European Stars and Stripes (Newspaper) - January 07, 1990, Darmstadt, Hesse                                Page 18 the stars and stripes sunday january 7,1990 business news new year s rally of Buck was t to be the Dollar seemed Bent on a new year s rally Early last week but it was not to be. The combination of Surprise Dollar Selling by the West German Bundesbank thursday and an uninspiring set or december employment data from the United states a Day later sent the backsliding Back below the 1.70 Mark level. The Dollar s High Tor the week in european trading was in the neighbourhood of 1.735 Marks on thursday but some Well timed Bundesbank Dollar bashing sent the Buck reeling to a close of 1.6885 Marks in european trading. On Friday the Buck did even worse. It slipped to i.680s Marks late in the trading Day on the news that the . Unemployment rate for de Cember remained at 5.3 percent. To top it All off Job growth for december was dismal. Only 140,000 new jobs were added to . Payrolls in december and 55,000 of those were due to the return of striking communications workers to their jobs. Economists had expected As Many As 200,000 new jobs to be created on the month. Currency trader said the most Digap Randy Mcclain pointing news in the jobs data was that manufacturing and construction employment both showed Steep losses. The jobs gains that did occur were in the services sector of the Economy. The poor showing rekindled concern that the . Economy is slowing Down dramatically and that further interest rate cuts in the states Are right around the Corner. Ginter Teich a currency analyst with the Bank of Boston s office in Frankfurt West Ger Many said he was t surprised by the weak employment data but he was surprised by the Bundesbank s Sale of $50 million Worth of dollars on the open Market thursday. The Market now knows that they Don t want to see the Dollar much higher at the moment Teich said of the Bundesbank. He said the West German Central Bank s strategy was Given added weight because several other european Central Banks and the . Federal Reserve joined in with Dollar sales of their own last week. Teich said it s not surprising the Federal re serve supports a slightly weaker Dollar. A weak Dollar makes american exports less expensive and that should help Cut the . Trade deficit Over the next year he said. The Dollar is now at about the right level Teich added. Nevertheless the Bundesbank s intervention to curb the Dollar was somewhat surprising. The Buck had fallen about 12 pfennig since dec. I and Many currency traders thought a minimally by the Dollar in the first week of the year was nothing More than an overdue correction to that crash. The Bundesbank apparently does t Sec it that Way. One theory is that the West German Central Bank wants to keep the Dollar in Check to pre vent . Exports from getting too expensive. West Germany is particularly concerned about keeping a rein on Domestic inflation and it does t want prices on imported goods to get out of hand either. Rising prices on imported goods can encourage Domestic producers to hike prices As Well Teich said and that might set off a Nasty out of inflation on the West German Home front. The upshot of All the Central Bank Man Euver ing for . Service members is that their dollars will buy even less in the week ahead. The military Exchange rate for West Germany was set at 1.65 Marks for the weekend based on a Price fixing in Frankfurt Friday afternoon. That represents a loss of one pfennig on the week and the lowest military rate in More than a year. The Dollar also lost ground against the British Pound last week. At the Start of the week on Pound was Selling for roughly $1.61, but by Fri Day a Pound was Selling for almost $ 1.64.thsufiv�trtpm Haibi Price boosts helped arc Stem flow of red Ink for year by Steve Taylor Munich Bureau Garmisch West Germany after three years of wallowing in red Ink the armed forces recreation Center posted a profit of $203,000 for the year that ended oct. 31. Total Revenue also increased going from $18.7 Mil lion in 1988 to $21.2 million last year. The better numbers and slight profit were largely caused by Price increases implemented by arc last Spring. That move alone brought in $1 million More in sales and tipped the balance Sheet into the Black arc executive director James Mccrindle said. Rev Enue from . Service members and their families participating in arc recreation programs also showed nearly a $ 1 million increase for the year. The $200,000-plus profit was a far cry from the fiscal 1988 performance. Arc lost $1.26 million that year one of its worst Ever. In the two years before that the organization lost $327,000 and $272,000, respectively. Mccrindle said he s now More confident about the future and expects his organization to make it through next summer s Peak vacation season without addition Al Price increases arc officials called last summer a Banner season. Id july a Peak travel month occupancy rates for the arc hotel Chain in Southern West Germany reached98 percent. A healthy summer was badly needed Mccrindle said particularly after mild weather kept ski vacation ers away during the Winter of 1988-89. Mccrindle also attributed the improved profit picture for fiscal 1989 to Cost cutting measures and a Stabler Dollar. Arc had expected an Exchange rate of 1.80 Marks on average for the fiscal year but the rate was actually 1.87 Marks per Dollar. That reduced payroll expenses and made supplies purchased in the West German currency less expensive than anticipated he said. Food and beverage sales were up slightly in fiscal1989, rising to $6.6 million from $6.04 million in 1988. But arc still lost about $300,000 on that Seg ment of its operations Mccrindle said. The executive director Hopes the poor performance can be turned around by buying More Mest and other supplies from the United states at cheaper prices. While future troop strength in Europe remains Uncertain Mccrindle said his organization could with stand a reduction of 30,000 service members in West Germany and still run successfully. Such a reduction is being sought by president Bush. For the next fiscal year arc is projecting a loss of$260,000. Mainly because of renovation projects and an expected loss of additional Federal tax support according to arc spokesman Harry Connors. Tax sup port has already dropped from $22.7 million in 1987 to $ 19.6 million last year. Current construction plans arc flexible but arc s grandest plan of Alt will proceed full Speed ahead Mccrindle said. That $65 million project Calls for construction of a 450-room hotel in Garmisch with a completion Date of August 1992. Jane s publications tighten belts As weapons advertising dries up by Dave Diehl . Bureau Jane s defence weekly offspring of the mighty col Lection of Jane s yearbooks May be facing difficult times in the age of superpower detente. The and Market in the defense Field at the moment is shrinking like it has t shrunk before said Mark Brough Lon the company s former Public relations official. While the weekly Magazine s subscriptions a big percentage of which Are complimentary have climbed to nearly 30,000, All important advertising revenues arc falling said brought Ron who recently took a Job at another company. Everybody is feeling the Pinch with advertising said Paul Beaver the Magazine s 36-year-old publisher. He predicts a 10 percent to 15 percent reduction in advertising in defense journals Overall this year. It s obvious that there is a smaller cake out there Jane s defence weekly is part of Jane s information group which earns about 75 percent of its annual revenues from advertising in the Magazine and 23yearbooks dedicated to naval air and ground warfare. Beaver said Jane s was holding up Well through the first eight months of 1989, raking in More and Revenue than for the same period in 1988, but the publisher said he s not so confident that Pace can be maintained in the year ahead. All the Independent evidence Points to Jane s Brac ing for hard times. The company recently Laid off 35 employees. And in recent months nearly a dozen editorial staff members have left the weekly journal s Plush new offices South of London for what they saw As better jobs. Beaver said the layoffs Are part of a staff re structuring. But sex staff members Call it a sign of can times to come. It is an unhappy ship us the moment one former employee said. Morale is Down and pay is not enough for what the management asks of the workers the sex employee added. Reporters at the Magazine Start at about$17,000 a year. Jane a which started operations in 1897, has always been known for its comprehensive yearbooks. The mag Azine its journalists and yearbook authors Are often quoted in other journals and on radio and television. Despite the current downturn Beaver thinks there will always be a need for specialized publications Cov ering the defense Industry. An Industry that spends $1.7 million a minute can support a Magazine created to cover it he said. But firms arc going to be advertising less frequently and they Are going to want to make certain that a highly placed target audience sees their ads Beaver  arc going to want to make sure that Gen. Colin Powell gets a copy of Jane s defence weekly with their and in it he said. Powell is chairman of . Joint chiefs of staff. Beaver also said he thinks his Magazine will have plenty to report on. To make his Point he readily cited30 potential Flash Points in places such As Pakistan and Central  believe that peace has t actually broken out he said. In fact the world is in the most dangerous state it has been in in the last 45  . Industry sets sights on East bloc Washington a the almost $ 1 billion . Aid program for Poland and Hungary is spawning a whole new Industry As government officials and Pri vate Industry assess opportunities in the East bloc. It s really exciting said Jim Flanigan a spokes Man for the peace corps which is preparing to Send its first volunteers to Europe in 20 years. Perhaps 65 people mainly English teachers will go to Hungary next summer and Poland is expected to get volunteers As Well. The peace corps is just one of Many agencies with a stake in the support for East european democracy act passed by Congress recently and signed by president Bush. The package provides $938 million in benefits Over three years with Poland receiving the lion s share. The Export import Bank will extend credit to exporters the Agency for International development will set up a scholarship program and the Energy depart ment will help retrofit a commercial Power Plant in Krakow Poland. While . Government Aid is important Gregory Flynn an expert in Eastern european affairs at the Carnegie endowment for International peace said Long term business investment will be even More important. One word of caution though. The europeans particularly West Germany and Italy will have the initial Edge because of past experience and contacts behind the Iron curtain he said. American business will have to play catch up