Detroit Free Press from Detroit, Michigan • Page 20

The Detroit News M. 5 nk. -j ri Jon Pepper Coming Monday Cost of long-term care You can wipe out a lifetime of savings if you don't make plans for long-term care. Learn what options you have to choose from. In Strategies (I yfef J'TZs mm m''iiSi'it Section Sunday, August 25, 1996 Manufactured homes find haven in Metro Detroit Spotlight is on industry as growth, bidding war rages in our back yard.

By Steve Raphael The Detroit News More than anything else, Fran Detweiler wanted a fireplace and Jacuzzi in her new home. That was atop her wish list five years ago when she and her husband, Edward Kortes, decided to move from their Howell home to escape high taxes and a time-consuming three-quarter acre lot. Detweiler got what she wanted when she bought a manufactured home and moved it to Meadow Lake Estates in White Lake Township, a manufactured home community. .1 "It's a good place to be," she said. "It's comfortable, I like having neighbors, I have no worries about maintenance or garbage pickup.

When we go away on vacation, our home is looked after." Last week, Metro Detroit became the focal point for the little noticed manufactured home management industry when a bidding war erupted between the four major companies. 'Z Sterling Heights-based Chateau Properties which had announced earlier it would merge with Photos by Alan LessigThe Detroit News Retrofitting and refurbishing its older DC-9 fleet has let Northwest put off buying expensive new aircraft, and cut its huge long-term indebtedness. Slicing up Northwest pie Airline balances rewarding workers with protecting its rebounding assets rX ROC Industries Inc. of Englewood, received two unsolicited buyout offers. The offers came from industry leader Manufactured Home Communities Inc.

of Chicago, and No. 2, Sun Communities Inc. of Farmington Hills. Chateau is the third largest company in the industry and ROC is the fourth largest. Manufactured Home's hostile bid would pay $387.3 million for Chateau, while Sun's offer of a "strategic merger" would pay $300 million.

Chateau's board met into the late evening Thursday, Dasburg alone," said Paul Omodt, a spokesman for the Air Line Pilots Association that represents 5,500 Northwest pilots. "This was a group effort. We feel we deserve a piece of the pie." In slicing the pie, Dasburg will be constantly nimdful of July 6, 1993, when he had attorneys on stand-by in Delaware awaiting his call to file bankruptcy papers. The last- Alan LessigThe Detroit News "We set standards for the industry copied by other John Boll Chairman, Chateau Properties Inc. Peter Cummings takes the long view of Detroit along Woodward Avenue Max Fisher will occasionally poke his head into Peter Cummings' office in the suite they share atop Detroit's Fisher Building.

"Hell ask, 'Are you working on philanthropy or are you making Cummings says. The answer is fairly simple. If Cummings, who is married to the financier's daughter, Julie, is working on real estate projects in Houston or Florida, he is making money. If he is working on development in Detroit, he is engaged in philanthropy. The goods news is that talented business people such as the 48-year-old Cummings still have an interest in redeveloping the city.

The bad news is that investing in Detroit still doesn't guarantee many happy returns. Cummings' father-in-law knows about the business of Detroit devel- -opment first-hand. Fisher, along with partner Alfred Taubman, built the Riverfront Apartments next to Joe Louis Arena because they bebeved downtown needed more housing to sustain other kinds of development Their project, however, has yet to make a dime. That history does not deter Cummings. He is, he says, taking "the long view" of Detroit by opening an office of Peter Cummings Associates Real Estate in the Fisher Building to develop projects in the Woodward Avenue corridor.

He doesn't expect to make money right away. Yet he is convinced that the growing number of stadiums, theaters, offices and housing developments along Woodward mean prosperity is just around a distant corner. Whether his vision is a prophecy or a delusion depends upon who he talks to. Some friends tell him he's in denial over the economic death of Detroit. "I astounded by the number of people in the suburbs who have just written off the city," says Cummings, a graduate of Yale University who holds a master's degree from the University of Toronto.

"There are people in Oakland County who say, We live in wonderful neighborhoods. Our children go to wonderful schools. We have wonderful opportunities for shopping and recreation. So why do we need Detroit?" "I guess if you're comfortable living with that hermetic view, that's fine. But ask those people what their vision of Detroit is in 20 years.

Do they see cattle grazing along Woodward?" Cummings sees opportunities rather than cows growing on the land between the New Center and downtown. On the north is Henry Ford Health System and Wayne State University. To the south is a downtown anchored by General Motors Corp. in the Renaissance Center, the Theater District and two new stadiums. And in the center is the Detroit Medical Center, the Detroit Institute of Arts and the Orchestra Place campus that he is shaping in his role as vice-chairman of the orchestra's board.

Woodward's problem, and its hope, is the moonscape between attractions. By filling in the craters with mixed-use developments for offices, homes and shopping, Cummings figures Woodward could become a whole new world. Fortunately, he has three strengths that enable him to travel where the brave dare not go. One is vision, which he demonstrated by conceiving Orchestra Place, with its headquarters for the Medical Center and a high school for the performing arts. Second is money, which he derives in sufficient quantities from his ventures with Fisher and from other projects.

And third is commitment, which has been a characteristic of his father-in-law, too. "Is there money to be made?" Cummings says. Tou have to be focused and driven enough to not worry about that for a while. You also have to be patient. But I'm not doing this to lose money." If he does, however, at least he knows how to find some more.

Jon Pepper's column appears Sunday, Wednesday and Friday in The Detroit News. 1996 Auto Talks How profit sharing plays into Big 3 bargaining Workers anxious about big checks think twice about striking employer. By Dave Phillips, Daniel Howes and Charles E. Ramirez 1 The Detroit News Donna Novak, a housewife until 17 months ago, quickly found you can make a pretty good living as a heavy machinery operator at a Chrysler Corp. plant.

But the surprising part, she discovered, was the huge profit-sharing check her cut of the automaker's annual profits. Nine months on "We know if thejoblastyear wewalkout brought her $2,000. Rumors for one on the shop floor, minute, the she says, suggest proflt.shar. profit sharing this year could inS gone. hit $16 000 to Donna Novak $20,000 for some workers.

Chrysler Corp. That's serious employee money enough for her and many other United Auto Workers members at Chrysler to shudder at the prospect of this year's national contract talks leading to a profit-eating strike. "We know if we walk out for one minute, the profit-sharing is gone," said Novak, 26. "The possibility of a strike is weighing on everyone." Fears like Novak's show the subtle, but important, role big profit-sharing payouts are playing as national contract talks with the Big Three intensify. Years ago, UAW leaders had rank-and-file members spoiling for a strike as contract negotiations entered their final weeks.

This year has seen little of that rancor. Instead, UAW members seem to be dreading the kind of impact a strike could have on annual profit-sharing checks they've come to expect. That sentiment may be the trump card the auto industry uses to shape a labor pact with the UAW and prevent a strike. Not all UAW members collect the same profit-sharing checks. General Motors Corp.

hourly employees pocketed just $1,390 on average from the automaker's North American profits the past three years. Chrysler workers received $15,500 over the same period. Ford workers got $7,050. Still, worker sensitivity about profit sharing isnt lost on UAW President Stephen Yokich, who signaled last week his intention to avoid a costly walkout when contracts with the Big Three automakers expire Sept. 14.

"Our membership didn't elect us to go out on strike," Yokich said. "They elected us to get an agreement." Bargaining is expected to resume Monday in the wake of Yokich's startling decision last week to delay the selection of one company as a bargaining target. In meetings last week, Yokich challenged the automakers' chief executive and UAW staffers to tackle this year's tough issues. Chrysler's top bargainer, Vice-President Thomas Gallagher, will meet with Jack Laskowski, the union's Chrysler vice-president, in Chicago today at the Democratic national convention. Chrysler Chairman Robert J.

Eaton will also be in Chicago. Yokich could pick a target as ear- Please see TALKS, Page 3C Spreading the wealth Ford and Chrysler have handed healthy profit-sharing checks to UAW members in their plants during the current contract. UAW members at GM haven't fared as well. Company 1993 1994 1995 GM $0 $590 $800 1 Ford $1,350 $4,000 $1,700 Chrysler $4,300 $8,000 $3,200 Source: Automakers By Joel J. Smith The Detroit News The last time Northwest Airlines officials sat across the bargaining table from the carrier's six unions, the airline was running from bankruptcy and begging for concessions that would allow it to stay in business.

Three years later, Northwest has pulled off remarkable turnaround, has fat pockets and is facing employees who want their money back. How well Northwest balances the demands of workers who want to be rewarded for past sacrifices against the company's desire to protect its financial assets could determine how long the turnaround lasts. "We cannot reach agreements with our unions that would make other than economic sense," said John H. D.asburg, president and chief executive of Minneapolis-based Northwest. "Management certainly wants to take care of the employees of the airline, but we have a very broad responsibility to focus on the well-being of the airline in its entirety, including its shareholders." Northwest reported 1995 profits of $392 million, compared to a $1 billion loss in.

1992. The rosier financial picture is the result of leaner operations, more passenger traffic, and the $880 million in concessions that Northwest's 45,000 employees agreed to in 1993. Union-management relations have been warm at Northwest, as both groups struggled to revive the airline. Labor grievances have dropped by 300 percent. But that could change as bargaining begins this fall.

"This turnaround wasn't done by but passed on making a decision, said Chateau Chairman John Boll. He said the company needed more time to study all the offers. The flurryiJSf activity surrounding Chateau put the spotlight oh what has become a hot industry, as rising housing prices prompt many buyers to look for cheaper alternatives. Acting like landlords, manufactured home management companies lease land to the owners of manufactured homes, formerly called mobile homes. The management companies establish and maintain residential communities with paved roads, driveways and yards.

The average size of a manufactured home is 1,295 square feet. Investment analysts are currently enamored with companies like Chateau because they are stable, solid and return good yields. The industry's strength "is a big surprise to a lot of people this is a very, very low-risk business," said Ronald Petrie, an investment analysis with Roney Co. in Detroit. In 1995, one-third of all new homes built in America were manufactured homes, according to Chantilly, Manufactured Housing Institute, the trade association of the manufactured housing industry.

"The price per square foot, compared to a similar site-built home, is driving our success," said Brian Fannon, chief operating officer of Sun. According to 1993 U.S. Census Bureau figures, the cost per square foot for a manufactured home built in a single section was $20.56. A multiple section home cost $25.97 per square foot. That compares to $52.88 per square foot for a tra- Please see CHATEAU, Page 3C minute union concession averted that action, and began the stunning financial turnaround that left Northwest with record profits, a bright financial future, and a strong commitment to its largest hub at Detroit Metropolitan Airport.

"rt was a near-death experience," said Michael E. Levine, executive vice-president of marketing at Northwest The rosier financial picture is partly due to $880 million in sacrifices that 45,000 workers agreed to in 1993. and a key architect of its revival. Northwest made three major changes in business strategy. First, it got rid of all unprofitable routes and concentrated on building the company's hub system in Detroit, Minneapolis, Memphis and Japan.

Among the markets dropped or greatly reduced were Australia, Washington National, Seoul, JFK in Please see AIRLINE, Page 3C 1995 1996' 8,645.8 7,667.2 8,324.9 295 5 9,084.9 4,805.21 392 0 256 2 Northwest's turnaround Northwest Airlines officials have orchestrated a dramatic turnaround over the last four years, bringing the Minneapolis-based airline back from tfjfcijtink of bankruptcy and making it one of the most profitable compares in the industry. The numbers are in millions. Kern 1992 1993 1994 fWhile total assets for the airline have grotal assets $7,545.4 $7,5713 $8,070.1 have The bidding for Chateau pitting partners against shareholders could affect the industry. Page 3C Total liabilities 8,711.8 8,851.9 sales and income have Net sales 8,127.6 8,648.9 Net Income 5 -115 3 with the number of passengers carried, occupancy of flights and revenue per mile. Number of passengers 43.5 44.1 45.5 49.3 Passenger load factor 65.4 66.7 68.1 71.5 Revenuepassenger mile 10.70 11.4c 12.

tc 12 "Six months Northwest stock, which went public in March of 1994, has responded $50 20 Z. March July Oct. Jan. April July Oct. Jan, April July, 1994 1995 1996 Source: Northwest Airlines The Detmit News X.

Daniel Mears The Detroit News Julie Roche relaxes in Meadow Lake Estates with son, Nicholas, 5, and daughter, Danielle, 10. She praised the homes and their environment as "very community-like.".