50
Wednesday, August 31, 1994
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NATION/WORLD
UNIVERSITY DAILY KANSAN
Defense companies merge
The Associated Press
LOS ANGELES — The merger of defense giants Lockheed Corp. and Martin Marietta raised fear of layoffs in recession-weary California and other states where the companies are economic mainstays.
The $10 billion merger is expected to result in some job eliminations, company officials said. Workers wond-erd and officials didn't say.
dared — and officials didn't say where, when and how many.
"I am concerned, not only for my job, but for other jobs here," said Steve Cantrell, an administrative analyst at Lockheed's Marietta, Ga., plant. The new company, Lockheed Martin, will become the nation's largest defense contractor, with 170,000 employees and $23 billion in annual sales.
Executives of the companies, which sell defense, space and other hightech products to government and civilian customers, said the merger will allow them to cut costs.
There were no immediate plans for layoffs pending completion of a transition study, said Steve Chaudet, Lockheed's vice president for public affairs.
However, the 260 employees at Lockheed's headquarters in suburban Calabasas, Calif., already have been warned in a memo that some may lose their jobs and others will be transferred when the headquarters for the new company exists in Martin Marietta's Bethesda, Md., offices.
For nearly a week workers have heard rumors of some impending change, but none knew the specifics until Tuesday, said Annette Steifold,
associate director of market research.
"it's been a building crescent for the past few days. Because there was nothing definite known it was just speculation and the usual, 'What's in it for me, how's this going to affect my life,' she said.
News of the merger drew a similar response at Lockheed Missiles & Space Inc. in Sunnyvale, Calif.
"Some people are very optimistic and excited about the new opportunities and in others I sense apprehension," she said.
"People don't know for sure what will happen. There's a lot to look at and a lot of things to discuss. Right now the reaction is still, "Gee," said engineer Robert Garcia, who learned of the merger from a newscast while
cut jobs
The merger, which still must receive regulatory and shareholder approval, reflects a trend of consolidation among defense contractors as U.S. military spending continues to shrink in the post-Cold War era.
driving to work.
The timing couldn't be worse for California, just beginning to show signs of recovery from a five-year recession largely brought on by those very cutbacks.
"It's just another indicator of the major turmoil and restructuring that's going on in the aerospace industry," said Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles County. "This is not the last shoe that's going to drop. We can just hope the next one doesn't drop on California."
Tide of Cuban refugees slowly begins to ebb
The Associated Press
WASHINGTON — One week after more than 3,200 Cuban boat people headed for U.S. shores in a single chaotic day, a series of encouraging developments have Clinton administration officials breathing somewhat easier.
"Growing numbers of Cubans understand that they will not come to the United States if they are picked up
U. S. officials attribute a sharp drop in the numbers of boat people in the last few days to a combination of bad weather and round-the-clock appeals for Cubans to stay home.
in the Straits of (Florida)," Undersecretary of State Peter Tarnoff said Monday night.
By then, only 118 Cubans had been intercepted by the U.S. Coast Guard throughout the day. The final tally for Monday was 295.
Tarnoff also said Cuban authorities have begun to take "some small steps" to counsel Cubans not to flee by boat. Until now, the authorities did nothing to dissuade Cubans from leaving so long as they did so in their own vessels.
minors aboard be prevented from leaving Cuban shores. The White House and State Department welcomed the move.
And Panama's incoming foreign minister, Gabriel Lewis Galindo, said his country is willing to receive up to 10,000 Cuban refugees for six months if the United States houses them at American military bases along the Panama Canal and takes responsibility for them.
In addition, President Fidel Castro has ordered that any vessel with
Another encouraging sign, Tarnoff said, is that about 225 Cubans of the more than 13,000 taken to the U.S. naval base at Guantanamo Bay, Cuba.
have asked for permission to return home.
Tamoff, interviewed on PBS "MacNeil-Lehrer News Hour," said arrangements for their return will be discussed with Cuban officials today or Thursday when U.S.-Cuban migration talks resume in New York. The last such talks were held in December.
Michael Skol, the second-ranking official in the State Department's Latin America bureau, will head the U.S. delegation. He will be joined by Justice Department and immigration officials.
Deal could push up prices of insurance
Catastrophic plans would replace them
The Associated Press
WASHINGTON — The health reform plan offered by House Republicans could make standard health insurance so expensive that many people would be driven into minimal-coverage catastrophic plans, congressional analysis says.
House Republican Leader Bob Michel of Illinois proposes expanding the availability of catastrophic health insurance plans that would kick in after an individual had spent $1,800, or a family, $3,600, on medical expenses in a year.
Tocover out-of-pocket expenses, Michel's plan, developed with Sen. Trent Lott, R-Miss., would allow individuals to establish tax-sheltered medical savings accounts, similar to Individual Retirement Accounts.
But, in a 10-page analysis released Monday, the Congressional Budget Office cautioned: "In the long run, the existence of any type of catastrophic-plus-MSA (medical savings account) option that would be attractive to a large number of people could threaten the existence of standard health insurance."
Michel is pressing Democrats to use his plan as the basis for congressional action, now that House Speaker Thomas Foley, D-Wash., has conceded Congress is unlikely to pass the kind of broad plan proposed by President Clinton.
The agency said Michel's plan would reduce the budget deficit by $11.3 billion over 10 years, but said it would do almost nothing to curb growing health care expenditures and would do little to expand insurance coverage.
Michel's plan would allow self-employed people to fully deduct their health premiums. It would limit awards for medical malpractice, require employers to offer, but not pay for, insurance, and restrict the ability of insurance companies to deny coverage to sick people.
However, the CBO said the catastrophic option pushed by Michel could prove attractive not just to the uninsured employees of small businesses but also to relatively healthy individuals, who expect few out-of-pocket expenses.
If that happened, the people left in standard plans would be those who are sicker and older, driving standard-plan premiums so high that even sick people would find it cheaper to opt for catastrophic plans, the CBO said.
It said 2 percent of the population,5 million poor children and 2 million poor adults, could acquire coverage as a result of subsidies Michel proposes.
Dole wants GATT delayed
The Associated Press
WASHINGTON — Sen. Bob Dole says Congress should postpone a vote on a new global trade agreement until next year.
Dole's position represents a serious obstacle to the Clinton administration, which has insisted Congress approve the accord negotiated under the General Agreement on Tariffs and Trade before it adjourns in early October.
If successful, Dole's effort would represent another victory denied the president going into the Nov. 8 midterm election in which Republicans threaten to win control of the Senate.
Democrats already are conceding it is unlikely Congress will enact the kind of broad health-care
reform Clinton wanted. They must campaign for re-election based on the anti-crime bill passed last week and anything else they can enact.
Dole said he favored the 123-nation GATT agreement but believed enough questions had been raised that it would be better to defer approval.
"We should not race to complete a major trade bill until we know what awaits us at the finish line," he said in a signed piece published in The Wichita Eagle on Sunday.
To take effect, the accord must be ratified by its signatories by June 30. But Clinton administration officials have pressed for approval this year, saying delay could hearten GATT opponents in other countries.
New home sales up, though slowing
The Associated Press
WASHINGTON — New home sales rebounded in July, but analysts said the trend is for slower growth in a sector of the economy that is particularly sensitive to rising interest rates.
New home sales surged 8.3 percent in July, the government said yesterday, and the rates for May and June also were revised upward. Still, the June level was a 15-month low, and the July sales were still well below December's peak.
"The July rebound is making up some ground, given the huge drop in June," said economist Robert Dederick of the Northern Trust Co. in Chicago. "The basic message we've passed over the top of the market and we've begun to descend. But there's no reason to believe it will be precipitous."
Meanwhile, the Conference Board said its widely followed survey showed that consumer confidence in the economy has dropped for the second straight month in August. The index fell to 89.0 from a revised reading of 91.3 in July and 92.5 in June, which was the highest level in four years.
Most analysts agreed that the five increases in interest rates by the Federal Reserve since February are taking a toll on the housing market.
"Clearly we're showing the effects of rising interest rates," said Jim Irvine of the National Association of Home Builders. "If they continue to rise, we'll have significant problems."
The Departments of Housing and Urban Development and Commerce said sales of new homes, which
declined a revised 11.4 percent in June, totaled a seasonally adjusted annual rate of 664,000 in July.
All regions of the country except the Midwest took part in last month's recovery, which most analysts predicted.
The June rate was revised to 613,000, up from an initial estimate of 591,000. Still, the higher figure was the lowest level since the rate was 600,000 in March 1993.
The annual rate for new home sales peaked in December at 817,000 in response to the lowest mortgage rates in a generation.
The government previously reported that sales of existing homes slipped slightly in July, but construction of new homes was up from June.
aged 8.62 percent in July, up from 8.43 percent in June and 8.6 percent in May. Rates hit a 25-year low of 6.74 percent last October, according to the Federal Home Loan Mortgage Corp.
Rates averaged 8.56 percent last week.
Fixed rate 30-year mortgages aver-
This year's nearly two percentage point increase adds about $200 to the monthly payment on a $150,000 mortgage.
But some analysts say the greater availability of adjustable rate mortgages is blunting the impact of higher rates by allowing buyers to pay less in the first years of new home ownership.
Whitewater investigators reinstated
Bipartisan pressure significant in move
The government said sales of homes during the first seven months of 1994 were 6.6 percent above the same period last year.
The Associated Press
inquiry into several unspecified on-the-job allegations.
WASHINGTON — Amid mounting questions from Congress, the Resolution Trust Corp. has put a key Whitewater investigator and two superiors back to work following a two-week suspension, officials said yesterday.
Investigator Jean Lewis and her bosses, Richard Iorio and Lee Ausen, returned to their jobs Monday at RTC's office in Kansas City, Mo. They were placed on paid administrative leave Aug. 15 during an internal
Agency spokesman Steve Katsanos said the initial review has been completed and results turned over to RTC Inspector General John J. Adair.
"We felt there really were some things that ought to be investigated," Katsanos said.
Mike Forshey, Ms. Lewis' attorney, said none of the three have been informed of the allegations against them. He said it was odd they were returned to work, particularly in light of last week's letter from top Democrats and Republicans on the Senate Banking Committee raising questions about the probe.
politically sensitive time, just after Congress held its first round of hearings into the failed Madison Guaranty Savings & Loan, its links to the Whitewater land venture in Arkansas and President Clinton and Hillary Rodham Clinton.
Ms. Lewis recommended in 1992 that prosecutors consider criminal charges following her investigation of check-kiting at Madison. The Clinton weren't accused of wrongdoing.
The personnel action came at a
The improprieties involving the three RTC officials reportedly include a secret tape recording, misuse of time sheets and compensatory time, use of RTC equipment for personal reasons and questionable business trips.
The Associated Press
Government agrees to help automakers
DETROIT — A partnership between the government and the Big Three automakers to develop 80-mile-a gallon cars will help U.S. carmakers fight foreign competition as well as clean up the air, a top Commerce Department official said yesterday.
"The end result should be a domestic auto industry . . . capable of meeting any of the challenges from without," said Mary L. Good, undersecretary of commerce for technology and the Clinton administration's lead player in the Partnership for a New Generation of Vehicles.
But the head of a trade group that represents foreign automakers in this country contends the government has been shortsighted in limiting the partnership to General Motors. Ford and Chrysler.
"We are the industry, as much as General Motors and Ford," said Philip A. Hutchinson Jr., president of the Association of International Automobile Manufacturers.
"we build more cars in America today than Ford, three times as
many as Chrysler," he said, referring to the U. S. plants that build Hondas, Toyotas, Nissans and other Japanese名牌.
"Our members are technological leaders," Hutchinson said. "We've offered our willingness to participate and thus far that hasn't been accepted. ... It's ironic that you wouldn't want some of your best players participating in these programs."
The partnership, announced last fall by President Clinton, focuses federal research dollars and money from the Big Three on development of a car that has three times better fuel economy than today's vehicles.
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