Detroit Free Press du lieu suivant : Detroit, Michigan • Page 64

Jt DCtROiT FREE PRESSSUNDAY, APRIL 1, 1984 The bulls aren't ringia for Ma Bell right now lt 1 I r- 11 iuolwijf The Little One of the companies founded by William C. (Billy) Durant. the founder of General Motors was the Little Motor Car incorporated on Oct. 30. 1911.

It was named after William H. Little, who had been the former general manager at Buick under Durant and who left Buick to join Durant in this venture. The cars produced by Little in Flint were designed by Louis Chevrolet, of Buick racing fame. Chevrolet, who until then had never designed a car, was asked to develop prototypes of two autos, a four-and a six-cylinder model. His first attempt, the Little Four (pictured here), sold for $650, had a 90-inch Two rules hold in fashion sales Dear Mr.

Molloy: I'm an optical frames sales representative. Do conservative rules for dress, such as wearing beige raincoats, apply to a fashion saleswoman? The people I'm selling to are all fashionable dressers. L.M., Detroit Dear L.M.: Not all the rules apply. There are two unbreakable rules for fashion salespeople. The first is to look fashionable; the second is to look trustworthy, which means looking upper-middle-class.

The beige raincoat rule would apply because black raincoats say lower middle-class, whether you're fashionable or unfashionable. The rule about wearing conservative, tailored suits would not apply because that is not today's fashion look. The more fashionable suits today have a softer, less tailored look. However, you would be wise to stick with traditional colors such as beige, navy and gray, because they say trustworthy. wheelbase and a 20-horsepower engine.

Next came the Little Six, at $1,285. Chevrolet also developed a larger six-cylinder car produced by his own Chevrolet Motor Co. of Michigan. The Little Motor Car Co. merged in 1913 with Republic Motor Car Co.

and Chevrolet. This firm later evolved into the Chevrolet division of GM. Chris Kucharski Shakeout in kiddie pizza places A pretty shocking statistic appeared in the latest issue of the Granville Market Letter. The 964.4 million shares of Ma Bell the nation's most widely held stock have been stripped of more than $4.5 billion of their market value (or 22 percent) since December. Then they had a market value of just over $20.2 billion; today, $15.7 billion.

Since the public owns about 77 percent of Ma Bell's shares, the biggest loss was obviously suffered by the widows-and-orphans group. ALL OF THIS raises a couple of critical questions: What caused to tumble from a recent high of 21 lA to just under 16, especially with all sorts of bulls around? And where do shares go from here? Investors hope Joe Granville's wrong; he's forecasting a decline in to 10. big nagging problem: Longdistance telephone prices this area represents two-thirds of its profits as set by the Federal Communications Commission. Ma Bell's competition has the right to use the local telephone lines at a 65 to 70 percent discount from what has to pay. That discount was supposed to shrink to 55 percent on Tuesday of this week.

But Ma Bell howled it should be even less, so the FCC postponed the implementation date to June 13 while it reviews the situation. In addition to long-distance pricing, concerns which are hurting the stock are also raised about the ability of management; prospects of heavy dividend pressures; the heavy start-up costs associated with new busk nesses; how successful the company; will be in new technological fields, namely data processing; the of settling the nagging number of anti-: trust suits; the mushrooming competition in the telecommunications business; and the ability to obtaitl timely and adequate rate increases. In brief, the big question is whether the new on the heels of the breakup of the company, can adjust to the real world. The continued weakness at shares suggests the bears are putting forth a more persuasive case than the bulls. BUT THE FOLKS at Paine Webber think the bear case is Not only that, George Dellinger, Paine Webber's specialist, says the stock has a shot at hitting $25 over the next 12 to 18 months, jf, it can overcome two hurdles: clearing up the confusion in long-distance telephone rates and costs, and demonstrating a higher degree of competitiveness at Western Electric (the company's manufacturing arm) in its new businesses notably data processing.

In future quarters, Dellinger sees positive earnings benefits. figure they'll stub their toe here and there but eventually they should be moving in the right direction," he says. PIZZA TIME, from Page 1F Inc. founder Nolan Bushnell. After Bushnell sold Atari to Warner Communications in 1976, Atari scored profits of $323.3 million in 1982, only to see $539 million In losses and more than 2,500 layoffs in 1983.

Pizza Time's financial problems have been accompanied by top management changes at its Sunnyvale, headquarters. Joseph Keenan resigned as president in September 1983. Former president Randall Pike stepped down in March, and co-founder Bushnell resigned in February. Free Press Photo bv MANNY CRISOSTOMO PIZZA TIME is not alone in the pizzaentertainment center shakeout. mart which entered the market on a trial basis in 1982 with two Abra Dabra restaurants, closed them in late 1983, said corporate spokeswoman Barbara Palazzolo.

ShowBiz Pizza Place, run by Dallas-based Brock Hotel also expects to report a 1983 loss. Securities analysts, restaurant executives and customers say the concept was hurt by expensive but poor quality food in some locations, too many similar restaurants in the same market, bored parents, and the changing tastes of the two- to 11 -year-old children who make up the bulk of the company's customers. Pizza Time has 131 company-owned and 116 franchised stores in the United States, Puerto Rico, Canada, Hong Kong, Singapore and Australia. The nine Michigan Chuck E. Cheeses are part of 1 2 family-operated franchised stores owned by Little Caesars pizza parlor owners Mike and Marian Hitch.

Mike Hitch also owns the Detroit Red Wings. Unlike other Pizza Time restaurants around the the Hitch stores are holding their own, according to franchise attorney Denise Ilitch-Lites. Lisa Hitch, the franchises' marketing and public relations director, would not release sales or profit figures, but she said sales have jumped 30 percent in the most recent quarter from the last quarter of 1983, and weekly patronage has remained about the same as during the industry boom year of 1982. BUT ELSEWHERE, the chain's problems appear to be more severe. Pizza Time president and chief executive officer Henry Montgomery promised last week to return the company to profitability, but he faces a number of hurdles in achieving that goal.

While Pizza Time officials were well-versed in the entertainment industry, they did not have expertise in the restaurant industry, said New York restaurant analyst Hardy Bowen, of the investment firm of Arnhold and S. Bleichroeder Inc. "They did not have the discipline to run a restaurant," he said. "The salad bars are sloppy, operations are bad, and a lot of the restaurant fundamentals were poor." The pizza, which was the mainstay of the restaurant, was considered bland by some and not good enough to draw adults, who could care less about singing robot dogs and Pac-Man. "Had they been selling good pizza at the same time they were selling theatrics, it would have made the customer base more stable," said restaurant analyst Charles Glovsky of Eppler, Guerin Turner a Dallas-based investments firm.

Ilitch-operated franchises use their own pizza recipe, which is not the same as Little Caesars' pizza, but much better than Pizza Time's, Lisa Hitch said. Because of the seemingly unlimited growth potential of the Chuck E. Cheese format, Similar restaurants popped up all over the landscape and started to cut into each other's market. In Dallas, where there are nine of the Pizza Time type restaurants, the market is saturated, Glovsky said. "Every time they opened a new store, they were cannibalizing the sales of the old stores," he said.

mart dropped out of the industry because of a rapid trend away from arcade video games and toward home entertainment systems. "Why go out when you can order a pizza and play at home?" said mart's Palazzolo. Pizza Time managers also are under pressure to come up with new robots and routines to keep customers satisfied, Lisa Hitch said. "Kids get tired of things fast, so you have to keep changing," she said. Finally, with a cost of up to $1 million to outfit a store, it is not easy to attract the sales volume necessary to make a profit, Bowen said.

In an effort to salvage what once promised to be a lucrative business, the industry has made changes. Within the last six months, Pizza Time has instituted a heartier pizza with more sauce and lounges with wide-screen televisions to appeal to adult customers, a A young fan watches the robot trio at the Chuck E. Cheese Pizza Time Theatre in Clawson. spokesman said. ShowBiz Pizza has adjusted its robotic entertainment to feature Beatles music to appeal to parents.

The firm also has started testing short-subject films. Lisa Hitch traces the relative success of the Hitch-owned franchises to the fact that the family has been in the restaurant business for 25 years and that they have added some unique innovations. To create a greater adult market and offer more variety, pasta dishes, Mexican food and sandwiches have been added to the menu in Clawson and are expected to be offered at the other stores, she said. The firm's Clawson restaurant also features new rides and six computer-controlled robots capable of tapping their feet, rocking in rocking chairs, and talking back to children with the help of a technician in a hidden control booth. THE NEW ROBOTS were built specifically for the Ilitch-owned stores and will likely be featured in their other stores, Hitch said.

"We wouldn't be changing (parts of the operation) if we weren't planning to stay in business. The concept of Chuck E. Cheese will never die. Parents always need somewhere to take their little kids." Paul Pendergast, a Dallas-based spokesman for ShowBiz Pizza, said, "We think the marketplace is improving for a survivor. We intend to be a survivor and perhaps the only survivor.

But analyst Bowen said the industry is trendy, and he does not think the entertainment restauranttheater concept will continue to attract customers. "The longer they are open, the lower the volume," he said. "About the eighth time (a customer returns), those robots get a little old." SAI.ES Who can help move a successfiil person into a more rewarding career? ONE YEAR BONUS INTEREST JUMBO CERTIFICATE The certificate will earn 12.00 BONUS INTEREST during the first month. The certificate will earn 10.50 interest the next 1 1 months. The rates of earnings are guaranieed for the entire certificate term.

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Grand Rapids, Michigan 49503, Mom. MKhtgan 48IM, (616) (313) 24I-2WI2 IANSING-101 South Washington MUSKEGON Muskegon federal Square, Lansing, Michigan 4OT33, ''E; C.17) 482-1571 Michigan 4'M40, (616) 72M4BI itu, (,., TRAVERSE CITY Logan Place West, 3210 Racquet Cluh Drive, Traverse City, Michigan 4tt4, (6161 947-130U Some state or local taxes may be applicable. Labor relations: The chief contrast GM, NISSAN, from Page 1F supervisor in the hood and door assembly area. "Well, I'm up, and, in fact, I'm overproducing my quota of parts right now. So where are they?" AT PONTIAC, meanwhile, a bitter battle between UAW Local 594 and management of GM Truck and Bus Manufacturing Division, sparked by the company's decision to close a small parts plant nearby, has spilled over onto the shop floor.

"There is a morale problem, and I think it is affecting quality," said Don Douglas, president of Local 594, which represents hourly workers at the Pontiac plant. "When you make up your mind that somebody's trying to put it to you, you have a tendency to let down." GM's own internal quality audits show that the Pontiac plant is producing vehicles of lower quality than either of the firm's other two light truck plants, in Moraine, Ohio, and Shreveport, La. But plant manager Robert Lee insists quality has not been hurt by the labor problems. "We've studied whether it has caused a problem on quality, and we haven't seen a correlation," he said. "I feel that the morale of the people is still extremely high." Meanwhile, many of Nissan's executives in Tennessee who came from Detroit's Big Three argue that they are able to use Nissan's workers more efficiently tha they could have at GM or Ford Motor Co.

because of union work rules at those firms that restrict the kind of tasks that workers can be required to perform. "The biggest lesson Detroit has to learn is that cooperation is essential to be successful," said Larry Seltz, Nissan's director of personnel development, who left Ford in 1981. "Unless they've established a different kind of relationship with the UAW than I knew, they couldn't do what we're accomplishing here. They wouldn't be as efficient." THE LABOR PROBLEMS in Pontiac appear to be deep, with little prospect for improvement. To protest the company's decision to close an adjacent small parts machining plant, the UAW pulled out of a management-union quality-of-work-life program at the truck plant last fall.

The union also asked its members to authorize a strike at the truck plant to further protest the closing, but that was narrowly voted down in February. Douglas and other union leaders argue that management used the work life program to cut costs and eliminate jobs by pitting workers against each other and against their union leaders. The program is designed to improve working conditions and involve hourly workers in decision making to reduce their sense of alienation from the company. But Douglas says he still doesn't believe Nissan will gain a long-term advantage over GM because of the labor friction at the Truck and Bus plant. "They (Nissan) are virtually problem free at this point as far as labor relations," Douglas said.

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PHONE. DEARBORN EA. FIRST FEDERAL SAVINGS OF- DEARBORN Established 1X15 A headline in Friday's Free Press misrepresented the testimony of a witness in General Motors X-car trial in federal court in Washington, D.C. The headline should have said the witness said GM withheld information from the government five times..