Lansing State Journal from Lansing, Michigan • Page 15

Dave Poulson Business Editor 377-1191 Lansing State Journal May 4, 1989 Page 5B business Eastern bidders given one week to book offers Dow Jones industrials 9.16 Volume: 171.69 million shares; I ii i rr 1 I 2.350 2,300 250 -rv 200 I' 2,150 Sj 2.100 II II II Iff JM All sales of Eastern assets must be approved by the federal bankruptcy court, which is overseeing the airline's Chapter 11 reorganization. During Wednesday's hearing, a lawyer disclosed that a group led by William Howard, the former chairman of Piedmont Airlines, and the investment firm Prudential-Bache Securities Inc. was interested in making a buyout proposal. Eastern and its parent Texas Air Corp. have turned down a buyout offer from a group led by former baseball commissioner Peter Ueberroth plus proposals by billionaire hotel executive Jay Pritzker and others that they said were not "bona fide" offers.

In a statement from its Phoenix headquarters, America West indicated that it the shuttle and 10 Boeing 757 airliners, raising the possibility of a bidding war. Eastern, which has been largely grounded since a March 4 walkout by its Machinists, pilots and flight attendants unions, has rejected several buyout proposals for the entire airline. The company plans to reorganize as a smaller carrier and to raise about $1.8 billion by selling aircraft and other assets. Lifland has been pushing to get the airline back to full operations as soon as possible and has been pushing actively for a sale of the entire company. David Shapiro, the court-appointed bankruptcy examiner, also asked for a May 17 hearing to evaluate any viable offers.

would pay $390 million cash for the Boston-New York-Washington shuttle, with the balance of its offer to be paid in cash and by assumption of obligations related to the 10 757 jetliners. Eastern has agreed to sell the shuttle along with 17 smaller, older Boeing 727s, to Trump but the deal has not yet been approved by the bankruptcy court. America West has indicated its interest in buying Eastern's shuttle or other assets several times since the strike began. America West is the nation's lOth-largest carrier and serves 46 destinations throughout the United States and Canada. The company turned a $45 million loss in 1987 into a profit of $9.4 million last year.

By MARCY GORDON Associated Press NEW YORK A federal bankruptcy judge Wednesday gave interested buyers a week to submit offers for strikebound Eastern Airlines. Also Wednesday, a new potential bidder emerged and another carrier made a new proposal to buy Eastern's profitable Northeast shuttle. U.S. Bankruptcy Judge Burton Lifland set a May 10 deadline for bidders to make offers for Eastern in its entirety, or for the shuttle at a price exceeding the $365 million developer Donald Trump agreed to pay. Separately, America West Airlines Inc.

said it had offered to pay $726 million for NYSEIndn AMEXfextor NASDAQ 172.35 0.17 to 344.88 0.04 10 308.18 081 to 428.84 Hot dog! It's spring By DAVE POULSON Lansing State Journal It's not exactly a robin, but Todd Behovitz's downtown hot dog stand is just as much of a sign of spring. "Summertime can't be far down the road when you see us come out," said Behovitz, who has sold hot dogs downtown for four years. "The boys of summer are back." Behovitz, 21, has been back selling dogs for about two weeks. He can catch the foot traffic from his spot at Ottawa Street and North Washington Mall as well as the crowd at the WMMQ-spon-sored Brown Bag concerts. The free lunchtime concerts are every Friday beginning May 26.

His counterparts, Bob and Debbie Gardner, catch the Capitol and City Hall crowds at Capitol and Michigan avenues. "The reception was great," said Bob Gardner, who hit the street Monday. Customers said: "I've been waiting all winter for one of your hot dogs." Gardner, himself, wasn't adverse to sampling his wares. "I'm starting to blimp out," he said. The Gardners and Behovitz have some of the more choice sites left to vendors after the city of Lansing last year limited them.

So far, the city has allocated three sites to hot dog vendors, one to an ice cream seller and plans to award another to a sandwich cart, said Doug Wiley, of the city's Parks and Recreation Department. Two sites remain. Vendors rent them for a year at a rate of $100 a month. But they only pay rent when they are used. rate boost unlikely Associated Press WASHINGTON The economy grew at a moderate, sustainable pace in the past three months, the Federal Reserve said Wednesday.

Analysts said the report is a sign the central bank won't push interest rates higher. The Fed's review of economic conditions painted a picture of an economy in which the growth rate is slowing and inflationary pressures easing. The central bank for the past year has been trying to engineer just such a development, by pushing interest rates up to dampen demand and thus relieve pressures on tight labor markets and factories operating at peak capacity. The tone of this report was more optimistic than the last economic survey released two months ago. The new report, based on surveys conducted by the 12 regional Federal Reserve banks, said there were no serious bottlenecks in the manufacturing sector and the costs of raw materials and labor had shown no significant increases.

"The nation's economy grew at a moderate, sustainable pace in February, March and early April," the central bank said. By using the word sustainable, analysts said, the Fed was expressing its satisfaction with the current pace of economic growth and indicating that it did not see the need to push interest rates higher. "It says that the Fed is happy with the way the economy has moderated with growth slowing to a sustainable level," said economist David Wyss. The economic survey will be used when Fed policymakers meet May 16 to decide on the course for future monetary strategy. The Fed's main job is to keep inflation under control through decisions on how much money to make available to lending institutions.

Although some economists had expressed fears that the Fed has overdone its tightening efforts and will push the country into a recession later this year, the economic review saw no evidence of a dangerous slowdown in any sector of the economy. In other economic news, the government said Wednesday that business productivity rose at an annual rate of 0.5 percent in the first quarter of 1989, with manufacturing workers significantly increasing their per-hour output. Overall output in non-farm business rose at a rate of 3.6 percent while hours worked climbed 3.1 percent, leaving the half-percent productivity gain. The department revised the fourth-quarter non-farm productivity gain to an annual rate of 1 percent, up from the 0.1 percent initially reported. Lansing State Journal Cautious market loses ground Associated Press The stock market posted some scattered losses Wednesday in an atmosphere of caution on Wall Street.

Analysts said: Many traders were leery of making any big commitments until they get a look at Friday's scheduled report from the Labor Department on the employment situation for April. The figures are expected to provide an indication of whether the economy continued to slow last month after giving evidence of losing some momentum in the first quarter. Hopes have been increasing on Wall Street that the Federal Reserve is succeeding in its campaign to cool down inflation without tightening credit so much as to cause a recession. But that view was called into question when a trade association of corporate purchasing managers reported that business activity picked up in April. Notable stocks: Avon Products was heavily traded, up 4 at 36 on news that Irwin Jacobs, the Minneapolis investor, and Amway Corp.

have acquired a 10 percent interest in the company. Avon said it was "not for sale." Eastman Kodak dropped y2 to 43 on top of a 314 -point loss Tuesday, when the company reported a bigger-than-expected decline in its quarterly earnings. Other losers among the blue chips included International Business Machines, down at 1 1 1 V2 Ford Motor, down at 47, and Coca-Cola, down y2 at 54. Nynex dropped 1 to 72. The company told analysts it expects to have difficulty meeting its goal of 7 percent to 10 percent earnings growth this year.

NCNB gained 2 to 38. The company said it knew of no reason for the heavier-than-usual trading in its shares. Xtra which said it expected to post lower earnings from continuing operations in its current fiscal year, fell 2 to 37. Market measures: As measured by Wilshire Associates' index of more than 5,000 actively traded stocks, the market increased $950 million, or 0.03 percent, in value. The NYSE's composite index of all its listed common stocks dipped .02 to 172.35.

Advancing and declining issues were about evenly balanced in nationwide trading of New York Stock Exchange-listed stocks, with 674 up, 703 down and 556 unchanged. Standard Poor's industrial index rose .38 to 354.99, and 500-stock composite index was up .04 at 308.16 Complete stocks. 6B. 7B Lansing State JournalCHUCK WING Todd Behovitz, 21, a business student at Lansing Community College, serves up hot dogs Wednesday on the Washington Square This is the fourth year he has sold hot dogs. Japan to get wind of new fast food delicacy Associated Press CHICAGO The Chicago-style hot dog an all-beef weiner with tomatoes, onions, mustard, relish, cucumbers and jalapeno peppers in a poppy-seed bun is heading for Japan.

Richard Portillo, a Chicago hot dog-stand magnate, has a deal whereby Tokyo-based Chicago Foods Corp. will sell the Windy City delicacy. He hopes the venture makes the Chicago-style hot dog as big a hit there as McDonald's, which operates 653 restaurants in Japan. "Nobody's taken a concept like the hot dog and tried to do something like this in Japan," he said Wednesday. The Chicago-style red-hot is a different breed than anything available in Japan, said Paul Chang, a Chinese-born, American-educated Chicago Foods employee who is learning the hot dog business from Portillo.

"We call it a harmony taste," Chang said. "From end to end of bun, you can have the same flavor at any bite." Audit may provide Hannah Center tax answers velopment grant for equipment. Meridian Township issued the tax-exempt bonds. Developers George and Louis Eyde contributed $4 million of their own financing. In return, Lansing and Meridian Township were to share the projected 600 new jobs and new tax revenue generated by the new companies at the center.

The grant was later reduced to less than $900,000 and just 60 new jobs are projected, said Jack Flynn, HUD spokesman. The project has been reclassified at the Eydes' request from high-technology office to conventional office building. Meridian Township and Lansing officials are not satisfied that the original agreement has been honored. The Eydes contend that they fulfilled their objectives. The center, although it houses no labora tories, contains several high tech firms, said Eyde lawyer Mark Clouse.

The General Motors dealer assistance center is high tech because it has a new method of marketing cars to dealers nationwide over the phone, he said. Other high-tech firms include Boris Systems which designs computer software for real estate and real estate-related markets, and Disability Research Systems, a company that does mechanical structure research to aid disabled people, he said. Hannah Center also houses Eyde Co. headquarters, facilities and a stockbroker, Clouse said. "We'd like to have as much research as possible," Clouse said.

But Eyde needs to keep the building full in the meantime to repay the bonds, he said. Carr requested the audit in response to Meridian Township officials worried about the Hannah Center's failure to attract new research labs and jobs, said Sherry Wilson, director of the Meridian Township Economic Development Corporation. The township is also worried that the $10 million in tax-exempt bonds it issued for the project could become taxable if the developers didn't follow federal guidelines or use all the UDAG grant money, Wilson said. The audit should show the project's status and clarify the township's responsibilities, she said. The grant money has not been spent, and HUD controls it.

Hannah Center was a joint Lansing-Meridian financing effort, aimed at creating new high-tech jobs. Lansing applied for the U.S. Department of Housing and Urban De By LYNETTE A. KALSNES Lansing State Journal MERIDIAN TWP. Differences between local government officials and a developer over a high tech research center may end Monday when a U.S.

General Accounting Office audit is released. The agency investigated a $3.3 million federal grant for new research and laboratory equipment awarded to Lansing in 1983 for the Hannah Research and Technology Center, 4700 South Hagadorn Road in Meridian Township. The Urban Development Action Grant is administered by the U.S. Department of Housing and Urban Development U.S. Rep.

Bob Carr, D-East Lansing, will release the report Monday from his East Lansing congressional office. ELSEWHERE Michigan BUSINESS DIGEST gas price! adult magazines have been pulled from its 222 stores in four states. Perry's stores in Michigan, Indiana, Illinois and Wisconsin started taking the magazines off the shelves last week, spokesman Bert Falbaum said. At Playboy headquarters in Chicago, spokeswoman Robin kJdomski said Playboy hadn't been notified of Perry's decision. "Obviously if they did drop us we're disappointed," she said.

Perry displayed the magazines behind counters with only the titles showing. GREATER LANSING Lansing man to join Hall of Fame $1.30 McDonalds Corp. to open Moscow restaurant MOSCOW McDonald's Corp. said Wednesday it will open its first restaurant in Moscow by the end of the year. The company unveiled a sign featuring that enticing prospect outside a gutted cafe in a prime location on Pushkin Square at Gorky Street, the major shopping area of downtown Moscow.

The square is often the site of political, demonstrations. To meet a demand described as infinite, the first McDonald's in Moscow will be the largest in the world, said George Cohon, president of McDonald's of Canada a subsidiary of McDonald's Corp. of Oak Brook, I1L With 860 seats indoors and out, and more than 400 Soviet employees, it should be capable of serving 12,000 to 15,000 people a day, he said. 1.25 if 1.20 1.15 1.10 fT j. S.

4 12 19 26 3 April May The annual Capital Area Business Hall of Fame induction ceremony is at 2:30 p.m. Friday at Lansing Community College. Edward McRee will receive the 1988 Lansing Regional Chamber of Commerce community service award. He is the 41st person to receive the award. McRee is the president of Ingham Medical Center and president of the Lansing Symphony Association.

MICHIGAN 1.05 1.00 .95 McRee Avon Products shuns Amway takeover bid ADA Avon Products Inc. Wednesday shunned overtures from rival direct-seller Amway Corp. and investor Irwin Jacobs, which have allied and may attempt a takeover of the cosmetics company. James Preston, Avon chairman and chief executive officer, said the company had been notified that Minneapolis-based Jacobs and Ada-based Amway had acquired 10 percent of Avon's common stock. Preston issued a statement declaring, "We want to make it clear that Avon is not for sale." Amway was founded about 30 years ago and is closely held by Jay Van Andel and Richard DeVos.

It has become the second-largest direct sales firm after Avon and says it has more than 1 million distributors vs. Avon's 1.475 million independent sales representatives worldwide. Today's prico for full-serve gasoline El Regular $1.23 Company to invest $1 2 million in textile plants RALEIGH, N.C North Carolina's textile industry received a boost Wednesday with the announcement that West Point-Pepperell Inc. would invest $12 million to expand two textile plants and create nearly 500 jobs. William Farley, chairman of Farley Industries, the parent company of West Point-Pepperell, said the expansions in Hamilton in Martin County and Lumberton in Robeson County will create the new jobs by 1991.

Perry Drug Stores stop selling adult magazines DETROIT The Perry Drug Store chain, citing pursuit of a wholesome image, says Playboy, Penthouse, Gallery and other Unleaded I $1.26 Source: Michigan AAA Local Business People. 7B Lansing Stale Journal a.