NEWSPAPER
© Entire contents co pyright 1985 by Crain Communications Inc . All rights reserved.
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PAGE 11 ~ Detroit
TV stations make it in Moose Jaw
PAGE 22
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Top area accounting firms PAGE 12
WEEK OF FEBRUARY 25 -
News Assn. stock value challenged BY KATIE LANE-WILKE
See STOCK, PAGE 25
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D
NO.4
GM gathering sensitive data from suppliers
CRAIN'S DETROIT BUSINESS
Dissident stockholders of the Evening News Association have talked to a New York law firm about representing them in a battle with management over the value of Evening News stock. The group and some other shareholders said they believe the value of their stock is grossly understated by the privately-held company. Their actions indicate interest in selling ENA stock. ENA owns The Detroit News, seven other newspapers, a commercial printing operation, and TV and radio stations in the Sunbelt, Washington, D.C., and New Jersey. The dissident group has already hired an investment banker in New York to research and represent its interests in the same controversy. A lawyer with the law firm said the number of stockholders interested in joining in any action is growing. Those involved in the dissident activity were reluctant to give details and asked anonymity. The interest stems from a strong disagreement as to the value of ENA stock. In December, ENA made a self-tender offer to buy 40,000 shares of its stock at $250 a share. It bought 31,548 shares. A report
MARCH 3, 1985 VOLUME 1
BY JANE WHITE CRAIN'S DETROIT BUSINESS
DWIGHT CENDROWSKI
Detroit Filmmaker Sue Marx (center) and audio man Rufus Harris (right) ready Chrysler Corp. Chairman Lee lacocca for an appearance in "Detroit Means Business," a promotional film Marx is shooting. Story, Page 22 ~
Irwin tries Inacomp retail market with extra memory for IBM PC BY BRADFORD WERNLE CRAIN 'S DETROIT BUSINESS
Irwin Magnetic Systems Inc., an Ann Arbor manufacturer of computer peripherals, will sell a tape drive backup memory for t he IBM Per sonal Computer through the nationwide retail network of Troy-based Inacomp Computer Centers Inc. The move marks the first venture into the r etail marketplace for Irwin, which hopes to sell its $995 tape drive this year through the 1,500 stores owned by volume retailers that carry mM equipment. Inacomp has 50 stores in five states. The change in marketing strategy should mean growth for the privately-held company, which is expected to post $12 million in sales this year, said President Herbert Amster. Irwin, established in 1983, Amster began production of its tape drive in August, selling mainly to original equipment manufacturers.
Sales in fiscal 1984 ending in June were about $200,000. Amster also predicted the company - which employs 110 people at its Green Road facility - may have 160 employees by the end of 1985. Paul La Voie, the company's executive vice president, said, "We can provide higher margins to dealers and ourselves by bypassing the middleman distributor. The middleman takes 10 to 20 (percentage) points we can split between ourselves and the retailer." Irwin's machine insures computer users against the accidental loss of data stored on Winchester hard disks. "In some respects, you might say we're in the computer insurance business," said La Voie. "Anybody that doesn't have a backup system has problems." The $995 cost includes software and a built-in power supply. With a formatted capacity of 10 megabytes) a Model 310 substitutes for 20-30 floppy diskettes, the conventional mM PC backup system. A byte is a unit of computer information. Advertisem,ents for the Model 310 will begin apSee IRWIN, PAGE 25
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General Motors Corp. is collecting sensitive financial data from its machine tool suppliers - including detailed breakdowns of unit profit and loss figures - apparently to institute tighter controls when the suppliers ask for price increases. That sort of information is the basis for a cost-cutting technique invented and used by Polaroid Corp. of Cambridge, Mass. A Polaroid official said GM bought the computer software system called Zero Base Pricing from Polaroid and that a GM employee attended a seminar on its use in November. The program is designed to ask suppliers for detailed data on costs of materials, labor and profit. GM officials would not confirm the purchase or use of the program. In December, GM officials gave about 15 machine tool suppliers two months to complete lengthy surveys that asked for information such as unit profit and loss figures, research and development expenditures, and manufacturing capacity. Suppliers have said the sur-
.. I don't think the questions were out of line.1IIJ CHET MACCIO, Snyder Corp. official veys were six inches thick, in some cases. GM's request for information "was quite extensive, including 10K and 10Q (financial) reports," said Chet Maccio, vice president of sales and marketing for Snyder Corp. in Detroit. He said it required two months to research the information. "I think basically the purpose of (the survey) was to know our financial strengths," Maccio said. "I don't think the questions were out of line." Snyder is a unit of AMCA International Ltd. of Montreal, Quebec, which had 1983 sales of about $1.2 billion. Maccio, who attended the December meeting, submitted his company's 16-plus-page survey See DATA, PAGE 27
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.Drink it in Detroit, say ads; Heileman invades Stroh turf CRAIN'S DETROIT BUSINESS
Take that, Stroh. The G. Heileman Brewing Co., which has a brewery in Frankenmuth, is running a full-page ad in both The Detroit News and the Detroit Free Press Monday, boasting about its continued presence and financial contributions to Michigan. The ad takes a jab at the Stroh Brewery Co., which announced two weeks ago that it will close its Detroit brewery in the spring. Entitled "Three Michigan Brews That Won't Leave You Flat," the ad pictures three Heileman products - Carling Black Label, Blatz and Colt 45. It then crows about the company's financial contribution to Michigan, including investment of $10 mil-
lion since 1 9 7 9 on plant expansion and modernization, employment of more than 450 people, and a Michigan payroll "in excess of $15 million." The ad closes with the line: "The Brewery That's Growing. Not Going." The ad forgot to say that tiny Geyer Bros. Brewing Co. also brews beer in Frankenmuth. John Pedace, executive vice presid~nt for Heileman, based in La Crosse, Wis., told Crain's Detroit Business two weeks ago that his company planned to do something in Detroit following Stroh's departure. ''If the opportunity is there to pick up more business, we'll be there to get it," he said. "Our philosophy is to be as aggressive as JMlSSible." c:EJII
- Steve Raphael