Arizona Republic from Phoenix, Arizona • Page 29

'ALL EDITIONS Tte Emmm? The Arizona Republic Sunday, May 10, 1981 .8 look are giving meatpackers new Mergers 1 1 i TO Today Wl Sub for pipeline Submarines could be used to transport oil from the Arctic Ocean once Lougheed Island production begins off Canada, according to Panarctic Oils. Ltd. Current plans call for ice-breaking tankers, but the firm hasn't ruled out using submarines. Airline for sale The Peruvian airline Aeroperu, a money loser since it started in 1973, is being offered for sale to Peruvian and foreign investors. A legislative decree requires the government to keep 35 percent of the shares, but the rest will be sold.

Gas-decontrol study A study done for natural-gas producers main- tains immediate decontrol of prices for the fuel eventually could cut oil lmporte by 2 million to 3 million barrels daily and inflation by little woui more than 0.05 percent in its year of greatest impact. However, the study by the Natural Gas Supply Association is greatly at odds with other recent reports on the price impact of immediate decontrol, as compared with the gradual decontrol taking place under current law. Exxon settlement Exxon Corp. and Gulf Oil Corp. have reached an out-of-court agreement on a disputed uranium contract to replace a pact that calls for Exxon to supply Gulf with reduced quantities of uranium on revised terms.

Uruguay plane purchase has delivered to the Beechcraf VC' -ft Kathleen Reeve Republic conglomerates to reassess acquisitions in an earlier, more bullish decade. managerial attention are causing several Cattle aren't the only ones being slaughtered the meatpacking industry. Low returns on spinoff "will enable LTV management to concentrate on manufacturing and high-technology industries and move away from the consumer business." Wilson, which is based in Oklahoma Pity and is the nation's largest producer of fresh pork and lamb, has 10,000 employees and 13 plants, three of which will be closed in October. Two weeks ago, Chicago-based Esmark Inc. completed a spinoff of 24, By Susan Carey Republic Staff "Low expenses and maximum return from.

every pound of the live animal are what made G.F. Swift a leader in the new industry of which he was a founder." Those words, written more than 50 years ago by Louis F. Swift' in a of his father called The Yankee of the Yards, catty some real irony in Some of the old-line meatpackers who took Chicago by storm in the late 19th century now are finding themselves saddled with high expenses and minimal return the antithesis of Swift's success model Three venerable companies Wilson Food Swift Co. and Cudahv Foods Co. are in the nrocess of being divided and un loaded by their corporate parents, Armour Co.

also is struggling to fmd its niche in the wildly cyclical, low-margin industry. Closing plants, switching product emphasis and re-evaluating- union, contracts are the order of the day. Although these machinations may be causing a stir on Wall Street and in the close-knit world of packing houses, consumers should not see a difference in the grocery store. "As long as there are people eating (meat) there have got to be people supplying (it)," said Bob Young, who buys meat for 69 Safeway stores in Arizona, Plant closures are not creating shortages, but wholesale buyers "might have to reach out farther" for meat supplies, Young said. The meat business employs about 1,700 workers in Arizona, out of a total labor force of more than 1 million.

If Cndahy's Phoenix slaughter- Cattle co-op Beef-feeder group finds imitation breeds success TOLLESON When Southwest, Cattle Co-op Inc. reopened the Swift Co. beef slaughterhouse last year, did more than just remove the letters IFT from the sign out front. Southwest rejected tradition and set out to emulate the modern, No. 1 beef packer in the nation, Iowa Beef Processors Inc.

The consortium of Arizona cattle feeders enthusiatically and unabashedly models itself after the Iowa concern. "IBP are the innovators," said Tom Morse, vice president and chief operating officer of Southwest. "The rest of us are followers." The ingredients in the formula are an efficient, automated plant, spe: Republic Southwest Cattle Co-op Inc. purchased the Swift Co. slaughterhouse for million last year.

I in Uruguyan navy' three aircraft that are international versions of a U.S. Navy training plane. Uruguay is the seventh foreign nation to have Jvt bought the turbine-powered aircraft. li It hlK-JL SI Lit I I it 'V-f i '-4 4 "(v llllli 'V Mrn 'I i equity, high demands and unstable sales energy and shipping conglomerate announced plans to spin off its Wilson Foods Corp. unit into a separate company.

LTV which acquired the fourth-largest meatpacker in the country in 1967, will rid itself of Wilson in June by awarding- LTV stockholders one share of Wilson for every 10 shares.of LTV. held. There are 43 million LTV shares outstanding. A spokesman said the Wilson dog's lead The Tolleson plant, 651 S. 91st how kills 5,000 to 6,000 head of cattle a week and.

can double that if supply goes up. About 1,500 head of the weekly kill are boxed deboned, trimmed and sorted into various cuts for wholesale buyers. Southwest the largest beef-slaughtering plant in the western third of the nation and is "the only plant west of Texas that has the capacity to kill cattle in the same magnitude as IBP," Hughes said. The company reported "substantial" earnings on revenues of $300 million in 1980, Morse said. Hughes said that in a few other states, groups of cattle feeders have banded together to operate their own slaughterhouses.

Other groups are. considering the idea. But, McGill said, "I don't think there are that many locations in this country where this can work on a major scale. Many plants (that have been closed by old-line packers) are not Worth buying." Arizona pork feeders are thinking about building their own slaughterhouse in Coolidge, said Bob Hanne-man, executive director of the Arizona Pork Producers Association. "Our production' is greater than what Cudahy is killing," Hanneman said.

When that plant closes, all the hogs will have to be shipped out of state for slaughter, an expensive proposition, he said. Susan Carey 'People have to security officer says Food stores By Linda Stowell RepublicStaff Shoplifters aren't just kids swiping candy bars, they can be anyone. And the thieves don't, discriminate; apparently all Valley grocers are hit regularly. "Supermarkets are the most susceptible to shrinkage (loss) due to theft because people have to eat," said James Sims, security for i- it, I 5K. 5 pi its Swift Co.

fresh-meat division through a public offering of .2.7 milhon shares of common stock. Swift founded in 1855 by Gustavus Swift, had grown into a diversified corporation involved in meat, oil, fertilizer and other products. Esmark was created in 1973 as a financial holding company, and Swift merged into it. Last year, Esmark decided to get out of the unpredictable, production- Future cut, C2 Republic shoplifting shoplifting, armed robbery, check forgery and stealing by employees and vendors. 4 The dollar amount of the losses is difficult to pin down.

"I don't even want to know how much they're said Will Gordon, owner of Gordon's Food Market Inc. at 301 W. Roosevelt. Shoplifting, C2 city nears aimed at protecting the environment; are being enforced more strictly. As a result, at least 18 states have "right to farm" laws designed, to insulate farmers from legal hassles.

A few states enacted such laws in, the early 1970s, but most were passed in the last two years. Farmers say their citified neigh bors move in with fuzzy ideas about a bucolic country life that never 'existed odor-free and fitting into the 9-to-5day. rural realities, though, include smelly fertilizers, herbicides -and farm machinery that sometimes labors late into the depending Farmers, Cll house closes as planned in August, about 37Q hourly workers and 80 salaried employees will lose their jobs. Both Ctidahy and Armour are based in Phoenix. Swift operated a beef-kill plant in Tolleson for nine years before closing it in 1977.

The old-fashioned industry's growing pains are being felt far and wide, and recent developments have speeded that process. Last week, a Dallas-based steel, follows top cialization in beef, a rein on wages and corporate expenses and location near the source of cattle, Morse said. What makes Southwest different from IBP is the fact that the feeders own and" operate the plant in which their cattle are killed. The need for a local slaughterhouse became apparent when Swift Co. closed the facility in 1977, said Jim Hughes, chairman of the co-op.

The' Cudahy Food Co', slaughterhouse in Phoenix and various inde- pendent packers, around the state could not handle the volume, Hughes said. Cattle feeders were forced to limit the number of cattle raised and send some of their animals to Texas for slaughter. So the feeders got together, formed a cooperative and purchased the plant, then 9, years old, for $5.5 million. They spent an additional $2.8 million on improvements and opened for business in June. "It took foresight on the co-op's part to take the riek," said Maurice McGill, a partner in Touche Ross Co.

and director of meatpacking-industry services for the accounting firm. McGill said the future of the state's cattle mdustry and related businesses depends upon the plant's continued operation. When the Cudahy plant closes in August, Southwest will become even more important. That is the theory. But it does not always hold true, according to industry analysts and some utility companies.

Consciously or not, some rate-making bodies have passed the benefits of outside earnings on to the consumer in the form of lower monthly utility bills, rather than to the investor who often provided J.he funds and accepted the risk for these outside ventures, it is said. "In most cases, it's subliminal," said Dr. Terry A. Ferrar, vice president of the Edison Electric Institute, the utility-company trade association. "In some states, the commissions are inclined to look at the profits of an unregulated subsidiary and include it in the calculations either explicitly or implicitly" when, determining rate structure.

And that's a significant disincentive to diversify." Or, as William Glynn, financial vice president of the Montana-Dakota Utilities which receives 25 percent of its earnings from a coal mine and from oil-property royalties, noted, "On a consolidated basis, our company is earning about the industry average of 11 to 12 percent return on equity. "We have a 3 to 8 percent on our utility business. That speaks to itself as to 'What some of the jurisdictions that regulate us are doing." Utility, C4 Southwest Cattle Co-op Inc. in Tolleson deals in boxed meat. The beef is deboned, pre-cut, sealed, sorted and sent in quantity to wholesalers.

Birthday coin A bill to author ize a silver coin commemorating George Washington's 250th birthday has been approved unanimously by a House subcommittee. The half-dollar coin would be the first U.S. commemorative coin since 1954. The proposal calls for minting 10 million coins with a composition of 90 percent silver and 10 percent copper. Air-defense weapon The Army picked Ford Aerospace and Communications Corp.

to produce a major new air-defence weapon for a fast-moving division, a program which could be worth! $51 billion. Administrator 'named Everett Rank, a California farmer, has been appointed administrator of the Agriculture Department's Agricultural Stabilization and Conservation SerV ice. The job pays $50,112 a year. Rank is also executive vice president of the Commodity Credit Corp. Energy study A study ordered by former energy secretary and later quashed by the Energy Department concludes the country can cut energy use 25 percent in the next 20 years and still prosper.

The study was obtained by a New England publisher an) produced in book form as A New Prosperity: Building a Sustainable Energy Future. Women at work A national study reveals that women are in the work force to stay, not only to help support their families but to achieve personal satisfaction. The study was financed by General Mills Inc. and conducted by Louis Harris and Associates Iiic. of New York.

Import restrictions House Speaker Thomas O'Neill, and a delegation of congressmen told special trade representative William Brock they want a three-year exten-. sion of restrictions on shoe imports from Taiwai) and Korea. Investment in research A Library of Congress study says small federal research investments in heavy oil, unconventional gas and alcohol fuels could pay big dividends between now and the year 2000. The study says they are the most promising and cost-effective sources of additional energy supply over, the two coming 'decades. Oil suit challenged Interior Secretary James Watt has decided to contest an oil firm's suit challenging an agency decision to cancel a $1-'per-acre lease on Fort Chaffee, Ark.

The government contends the was obtained without competitive bidding. Mergers predicted The chairman of American Motors Corp. 'predicted a turnaround in domestic auto sales in the next 6 to 24 months 'but said many independent auto-j makers will have to merge to survive fover the next two decades. Gerald Meyers estimated pent-up demand 3.5 million to 4 million cars a year. it Utilities worry about losing profits from diversification report rise in manager for the Phoenix division of Safeway.

"Grocery stores have items that are easy to conceal, and with the cost of living going up, theft is on "the rise." Five of the Valley's largest supermarket chains and several established smaller markets agree that theft is the No. 1 problem facing supermarkets. It includes studies at the Department of Agriculture. Many rural newcomers work in cities and towns, he said, and have moved to the country to look for a better life. As more people choose rural living, the number.

of nuisance suits brought against farmers is increasing. (A in this sense is any activity that unreasonably hinders another person's right to use and enjoy his property.) In some cases, farmers are fined or forced to close or change their 'operations because their neighbors claim the dust or smell of the 1 farm is objectionable. In addition, state and local regulations, mainly Nuisance suits growing along exodus Farmers 'pressured' as New York Timed NEW YORK Montana Power Co. does more than sell the electricity that lights homes and powers factories in the Big Sky state. It also drills for oil, leases Canadian natural-gas properties and mines for coal in Montana, Wyoming and Texas.

These non-utility activities account for about half of Montana Power's earnings, have lifted its bond rating and have kept its stock price high. Although Montana Power is more diversified than most, more utilities are turning to non-utility ventures to increase earnings everything from real estate to barge transport, fish hatcheries and pipelines.vBut, however attractive, diversification is a route paved with uncertainty. The main uncertainty is whether state rate-making bodies will use the earnings from these non-utility ventures as a basis for denying or reducing requested rate increases. As a result, utility-company diversification has stimulated much talk within the industry but rarely is practiced. The general rule is that rate-making bodies can regulate only those activities directly related to the utility's monopoly public service the generation -of power.

The non-utility end of the business is not regulated, and the profits from these activities cannot be used to determine whether to grant a rate hike or to determine its size. 3J Christian Science Monitor There's a new kind of "range war" brewing in pastures and fields across rural America. It isn't a battle over cattle or sheep, fences or open plains; it's a conflict over how farmers use their land where a growing number of non-farmers are staking claims. The 1980 census showed that for the first time in more than 160 years, the population-growth rate in rural and small-town communities of the United States was greater than in metropolitan areas. But only about one in eight rural residents now lives on a farm, said Calvin Beale, in charge of population HI tit.