Detroit Free Press from Detroit, Michigan • Page 53

Xj nr "''J 3 Section Michigan Memo, Page 3 Business People, Page 3 Call Business: 222-8765 Detroit 4frcc Stress Stocks slide in sell-off Mutual Funds, Page2E NYSE, Page 4E THE DOW Economist Laffer not worried about Clinton A sell-off among secondary issues pushed the rest of the stock market lower Tuesday. The Dow Jones industrial average lost 12.42 points to close at 3,193.32. Health-care and technology stocks were hit hardest. More on Page 2E. Super sales Superman's imminent death has set off unprecedented demand for the last DC Comics Superman comic i i vfl 4" 1 eral deficit would be reduced by off-budget items and by capital costs depreciated over many years as they would be in business accounting, and then adjusted for inflation.

Such an accounting would reduce the federal budget deficit for fiscal 1992 from $449 billion to a shadow of itself, he said, noting that if you throw in the value of the land owned by the federal government, federal finances move into a surplus. "Those (deficit) numbers are garbage," he said. While Clinton will have to contend for a time with economic sluggishness and rising interest rates, in the longer run the country's economic future looks bright, he said. The Reagan and Bush administrations have been widely criticized for running up huge federal budget deficits. But Laffer remains a staunch defender of Reagan's economic performance and the economic benefits of lower taxes.

Higher taxes and government spending are the major issues in the country and not the widely cited $54,000 the average American family owes because of the federal debt, he said. "Are you also aware that the average American family owns $54,000 of fixed-income securities they otherwise would not have owned if we had not had a national debt?" he said. "We owe it to ourselves. This is not squandered money." In a more accurate accounting, Laffer contended, the annual fed- smaller percentage of the popular vote than any of the last five losing presidential candidates, will be busy through his first term trying to build a constituency. That makes it unlikely he will make many controversial decisions, especially about raising taxes, which had so obviously hurt the economy and wrecked George Bush's prospects for re-election, the economist said.

"In the nicest sense of the word, Bill Clinton is unprincipled. He will do what is necessary in the job to get the job done and keep himself in a favorable light," Laffer said. "He has got to realize that a lot of people did not vote for him because we love Bill Clinton but because we wanted to get rid of George Bush." i Laffer sometimes called the father of supply-side economics by Barry Rohan Free Press Business Writer Economist Arthur Laffer a tireless champion of the Reagan Revolution told a largely Republican gathering in Detroit Tuesday to stop worrying about the federal deficit and the new Democratic administration. "Lower your fears about what Bill Clinton will do to the world," he said. "This man is an extremely affable person This man likes to be liked and wants to be a popular president." Laffer, a lifelong Republican who confessed he voted for President-elect Clinton as the lesser evil, spoke to about 100 people attending an investment conference at the Hotel Pontchartrain, sponsored by the Detroit-based stock brokerage firm Roney Co.

Laffer said Clinton, who won a book. About 3 million copies of Superman No. 75 are due in stores nationwide today. That's 10 times as many as the usual Superman comic. In the book, Lois Lane gets left at the altar Superman and collectors are left waiting for a THE NEW KMART resurrection.

Food label rules delayed A battle between two government departments Agriculture vs. Health and Human Services has delayed publication of rules for relabeling food so terms such as "light" and "low-fat" will have consistent meanings. The rules were due Nov. 8. The American Heart Association, the New York City consumer affairs commissioner and the Center for Science in the Public Interest said they'll sue if the rules aren't published soon.

Beaujolais boo-hoo The uncorking of the first of 50 million bottles of 1992 Beaujolais Nouveau on Thursday won't be as much fun as in the roaring 1980s. A dramatic decline in drinking, plummeting prices and stiff competition from newer vintners has French winemakers sighing. Prototype stores, new ideas are key to success BY CECILIA DECK Free Press Business Writer L7 I Benetton ads on display. Chairman Joseph An-tonini escorted reporters around Kmart new prototype store in Auburn Hills Manes i ffgjy 1 Sr- II L-yfW Benetton's bummers on display Never one to choose cheery art and certainly not art connected with clothing Benetton has made a name for itself by using controversial and sometimes painful photos in its advertising: a dying AIDS victim; a priest kissing a nun; an oil-covered bird; an albino Zulu woman standing among a group of her Kmart Chairman Joseph Antonini during a tour of the prototype a pair of silk boxer shorts price $16.88. tribespeople.

In Chicago, the Museurh, of Contemporary Photography atCpIiunDia wjuege jb exmniung oaraas irom intyuuiajr doming maimer united toiors pi jsenejxon Tuesday, he couldn't hide his zeal for the discount business. "Show them the silk shirt for $21.99," he would tell a merchandising manager. "How much would you pay for that at a department store?" Everywhere he went he highlighted deals men's cotton sweaters for $23.99, silk boxer shorts for $16.88 and a VCR for $169. The prices sounded so good that a reporter asked Antonini how Kmart hoped to make any money. "The mix," was Antonini's reply.

The short answer highlights a basic truth about Troy-based Kmart a corporation that over the past five years has successfully diversified into powerful specialty stores, including PACE warehouses, Builders Square, OfficeMax, Sports Authority and Borders bookstores. But for all the sizzle of the specialty divisions, making money at Kmart's 2,500 discount stores is still the crux of its success. Even with the rising sales at the specialty divisions, Kmart stores still account for about 70 percent of the company's sales. And that's why new ideas and prototype stores are so important. "You can't raise prices, so Arthur Laffer: "Lower your fears about what Bill Clinton will do to the world." is a former Reagan economic adviser whose Laffer curve predicted that lower taxes would produce higher government revenues by stimulating economic growth.

and cotton shirts displayed on color-coordinated shelves reminiscent of the Gap. Bedding displayed in sets on real beds, as in a department store. Electronic helpers like shelf talkers voice boxes that give customers advice about such products as car batteries or inline skates and a hot line in the bicycle department that connects shoppers directly to Huffy, a manufacturer. An automotive shop where customers can watch through glass as technicians work on their cars. No more Blue Light specials.

Instead, customers can choose from 30 different discount coupons at an electronic dispenser at the front of the store. Coupons for other specials are avail dent of the Michigan Citizens Lobby, said the consumer group is interested in the issue but hasn't become involved. State Attorney General Frank Kelley, who frequently intervenes in utility issues, is following the case but hasn't taken a stand, said spokesman Chris Dewitt. If large energy users are allowed to buy power competitively for the lowest price available, they could save 15 percent to 25 percent on their utility bills, said Joseph Dudak, director of energy and environmental affairs at National Steel which operates the Great Lakes Steel plant in Ecorse. Dudak chairs the 27-member Association of Businesses Advocating Tariff Equity (ABATE), a group that includes Ford Motor General Motors Chrysler Dow Corning Warner-Lambert Co.

and Monsanto Co. Retail wheeling also would release large industries from paying for state-ordered programs and subsidies funded by large power users, Dudak said. "When the commission comes fdtward and wants to add social and County to proceed with plans for Metro BY BERNIE SHELLUM Free Press Business Writer Costly development projects at Detroit Metro Airport will proceed regardless of the fate of cash-strapped Northwest Airlines, the airport's dominant carrier, Wayne County Executive Ed McNamara said Tuesday. "We're just assuming, until we hear something more definitive, all projects are go," McNamara said. "We are meeting with them in the next week or so.

Until we're not slowing down our pace. "We assume that if Northwest for some reason curtails its operations at Metro there are enough other carriers there that will pick up the slack. The demand is there. It'll be met by someone. Hopefully, it'll be Northwest." He said a new $3 surcharge on tickets will take effect Jan.

1, providing an estimated $28 million a year in revenue to finance airport projects. In the Twin Cities, where Northwest is based, a labor union that may hold the key to the carri er tuture remained shrouded in uncertainty Tuesday. District Lodge 143 of the International Association of Machinists and Aerospace Workers, which represents 15,000 Northwest workers, was under the Ed McNamara says "we're not slowing down our pace." control of its top international officers. They placed the local under trusteeship Monday, putting General Vice President John Peterpaul in charge. No one seemed to know what the impact would be.

Representatives of the Teamsters union and Airline Pilots Association said they couldn't figure it out, and Machinists officials did not return calls. Last week, Northwest President John Dasburg warned the Teamsters union, which represents flight attendants, that the airline would file for bankruptcy if it didn't get $500 million in contractual concessions and productivity improvements. The pilots union already had offered to provide $300 million in exchange for a stake in Northwest, but the Machinists balked at contributing toward the remaining $200 million. In taking control on Monday, LAM international officers explained in a letter they were doing so in part because of protests over an election of local officers last August. A pilots union spokesman said the Machinists have disagreements on a wide range of issues, including the conduct of negotiations with Northwest.

"The local officers are people who have jobs at stake at Northwest and John Peterpaul doesn't," he said, suggesting that it is the international officers who pre most militant- Playboy's Polish launch Playboy magazine is trying to live down the smutty it acquired in Poland during years 'of communist rule, when the tamest of girlie magazines was routinely confiscated. The editor of a new Polish edition, launched Tuesday, said, "We have the highest literary and artistic aspirations." The first edition of the Polish Playboy includes a 1981 interview with Polish President Lech Walesa, given when he was head of the Solidarity Union. Iowa: Streets lined with corn Grain elevators are overflowing in Iowa, where a record harvest has forced some towns to store golden corn on the streets. Iowa's harvest is forecast at 1.9 billion bushels for 1992, 33 percent more than last year and 10 percent more than the previous record. All that corn means farmers work harder to get less money for their crop.

Hall of shamer. Dow Corning Inducted into Working Women magazine's second annual Hall of Shame: evangelist Pat Robertson, the Tailhook Association of the U.S. Navy, Hooters restaurant and the T-shirts its waitresses must wear, with two "owl's eyes" that look remarkably like breasts, and Dow Corning, for disregarding health risks of silicone breast implants for 20 years. Dow Corning has announced plans for large-scale safety studies, prompting the magazine to run this comment: "This time, let's hope they use guinea pigs instead of women." Funeral fares return Four major airlines are again giving discounts for people flying to the funerals of relatives. The discounts were eliminated earlier this year when airlines led by American Airlines tried to restructure fares to stem bottom-line hemorrhaging.

USAir joined United, American and Northwest in restoring the discounts, which are often half of the full coach fare. The discounts are only for members of the immediate family. Edited by Janet Braunstein from staff and wire reports Use of utilities' lines, but not power, sought JOHN COLLIERDetroit Free Press store in Auburn Hills holds able on the handle of the shopping cart. Kmart is half-way through its plan to refurbish, enlarge or move all of its discount stores by 1996. Renovated stores experience sales gains of five percent to 50 percent, Antonini said.

Strong Kmart discount stores are an important part of the company's plans to open "power centers" like one planned for Utica next spring, said Stephen Latz of A.G. Edwards in St. Louis. The power centers bring together at a single location Kmart stores and those of its specialty divisions. "You have to remember that the bulk of the company's profits still come from the discount stores," Latz said.

"To neglect them is to have your lunch handed to you." other programs to the rate base, industrial users will want to get off the system," he said. Retail wheeling is also an alternative to new utility construction, said Robert Strong, a partner at the Detroit law firm of Hill Lewis, general counsel for ABATE. What happens in Michigan will be watched closely by other states as well as other large industrial power users, said John Hughes, director of technical affairs for the Electricity Consumers Resource Council, a Washington D.C.-based association of 21 companies that buy about 4 percent of the nation's electricity. "The Michigan PSC has taken the initiative on this, and they should be commended," Hughes said. "Congress agrees that states have the authority to order retail wheeling and acknowledges that the Federal Energy Regulatory Commission doesn't have a monopoly on transmission regulation.

That is now clearly split between state public service commissions and FERC, but deciding exactly where the line will be drawn will send a lot of lawyers' kids through schotf," you have to be a good merchant," Antonini said. That means keeping current customers and attracting new ones by improving the stores' ambiance and customer service. The Auburn Hills store, at Joslyn Road and 1-75, embodies many of the latest Kmart strategies: Shops up front for photo-finishing and music and video that Kmart hopes will attract younger customers and possibly become destinations apart from the rest of the store. More space for women's fashion, with more high-quality name brand and private label apparel, more petite and plus sizes, and clothing displayed as coordinating outfits. A denim shop with women's and men's denim, twill pants The Michigan case is the first test of that authority.

The PSC is considering a request by a group of 27 large power users for an experimental retail transmission tariff, which would allow them to buy electricity from independent producers or other utilities and receive it via transmission lines owned by Consumers Power Co. and Detroit Edison Co. The two utilities have been asked to file their response by Jan. 14. The commission will hear the case before an administrative law judge on July 30.

"This could be an important test case for the nation," said Robert Dobkin, a spokesman for Detroit Edison, which has long opposed changes to utility laws. "Some of our largest industrial customers are seeking retail transmission access to our system," Dobkin said. "This will only benefit large customers. Small commercial users and residential customers will face higher rates, needed to keep the system in operation." But the issue has yet to grab the attention of Michigan consumer advocates. Rick Stoddard, presi The Journal of Commerce and Free Press staff In what could be a national precedent, major companies in Michigan want to buy electricity from producers other than local utilities and then be allowed to use the utilities' transmission systems to deliver it.

The companies say they could save money and stop subsidizing programs for other utility customers. But utilities say losing the large companies' business could mean higher bills for residential and small-business customers. The Michigan case, pending before the state Public Service Commission (PSC), arose late last month after Congress passed legislation mandating so-called open-access transmission. Under the law, federal regulators can order utilities to allow wholesale power to be moved, for a fee, over the utilities' lines. The practice is called wheeling.

But the new law bars federal authorities from ordering retail power sales between producers and customers over another par ty power lines, reserving such suh decisions for state regulators, YOUR MONEY iV I) If you no longer work for a company, you should be allowed to roll a lumpsum pension payment into an IRA..