, "the industry is struggling to keep the market at a 2.5-million-unit level." 3 145.46, and 500-stock composite index was down 0.76 Capolongo at 129.14. THE DOLLAR showed moderate gains against most key currencies, while gold rallied in late trading after falling to $400 an ounce. The federal funds rate, charged on overnight roller coasters.

Technology is moving rapidly. And the market demands state-of-the-art hardware." While most vehicles are being downsized, Capolongo says the trend in heavy-duty 18-wheeler trucks is to bigger trucks that can haul large loads cheaper than several smaller trucks. As evidence, he noted the average load capacity of a heavy truck has increased from 22,000 pounds in 1960 to more tha 35,000 pounds last year. oans between banks, stayed above 18 percent. Compiled by GREGORY SKWIRA.