T he P u r it a n i ) O bserver « J uly 17, 1996
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BUSINESS
Japan Buys Record $22
Billion On U.S. Car Parts
Our Children, Our Destiny
Japanese purchases o f U.S. car
parts hit a record o f nearly $22
billion in the last business year,
fuelled by production shifts to North
America and increased safety con
sciousness in the Japanese market.
Figures released Friday showed
that purchases o f U.S. car parts by
Japanese carmakers rose to nearly
$22 billion in the year that ended on
March 3 1, up from a record $ 19.86
billion in the 1994/95 fiscal year.
“An increase in shifts o f produc
tion facilities to North America by
Japanese carmakers and increasing
installation o f air bags made with
U .S. components as standard equip
ment, boosted Japanese purchas
es,” said a spokesman from the Ja
pan Automobile Manufacturers’ As
sociation.
The association said it would
provide details o f the purchases of
U.S.-made car parts and materials
Monday.
In January 1992, when then U.S.
BRIEFS
Anxiety On Wall
Street
The long anticipated correction
in the stock market may be taking
place. The Dow plunged 161.05
points, or2.92 percent, to 5,349.51
yesterday. The Nasdaq index also
took a hit, tumbling 43.30 points,
or 3.92 percent, to 1,060.19. The
selloff left analysts wondering
whether the market is starting a
downward trend after years of
gains.
Market Anticipates
Intel News
In what may be the most widely
watched earnings report o f the sea
son, microprocessor giant Intel
plans to report its second quarter
results after the market closes to
day. Analysts say the current earn
ings estimate for Intel’s second
quarter is $1.09 a share, versus
$0.99 a share a year ago.
Tl Shares Earnings
Texas Instruments is due to re
port its second quarter earnings
today. Analysts say the report will
be disappointing at best and dis
mal at worst. Investors didn’t wait
for the bad news. Shares o f Texas
Instruments fell in heavy trading.
GM To Release
Earnings Report
General Motors today is ex
pected to post an earnings increase
for the second quarter. Analysts
say GM should report earnings
from continuing operations o f just
over $2 billion, or $2.50 a share,
compared to just under $2 billion,
or $2.39 a share in the year-ago
period.
Cuba Decision
Due Today
PresidentClinton is expected to
announce his decision today on
whether to implement a provision
o f a tough anti-Cuba law. Clinton
is stuck between a rock and a hard
place. On one hand, the U.S. wants
to hit Cuba where it hurts by dis
couraging foreign investment in
the communist-ruled nation. On
the other hand, Washington wants
to appease Canada and European
allies. The European Union has
threatened retaliatory measures if
C linton does not waive a provision
o f the law that would allow law
suits to be filed against foreign
firms that buy or sell American-
owned property that was seized by
Cuba.
Mitsubishi To
Hire Expert
Mitsubishi Motors o f America
has scheduled a news conference
today in Chicago, reportedly to
announce the appointment o f an
affirm ative action expert. The
Chicago-Sun Times says an assis
tant to the president o f Illinois
State University has been hired to
address harassment allegations at
the Mitsubishi plant in Normal.
Tobacco Companies
Sue Utah
The major tobacco companies
are trying a new tactic in their legal
battle against states that are suing
the industry. Philip Morris, RJ
Reynolds Tobacco, Lorillard and
Brown & Williamson have filed a
lawsuit against Utah. They’re try
ing to block Utah from joining the
ranks o f states that have sued the
industry to recover health-care
costs o f smokers.
Delta Plans
Budget Unit
Delta Air Lines plans to launch
a new low-fare service this fall.
It’s called "Project Sunshine’’ and
it’s aimed at the Sunshine State.
Delta already has 200 daily flights
in and out o f Florida. But a Delta
executive says the new service will
have lower costs and offer lower
fares than the main airline.
Summer Employment Program participants at work in the community.
The Urban League o f Portland,
Key Bank o f Oregon and 46 other
companies have joined forces to fund
the fifth annual Summer Youth Em
ployment Program, “Our Children,
Our Destiny” . The program is pro
viding jobs for 25 teenagers from
Northeast Portland during a summer
in which jobs and educational offer
ings for high schools students are
proving harder to find.
Youth in the program do yard
care and maintenance work on homes
occupied by low-income senior cit
izens in North/Northeast Portland.
Th is year the program has more spon
sors and more jobs than ever before.
The program began in 1992 with
one sponsor. Key Bank o f Oregon.
Since then, Key Bank has issued a
challenge to other local businesses
to join in supporting the program.
This year 47 companies have taken
on that challenge contributing over
$45,000. Major contributors include,
Key Bank o f Oregon, Harder Me-
chanical Contractors, Inc., North
west Pipe Company, Shari’s Restau
rant, Pacific Coast Fruit Company,
Embassy suites Hotel, Gunderson,
Inc., Blue Cross Blue Shield, Milne
Construction, Legacy Emanuel, Hy
dra-Power Systems Inc., W illamette
Industries, Ackerly Outdoor Adver
tising and Schwabe W illiamson &
Wyatt. In addition, 18 companies
have made in-kind donations to the
program.
The project is operating between
June 17 and August 9. An Awards
Banquet will be held on August 8 for
youth in the program, seniors they
assisted, and program sponsors.
"In all my years o f supporting
community and civic projects, this is
by farthe most personally rewarding
program I have been involved with
to date. This program is a win both
for youth and for seniorcitizens. My
hat is o ff to those 46 other com pa
nies and individuals who stepped
forward to make this year so suc-
cessful,” said Terry Tracy. Key Bank
Executive Vice President o f Admin
istration. This year the number of
youth crews is up to five. The cost of
employ one youth for the summer is
approximately $2,600.
Urban League President Law
rence J. Dark noted that the program
continues to have a positive impact
on youth, even after the summer
ends. "Clearly, this program instills
in our youth work skills and experi
ence that wil I help put them on a path
to a career.”
The youths work with an adult
supervisor Monday through Thurs
day, doing landscaping work and
small maintenance jobs for low-in
come seniors.
Many seniors have difficulty keep
ing up with yard work during the
summer. With limitedsummerschool
options this year and summer jobs in
short supply, the program is meeting
an important need forNortheast Port
land teenagers.
President George Bush visited To
kyo with the heads o f the U.S. "Big
Three” carmakers, the Japanese car
industry se, a purchase target o f $ 19
billion worth o f U.S.-made car parts
and materials in 1994/95 for use at
home and in its U.S. plants.
The Japanese carmakers did not
disclose a purchase target for the
1995/96 year because Washington
regarded the 1994/95 figure as a
pledge, while Tokyo saw it as a
voluntary target.
Production o f cars and trucks by
Japanese makers in North America
rose 6.6 percent from a year earlier
to 2.75 million units in calendar
1995, according to industry data.
Japanese carmakers have not said
when they will provide details on
their car part purchases in 1995/96.
Japan’s top carmaker, Toyota
Motor Corp, bought $5.69 billion
worth o f U.S. car parts and materi
als in 1994/95, up from $4.65 bil
lion the previous year.
Atlanta To Net $1 Billion
It may bejunk, but Atlanta’s Olym
pic souvenirs are selling well.
The Atlanta Committee for the
Olympic Games (ACOG) said on Fri
day its licensing campaign was the
most successful in Games history, and
was on target to raise $ I billion.
ACOG said in a statement the sale
o f licensed products, described as
junk last month by Organizing Com
mittee Co-Chairman and former U.S.
ambassador Andrew Young, would
net twice the revenues o f the 1992
Barcelona Games.
“ Licensing revenues are expected
to generate $75 million or more to
ward the cost o f the Olympic Games,”
ACOG said
Young told city tourist officials
last month he was amazed by the
amount o f money being raised by the
sale o f official ACOG products.
“ I thought that was pretty ambi
tious, to say we would sell $100
million worth ofjunk. You know, T-
shirts, hats, buttons, that type o f
thing,” Young said.
The Atlanta Games are the most
commercialized ever, ACOG are sell
ing sponsors the right to put the Olym
pic rings on everything from game
shows to hamburgers.
Critics say ACOG has overdone
the sponsorship, but the committee
defends its action, pointing out that it
has succeeded in raising the $1.7
billion it needed without resorting to
public funds. Atlanta is littered with
enormous billboards promoting the
sponsors o f the Games and souvenir
shops, stalls and street stands are
preparing to do a roaring trade dur-
m gtheJuly 19 to August 4 centenary
Olympics.
Intel To Lower Pentium Prices
Intel Corporation said it will low-
erpricesof its retail-oriented Pentium
processors by cutting more aggres
sively in August and canceling price
cuts in November to help PC makers
satisfy pre-Christmas demand.
Intel said the move, which it will
spell out in detail to customers in
August, is designed to create a more
stable price and ordered environ
ment during the key final calendar
quarter, which is the most important
selling season o f the year.
“It’s all going to be dependent on
the mix and the volume and with those
kind of variables- and then you throw
in timing as well— it’s impossible to
predict with any accuracy,” he said.
Wholesale Prices Rise In June
Retail sales fell in June and whole
sale prices rose only modestly last
month, the government said Friday,
in two reports that soothed but did
not cure inflation jitters on Wall
Street.
The Commerce Department said
retail sales declined 0.2 percent to
$205.2 billion last month, as demand
foreverything from new cars tocloth-
ing waned after several months of
strength. Sales had risen a brisk 0.8
percent in May.
Separately, the Labor Department
said the Producer Price Index edged
up 0.2 percent in June, after a 0 .1
percent May decline. Energy costs
fell last month after rising earlier in
the year but food prices strength
ened.
Excluding volatile food and en
ergy prices, prices at the wholesale
level also rose 0.2 percent after being
unchanged in May, the department
said.
Analysts said the data helped ease
investors' worries that the Federal
Reserve would raise interest rates in
the next week or two, but that a rate
increase was still likely later this
year. By raising rates, the central
bank hopes to ward o ff a pickup in
inflation, analysts said.
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“Prices are still very well be
haved," said economist David Jones
of Aubrey G. Lanslon and Co.
“The producer price report pro
vides the Fed no leverage whatso
ever for raising interest rates at this
time,” said Ron Schreibman, vice
president of the National Associa
tion of Wholesaler-Distributors.
Some investors have said Fed
policy-makers would take the un
usual step of raising rates before their
next meeting on Aug 20, following
last week’s report of a sharp rise in
hourly earnings and a drop in the
unemployment rate to 5.3 percent,
the lowest level in six years.
The drop in June retail sales fol
lows strong gains earlier this year
and could point to slower growth in
the second half as consumers spend
less, analysis said. Most analysts said
the economy grew strongly in the
second quarter.
"This number shows us the con
sumer is not Superman, that there is
some vulnerability here,” said Chris
topher Low, a senior economist at
HSBC Markets.
"This weakness comes just at the
right moment and the likelihood of a
Fed move in th e n e a r fu tu re has been
diminished,” he added.
“ L ast W e e k , W e
W a l k e d I n t o U.S. B a n k
A n d L e f t W it h
2 B e d r o o m s A n d A B a t h .”
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