The Des Moines Register from Des Moines, Iowa • Page 13

'r, ebc Des fltotnes Better i 1 i Oct. 21, 1981 5B Dow Jones Industrials closed Tuesday at 851.88 UP 475 WKrtlPJl! j8 fetll I I 1 ji jl I lona Deaf eyes Russia Gasoline surplus fuels Winnebago profit report Weidenbaum: Jobless rate may reach 8 interest rates, $26.7 million, or $2.01 a share, a year a it tiv; IMMMt l4Hffl 8' i mm I i lit i it i w-t i i II i rt-i M't-. i I -W 1 i M't I i 'V- i r', I) W41 Recessions, and stock prices RacMsion Interest Stock starting rate market points peaks lows" 12-1-48 2-26-49 6-13-49 7- 1-53 6-6-53 9-14-53 8- 1-57 10-19-57 10-2-57 4-1-60 12-26-59 10-25-60 12-1 69 1-3-70 5-26-70 11-1-73 8-26-74 10-3-74 1-1-80 3-29-80 3-27-80 Average '3-monlh Treasury bill rales Ocjo TnOur Graphic; Souich: Stvttard and Poor National .1 ft 4 444 444- 444 1 HI fii.twrntM It )' Recetsion Int. rate Start ol to peak to recetsion interest stock to stock rate peak market low market low 3 mos 3'i mos. -1 mo 3V2 mos.

mos. 2 mos. 3 mos. 10 mos -7mos. ma.

-5 mos. 6 mos 10 mos. 1 mo. -11 mos. 4 mos.

2 days 4 mos. Kt- n't a n-4 40 Life Investors agents appeal to governor's office Winnebago Industries Inc. of Forest City, made a profit in the latest fiscal year, compared with a loss a year earlier. The motor home manufacturer said a sharp turnaround in sales and profitability for the year ended Aug. 29 was helped by abundant supplies of gasoline, which picked up sales in the year's final three months to $46.2 million from $25.4 million a year ago.

For the full year, Winnebago's sales reached $143 million vs. $92 million. Net Income in the fourth quarter was $4.4 million, or 18 cents a share, compared with a loss of $25,000 a THE BUSINESS TIDED i 111 Compiled JAMES LAWLESS! RwhMr Market Editor year ago. Half of the profit ($2.2 million) came from a tax loss carryforward, the company said. In the full year, Winnebago's net income was $8.7 million, or 35 cents a share, which included a tax-loss addition of $4.1 million, or 16 cents a share.

In the previous year, the company lost $13.5 million. John K. Hanson, chairman, said higher sales and cost reduction programs helped earnings. Motor home sales increased despite the high interest rates, he said, because gasoline was in good supply. He said he expects increases in sales next spring and summer, which should result in improved earnings.

"We closed fiscal 1981 with $23.8 million in cash and securities, providing more than adequate capital for our immediate financial requirements, and we have no long-term debt. Winnebago is in excellent financial condition," Hanson said. Maytag third quarter sales, earnings higher Maytag Co. Tuesday reported higher sales and earnings for the third quarter and first nine months of 1981, compared with like periods a year ago. The appliance maker said it earned $11.1 million, or 79 cents a share, in the three months ended Sept.

30, up from $8.4 million, or 63 cents a share, on fewer shares outstanding a year ago. Sales in the latest quarter were $111.5 million vs. $86.8 million a year ago. The first nine months of 1981 brought Maytag's net income up to $31.1 million, or $2.19 a share, from K. i By MIKE GLOVER Aueclated ru Writer Saying they are "enraged by the neglect" of state insurance commissioner Bruce Foudree, a group of 40 agents of Cedar Rapids-based Life Investors Inc.

Tuesday took their grievances to the governor's office. The insurance agents, who were protesting Foudree's refusal to block a proposed takeover of their firm by a Dutch holding company, were told by Gov. Robert Ray's aide Brice Oakley that their best recourse is in the courts. That's where the fate of Life Investors now rests, pending a decision in federal court in St Paul, Minn. The court last week issued a temporary injunction barring the Dutch company, AGO Holding N.V., from increasing its holdings in the Iowa firm to more than 56 percent from 42 percent The agents accused Foudree of "neglect" and failing to "protect the interests of the people of the state of Iowa." Foudree earlier denied similar allegations made by Life Investors officers.

Spokesman Steve Powell, an agent from Davenport, told the governor's aide that a full hearing is needed into the Dutch company before it should be allowed to take over the Cedar Rapids firm. It is especially important, he said, because 28 percent of the policyholders and 68 percent of the shareholders are Iowans. But Oakley told the agents that the governor, who is in Japan, has a "pre sumption of confidence" in Foudree and had no power to intervene in a ruling. Oakley declined to discuss details of the ruling, noting that the matter is in litigation. "That's the way the process works," he said.

"The governor can't get involved." The agents told Oakley they were upset about a reference in Foudree's ruling to an initial agreement between Life Investors and AGO, in which the Iowa company sold million shares to AGO. Foudree said the sale was kept "secret" until the contracts were signed in December 1979, that the company took advantage of statutory exemptions to avoid Insurance Department scrutiny, and that Life Investors officials "misled" the department by saying the sale would not lead to a change in control of the company. Powell said officials of Life Investors had told state officials about the initial agreement. "He (Foudree) had the opportunity to nix the whole deal before it started," Powell said. In his ruling, Foudree refused to block the transaction, saying he would review the Dutch firm after the transaction is completed.

But the agents said that probe should come before completion of the deal, and said Foudree has "blatantly ignored" In I '4 a- 'it is Ti st 2-! I i I 1 rti i 41 1 I 13 MH 1 I I Wi r. ji i Ml. i U' I I' Hi. i I'U 5t5 fit Wt tl i -Tim interval 2Vj mos. 3V mos.

500-siock index 5Vi mos. Buraau ol Economic Rttaarcn is at 5 8.: i 44- i a a mi ih it i a If iiv i questions being raised by the foreign takeover. Oakley insisted that the only way Gov. Ray would get involved was if questions were raised about Foudree's integrity, or if a change in laws is needed. None of those attending the meeting raised those questions.

Fewer caiilo infeedlofs By KENT PARKER Regttler Atrttuskieu Writer There are fewer cattle in U.S. feedlots than at any other time since 1967, the government reported Tuesday. Cattle and calves on feed in the 23 largest beef-producing states were down 9 percent from a year earlier, according to a quarterly report from the U.S. Department of Agriculture. The report said that there were 9.03 million head of cattle on feed as of Oct.

1. Of that number, 6.17 million head were steers, down 10 percent from the previous year, and 2.84 million head were heifers, down 7 percent from a year earlier. The lower cattle numbers could be a sign for producers that the long-awaited upswing in cattle prices could be just around the corner, but some analysts indicated that many cattle destined for feedlots may still be on pasture or in corn or wheat fields that have been harvested. Iowa cattle feeders have reduced feedlot numbers even more than the national rate, according to the report. Cattle or calves on feed in Iowa lots were down 12 percent from a year ago with a total of 990,000 compared with 1.12 million head at this time in 1980.

The number of cattle going into the nation's feedlots is also down, according to the report Placements in the 23 reporting states during September were down 11 percent from the same period the previous year and 5 percent below the 1979 figure. A total of 5.67 million cattle were placed on feed during September, the lowest since 1974. Iowa cattle feeders placed 235,000 head of cattle on feed last month compared with 230,000 last year. Marketing of cattle was up 4 percent in the 23 states with 5.93 million head going to slaughter during the third quarter of the year. The report estimated that feeders would market 5.49 million cattle during the fourth quarter, 3 percent fewer than 1980 and 5 percent below the 1979 fourth-quarter level.

Iowa feeders marketed 215,000 cattle during the third quarter of this year, 5,000 head more than during the same period in 1980. 50 percent of a portfolio's holdings, with remaining funds in cash equivalents. "We don't expect the stock market to collapse, but for the next nine months at least we expect a better rate of return In government bonds," Victor Melone, a senior vice president, told a press luncheon. The rate of return on a security consists of dividends or interest plus capital appreciation. While investors fret over high interest rates, the sixe of the budget deficit and a slowing economy, they are placing increasing emphasis on corporate earnings.

Digital Equipment, reporting a strong advance in quarterly profits, rose 3 points, to 97. Penn Central climbed 3, to 44, after gaining 2 points Monday. The company reported last week that September quarter profits more than doubled from year-earlier levels. In the transportation sector, Delta Air lines and Union Pacific climbed more than 1 point apiece. as a fiiarko ftprinftd wMi ptrntiuton from Tlw WH Strwt Journal CHICAGO, ILL.

Occidental Petroleum Corp. Chairman Armand Hammer said he plans to visit the Soviet Union next month to discuss the sale of beef processed by the company Iowa Beef Processors Inc. nisudsidiary. Hammer, who has negotiated various trarla norpompnts with the Russians, said in an interview that he hopes to secure a market in the Soviet Union for the subsidiary's meat products. The 83-year-old executive said he has "had conversations" with Soviet officials "but we haven't concluded anything.

I hope to move the talks further along." Following three consecutive poor harvests, the Soviets face a serious grain-supply situation while, at the same time, they are struggling to build their livestock herds. They have depended principally for meat imports on such meat-exporting nations that generally sell beef at lower prices than do VS. producers, such as Argentina. But the apparent seriousness of the Soviets' grain-supply predicament encouraged rumors last week on U.S. commodites exchanges that Occidental already had sealed a transaction with the Soviet Union, similar to its current fertilizer trade accord.

That 20-year agreement, valued at $20 billion, calls for Occidental to supply large quantities of superphos-poric acid to the Soviets, who, in turn, would supply Occidental with an equal amount of ammonia, urea and potash. Speculation among U.S. commodities traders that the Soviets might negotiate a similar swap of, say, oil for meat and poultry, encouraged buying in livestock futures last week. Live cattle futures on the Chicago Mercantile Exchange, boosted somewhat by the rumors, closed one to two cents a pound higher for the week. Hammer denied the rumors that a pact had been struck, but made it clear that he hopes to capture some Soviet business for Iowa Beef.

Occidental acquired Iowa Beef, the Nebraska company that is the largest U.S. beef processor, in August Both companies said then that Iowa Beef should expand its export business, and Iowa Beef said Occidental's foreign-trade capability was among its attractions for the beef packer in the friendly merger. In the year ended Nov. 1, 1980, exports provided about 9 percent of Iowa Beers $4.6 billion sales. Fiscal 1980 net income was $53.2 million, or $5.17 a share.

Hammer said that it's too early to discuss whether the Soviet Union would negotiate a swap similar to its fertilizer arrangement. "Right now they're paying cash" to other meat-exporting countries, he said. He added that he gave Soviet officials samples of Iowa Beef's products during a trip to the Soviet Union in July, and a Soviet minister appeared "receptive to having further talks." Currently, Iowa Beef exports beef by-products, such as tongue and liver, that don't sell well in the United States. The company also sends some boxed beef to Japan, and cattle hides to various European countries. U.S.

consumers reluctance to expand the amount of their incomes spent on beef plus a recession-induced slump in expected spending for all red meats have led some U.S. beef producers and processors to look to exports for market expansion. "In the future, (exports) are where the business will be," an Iowa Beef spokesman said. (I 1M1 Dow Jenei and New York By VARTANIG G. VARTAN Ml New Yerk Tknei NEW YORK, N.Y.

Stock prices moved higher on expanded trading volume Tuesday after retreating in six of the seven previous sessions. Energy, technology, brokerage, airline and defense issues ranked among the market leaders. The Dow Jones industrial average finished at 851.88, up 4.75 points. At 2 p.m. (Iowa time) the indicator was ahead nearly 9 points.

Reports that the Organization of Petroleum Exporting Countries will meet Oct. 19 in Geneva in an effort to unify the price of OPEC oil -reputedly at $34 a barrel provided the main spark for Tuesday's rally. The rationale, as explained by Thomas Mack, an Investment strate gist for Paine Webber Mitchell Hutchins is that in return for a unified price Saudi Arabia would agree with partners to cut its oil production. Such a move, he noted, would tend to erase the worldwide glut that has weakened oil prices this year. Energy stocks gaining 1 point or more Included Mobil, Standard Oil (Indiana), the Sun Superior Oil ARMANO HAMMER Nine-month sales reached $325.2 million, compared with $263.9 million a year ago.

Maytag said that the 1981 figures included the Hardwick Stove which became a Maytag subsidiary Jan. 1, 1981. Auto inventories grew in September Sluggish September sales pushed U.S. automakers' new car stockpiles to a 69-day supply on Oct. 1, up from a 64-day supply a month earlier according to Automotive News.

The industry-wide inventory of 1,426,922 cars actually was down from 1,485,692 cars on Sept. 1, but the stockoile erew in terms of days supply because of a slower selling rate, the magazine said. The situation was improved from Oct. 1. 1980.

when carmakers had 71-day supply. Automakers generally prefer to keep a 60-day supply of cars on hand. Ryder Truck Rental gives GM biggest order Ryder Truck Rental officials say they will buy 5,600 trucks from General Motors Corp. in a $75 million step to upgrade the company's fleet GM said the order is the largest single commercial-truck order in GM history. Included in the purchase will be 4,600 medium-duty trucks and 1,000 light vans.

The vehicles will be distributed to Ryder outlets across the country for rental by individuals and companies. Tax Exempts Mount Pleasant will accept bids until 8 p.m. Wednesday for the proposed sale of $130,000 of General Obligation Bonds to provide funds for street improvements. Iowa Great Lakes Sanitary District sold $2.7 million of General Obligation Sanitary District Bonds to the Harris Trust Savings Bank, Chicago, and the Iowa-Des Moines National Bank, Des Moines, as joint managers, on a bid that provided a net interest cost of 10.6970 percent Two other bids provided net interest costs of 10.7560 percent and 10.8917 percent Lisbon sold $65,000 of General Obligation Bonds to the Carleton D. Beh Des Moines, on a bid that provided a net interest cost of 10.1247 percent.

Three other bids provided net interest costs from 10.6112 percent to 11.10286 percent maybe not even immediately." Some analysts contended weak demand for petroleum products would prevent most crude prices and thus retail gasoline prices from rising any time soon. "It's still going to be a buyer's market for as long as the recession goes on," an oil company official said in reference to economic slowdowns in the United States and much of Western Europe. "I do not think the customer at the gasoline pump or the user of home heating oil need worry about it." The official asked that his name not be used because his company is negotiating a contract with an OPEC country. OPEC is anxious to unify prices to bolster its political clout and halt the decline in its share of the world oil market, which has dropped to about 38 percent from 52 percent as recently as 1977. Western analysts estimate OPEC production has fallen to about 20 million barrels a day in recent weeks, or about 25 percent below year-ago levels.

IDP plans to renovate Dcnison plant DENISON, IA. (AP) Plans for a $4.5 million renovation of its Denison plant were announced Tuesday by Iowa Beef Processors Inc. Plant Manager Bob O'Brien announced the project at a news conference. Earlier, IBP of ficlals met with the City Council asking it to support the project with a $4.5 million industrial bond issue. The council agreed to discuss the request further at its Oct 29 meeting.

The Denison plant was the original IBP beef slaughter facility when it first started operation in 1961. O'Brien said the project includes remodeling of the kill floor plus additional rendering facilities. WASHINGTON, DC. (AP) The Reagan administration conceded Tuesday that a recession now under way could boost unemployment to 8 percent, but it vowed to hold the same economic course rather than turn to "quick fixes of previous administrations." President Reagan's chief economic adviser, Murray Weidenbaum, became the latest senior administration official Tuesday to admit publicly that the economy has slid into a recession. He also predicted that the nation's unemployment rate would rise to "perhaps to the neighborhood of 8 percent" in the coming months, compared with September's 7.5 percent "It does seem the economy has entered a mild recession" that will mean higher unemployment, Weidenbaum said.

This is the price we pay for moving into a less inflationary environment." Other administration economists have predicted that by early next year, the jobless rate could exceed 8 percent, the highest level in six years. An unemployment rate of 8 percent translates into about 8.5 million jobless Americans, 500,000 more than were reported to be without jobs in September. Meanwhile, the Commerce Department reported Tuesday that consumer spending, which had been showing strength for several months, fell in September, providing another indication of a recession. The Commerce Department's chief economist, Robert Ortner, cautioned, however, that September's 0.1 percent decline in personal consump- tion spending was mostly due to erratic car sales, which plummeted after rising rapidly in August Weidenbaum, chairman of the president's Council of Economic Advisers, told a group of businessmen that" Reagan's current program includes a major tax cut and a significant increase in military spending that; will stimulate the economy and create jobs in the long run without fueling a new surge in inflation. "In past administrations, the tendency at about this time has been to go for the panic button: increase government spending beyond that provided for by automatic stabilizers; enact quickie, consumption-oriented tax cuts; push through a variety of Band-Aid-type programs for individual sectors and encourage the Federal Reserve to shift (to a loos-ened-credit policy)," he said.

"I want to assure you in the strongest possible terms that these quick fixes are not going to be part of the arsenal of this administration. Those misguided policies are precisely the type of actions that lie at the root of today's deep-seated, long-run economic problems." Weidenbaum insisted that Reagan's program of tax cuts and budget cuts along with a continuation of the Federal Reserve's tight-credit policy will fight inflation and unemployment at the same time over the longer haul While Weidenbaum was selling the president's program to the business community, other administration officials hinted strongly before Congress that it may be impossible to balance the budget in 1984 as Reagan has promised repeatedly to do. Treasury Undersecretary Beryl Sprinkel told the Senate Budget Committee that enacting all aspects of the president's economic program and balancing the budget by 1984 would be "perfection." "We're unlikely to be able to achieve any of these objectives in toto," he said. Assistant budget director Lawrence Kudlow told the same committee that with a recession threatening to reduce expected federal revenues, budget deficits could swell as much as $30 billion above the administration's current estimates for the next three years. In a related development, Treasury Secretary Donald Regan said the administration is considering a boost in cigarette and alcohol excise taxes and a variety of other ways to increase federal revenues.

IT Other administration officials said the Treasury Department is reviewing proposals that could raise more than $10 billion in 1982, but none has been sent to the president for his consideration. Other major tax-raising plans under study include eliminating income tax deductions for interest payments on virtually all credit except for home mortgages and auto loans, and limiting exemptions for health insurance premiums. Weidenbaum said he expected the economy to turn around sometime next year and begin a robust recovery on its own without any further government stimulus. Private economists have been saying for some time that the economy is in its eighth recession since World War II. But government economists have been reluctant to ac- i knowledge that until Sunday, when Reagan himself announced the apparent arrival of recession.

He said he hoped it would be short and slight OPEC expected to end split on crude oil prices stocks yanked higher NEW YORK, N.Y. (AP) The Organization of Petroleum Exporting Countries will hold a special price-setting session next week, its president said Tuesday. Many analysts believe it will produce an agreement ending the cartel's two-year split on crude oil prices. Indonesian Oil Minister Subroto, who also is president of OPEC, said the meeting would begin Thursday in Geneva, Switzerland, the site of a three-day OPEC session in August that ended in disarray. The cartel's eagerness to meet before its next regularly scheduled session in December underscores the likelihood that OPEC members are ready to agree on a base price for oil most likely $34 a barrel, analysts said.

Saudi Arabia, which accounts for about 40 percent of OPEC production and is the United States' largest source of imported oil, is on record as agreeing to a base price of $34 a barrel. If that becomes the OPEC benchmark, the Saudis would have to raise the price of their top-quality crude by $2 a barrel. The other 12 OPEC members currently use $36 as their base price, but many charge a premium of up to $4 a barrel to reflect quality and transport advantages. "The implication is that crude prices in the United States, which have been softening, will stabilize if not start moving up again," said Eugene Nowak, an oil industry analyst at Dean Witter Reynolds Inc. in New York.

A $34-a-barrel OPEC benchmark would raise the price of much of the oil used in the United States by about $2 a barrel because prices of U.S.-produced and British-produced oil is informally pegged to the Saudi price, Nowak said. Analysts are divided, however, on the question of whether those higher crude prices would immediately result in higher retail prices of U.S. gasoline. Theodore Eck, chief economist for Standard Oil Co. (Indiana), said he believed a $2-a-barrel increase in the Saudi price would cause a 5-cent-a-gallon rise in gasoline prices in the United States.

Nowak said a 2 or 3-cent rise was more likely "and on win F'i STREET and Getty Oil. In the oil-equipment field, Hughes Tool rose 2, to 36. Turnover climbed sharply to 51.5 million shares from Monday's 41.6 million. Overall, advancing issues outpaced losers by nearly 2-to-l. E.F.

Hutton a recurring Wall Street favorite as a rumored takeover target, jumped 4 points, to 46, while its call options also scored good gains. Elsewhere, Merrill Lynch and Paine Webber each showed point-plus advances. Despite the equity market's relatively good performance, the Manufacturers Hanover Trust trust division disclosed that, during this year, it has been moving the asset mix of typical pension accounts under its management away from common stocks and into government bonds. Each sector now accounts for nearly.