European Stars And Stripes (Newspaper) - January 17, 1988, Darmstadt, Hesse                                Sunday january 17, 1988 the stars and stripes Page 19 business news Santa be cuts rail staff by two thirds Chicago up Santa pc South Ern Pacific corp. Has announced in plans id reduce ils corporate staff by nearly iwo thirds As part of a restructuring pro Gram aimed at decentralizing and reducing the size of the company. The restructuring program Calls for a reduction of corporate staff from the cur rent 371 positions to approximately j 25 positions Santa be Southern Pacific said in a prepared statement. The net reduction company wide will be somewhat less As an undetermined number of inc people involved will be transferred to subsidiaries. Santa pc Southern Pacific which plans to maintain its corporate head quarters in Chicago said the action resulted from plans to downsize the com Pany and decentralize. We Nave previously announced plans to restructure and concentrate on our Core digest businesses of transportation real estate and natural resources said Robert d. Krebs president and chief executive officer. The company began ils restructuring program which it nil Laid will provide stockholders wish at least 14 billion after the interstate Commerce commis Sion voted in june not to rehear ill re quest to merge it two Railroad units. Southern Pacific transportation and Santa it railway the panel initially rejected the company s request to merge ils railroads in july 1986. The Parent company acquired Southern Pacific in december 1983, but the inc required it to hold the Railroad in a Trust White the government consid ered the request la merge the lines. On dec. 28, the company said it would sell Southern Pacific to Rio Gran de industries inc. For si.8 billion in Cash arid assumed debt but Henley croup inc., Santa be Southern Pacific s largest shareholder objected to the Deal. Henley which had been discussing a $9.8 billion acquisition until talks ended earlier in december owns about 23 Mil lion shares or 14.7 percent of Santa be Southern Pacific. Other bidders for Santa be Southern Pacific which is trying to remain inde pendent included Olympia & York developments inc., and t group represent ing Railroad employees. Kansas cily Southern industries inc. Had made what it called a higher bid for Southern Pacific than Rio Grande which owns the Den Veril Rio Grande Western Railroad. Santa pc Southern Pacific already has completed the tale of Robert e. Mckee ils general building contractor and has agreements in place Tor the Sale of Nolfi be Pacific Timber co., Bankers leasing and financial corp. And Southern Pacific transportation co. The company also is dote to ote Sale of its non Core pipe line Ossetia. Counting the planned South pm Pacific Sale the company has said it will have about $1.7 billion in pre lax proceeds from divestitures in addition it is our Basic philosophy that where possible staff activities should be conducted in our operating companies where Thrif contribution can be More readily determined Krebs said. Our operating companies Are in the process of deciding which of these people should be added to their staffs we anticipate that Hose decisions and most of the reductions will be nude be tween now and april i employees whose jobs Are eliminated and who Are left without another Posi Tion will be offered Early retirement or Severance Benefit continuation for up two Yean and outplacement services Krebs said. Communications service planned by us sprint new York up us sprint communications co. Has announced plans 10 introduce a nationwide fiber optic private line telecommunications service network for businesses. Private lines Art most often used by companies that have heavy voice or data transmission needs among plants or offices in disparate locations. The company said the new service to be called Cicar Linc 1.5, is a dedicated digital service equivalent to 24 voice Grade channels. Us sprint said the service in the first of an expected family of fiber optic private line products. Tennessee Community will get truck Plant Columbia. Tenn. Up via Max corp. Has announced that in will build a $12.3 million truck Plant at mount pleasant tcnn., creating 160 jobs Over the Ocul two years. The announcement was made during the Maury county chamber of Commerce s annual banquet which featured an address by gov. Ned  Carroll and Tom Pepin of via Max said the the company will hire 25 workers this Spring and the work Force will increase to so by the end of the year and to 160 in two years. Construction is under Way in Spring Hill also in Maury county for a general molars Auto Mobile Plant. Commission appointed to try trimming deficit Washington a a banker credited with helping save new York City from bankruptcy and a businessman who restored the health of an automaker have been named to a bipartisan commission whose task includes recommending ways to Cut the Federal budget Defi  speaker Jim Wright has named Felix Rohatyn an investment banker who helped Lead new York cily out of crisis in inc 1970s Roberts. Strauss a former Trade representative and democratic chairman and rep. William h. Gray Iii d-pa., chairman of inc House budget committee. Senate majority Leader Robert c. Byrd appointed Lee a. Iacocca. Chairman of Chrysler corp. Lane Kirkland president of the  and sen. Daniel Patrick Moynihan d ,other members of the 12-Membcr commis Sion will be named by Senate and House rep. Bican leaders and by president Reagan. The commission is required to Issue a final report by March 1,1989. Recommending ways to reduce the budget deficit while promoting eco nomic growth and saving. The economic scene in Britain one big worry by Leonard silk London the British Are feeling Good about their Economy. The latest official forecast of the trea sury prepared soon after the october Slock Market collapse put the growth rate far the National Economy in 1988 at  per enl inflation is expected to remain Low. And unemployment still at inc High level of 9.6 percent has come Down from 13 percent and is still declining. Indeed As inc Stock Market crash which was even More severe in London than in new York has re ceded in time government economists have come to believe that the Treasury s november forecast is too Low they Are hoping thai the British Economy can continue to expand at close to ils 1927 Rale of 4 percent. That Pace lifted Britain which used to be in the cellar of the european growth league to first place last year. Both Public and private economists give the credit for the turnaround to prime minister Margaret Thatcher and particularly to her encouragement of British Industry to feel free to innovate make Money and keep More of what in earns. However there is one big worry beneath All this Good cheer. Robin Leigh Pemberton the governor of the Bank of England said lost week in Dundee Scotland it has of course been encouraging to see the strength of Confidence reported in confederation of British Industry and department of Trade and Industry surveys both suggesting that capital spending will continue to strengthen this year but that was nol the whole Story he added. Post crash sentiment often rather grandly de scribed As anecdotal evidence appears to Tell an other Story he said. If one asks an industrialist How the fall in the Slock Market will affect him he May truthfully and accurately reply not much hut on the other hand if one were to ask How far the appreciation of Sterling against the Dollar was Likely to affect Bis Export prospects or How seriously a slowing of the United states Economy and of world demand would affect his markets and his profitability then the response might be More re  indeed it is the Outlook for the american Dollar that Heads the worry Lisi of British executives. The hang on the endless Stream of bulletins reporting every wiggle in the Dollar Exchange Rales fearing that Decimal Point changes May wind up costing billions of dollars. Thuv attach critical importance to the . Trade statistics especially the new figures thai were released Friday. But these imperfect Trade numbers uncorrected for seasonal factors cannot Bear such weight. It was a started the Market slide in october which culminated in Black monday and wiped a trillion dollars off the value of equities by and Large and despite inc new group of seven Accord and last week s announcement by presi Dent Reagan and Japan s prime minister Noboru Takeshita of cooperative arrangements to Shore up the Dollar the City of London Britain s Wall Street is bearish on the Dollar. Its Bra Richness received a downward thrust from three leading american economists Martin s. Feldstin and Lawrence h. Summers both of Harvard University and Rudiger Dombush of the Massachusetts Institute of technology at a monetary Confer ence Here last week. To make it possible for the United Stales to regain a sustainable foreign Trade and foreign debt position Dombush estimated that from the december level a further i $-20 percent depreciation of the real inflation adjusted Dollar Exchange rate measured against a weighted average of other currencies needed to Lake place. Since Many currencies unlike the yen and the Mark Are kept in line with the Dollar and inflation differentials Are Small Dombush said the implication was that there needed to be major further depreciation of the nominal Dollar Rales against inc Mark and the yen. Since he foresees considerable downward flexibility of japanese Export prices Dornbusch believes the yen still has very far to Rise before the required real adjustment has occurred. A rate of 100 yen to the Dollar by late 1958 is nol Al All  he said. Feldstein a former chairman of president Reagan s Council of economic advisers pointed out that where last february s louvre agreement had said a further decline of the Dollar would be counterproductive the new group of seven communique said Only that a further decline of the Dollar could be counterproductive. Feldstein a former drafter of communiques said this change had scarcely been noticed and yet was highly significant. The consensus among private economists both Here and in the United Stales is that the Dollar will go markedly lower and in fact should be allowed to fall further. The alternative As they see in would be a locked in and unsustainable Trade deficit a piling up of external debt that could nol go on indefinitely and eventually a crash Landing for the american Economy and the world Economy. If the United Stales Means to overcome such Dollar pessimism in will have to go a lot further than it has so far. Market intervention by the Federal Reserve and other Central Banks will need to be augmented by stronger action to reduce the budget deficit. But such action is nol Likely in this election year