European Stars and Stripes (Newspaper) - February 4, 1992, Darmstadt, Hesse                                Tuesday february 4, 1992 the stars and stripes b Page 17money matters a worldwide slump in the Auto Industry shrank Japan a exports of cars trucks and buses in 1991 for the sixth consecutive year the Japan automobile manufacturers association said. Overall exports dropped 1.3 percent from the previous year to 5,753,387 vehicles said association officials. Passenger car exports dropped 0.7 percent to 4,452,233, the first decline in two years they said. Auto exports to the United states in 1991 declined 7.2 percent to 2,075,523 from the previous year while exports to the european Community increased 0.6 percent to 1,264,007. The association said 1991 marked the fifth consecutive year that exports to the United states  rates London up mondays rates for the . Dollar to other currencies. Figures Are expressed in dollars to the British Pound other local currencies in dollars Gold was quoted at $357.00 an ounce Silver at $4.16. Jan. 31 feb. 3 British pound.1.7915 1.8000 German mark.1.6050 1.6015 French franc.5.4900 5.4785 dutch guilder.1.8092 1.7990 belgian franc.33.09 33.01 italian lira.1,216.60 1,207.50 Swiss franc.1.4275 1.4290 greek drachma.186.52 185.55 turkish lira.5,518.70 5,514.40 saudi arabian riyal.3.7499 3.7498 Spanish peseta.101.55 101.04 portuguese escudo.139.01 138.34 Canadian dollar.1.1745 1.1739 aus Ian schilling.11.3700 11.3100 norwegian krone.6.3355 6.3040 danish krone.6.2605 6.2280 these Are commercial rates and can be related Only to the use of foreign currency by . Forces for official business. The Only official rate concerns the Sale of German Marks to . Personnel for personal use and this will be 1.57 through tuesday based on mondays noontime  yields drive investors to junk funds new York a investors poured Money into Mutual funds for junk Bonds last month As lower interest rates elsewhere drove them to the risky investments figures showed sunday. About $600 million flowed into the High yield funds in january according to Joseph Bencivenga director of High yield research at Salomon Brothers. That was Way up from december when the funds lost a net $63 million. Bencivenga gathered the data for Money magazines Small investor Index. The investment flood began after the Federal Reserve in mid december Cut the discount rate a leading Short term interest rate a full percentage Point to 3.5 percent. Money Magazine said investors withdrew much of the Money from maturing certificates of Deposit whose yields have been declining after the discount rate was Cut. New cd yield As Little As 4 percent while junk funds Are paying As much As 12 percent. Redirecting military savings could boost private Industry by Steven greenhouse the new York times Washington the military spending cuts that president Bush proposed last week would certainly Hurt workers who make submarines in Connecticut and fighter aircraft in California. But economists say if the $50 billion is used instead to increase growth by say increasing investment the Short term pain would be outweighed by the Lon term gain. Lawrence r. Klein an economist at the University of Pennsylvania and recipient of the Nobel memorial prize in economic science said this new a peace dividend can if not frittered away raise economic output in the Long term in two ways. One would be to move resources into the civilian sector making it More competitive. Another would be to reduce the Federal budget deficit which would help push Down interest rates and Spur investment in the private sector. Klein said his studies of Pentagon spending cuts after the Vietnam War showed that if a cutback eliminated 100,000 jobs in the Short run the redirection of the Money saved would ultimately create More than 100,000 permanent jobs to replace them. Substituting civilian spending for military spending would  nation s production potential Klein said because a a weapon does no to produce goods for the next 20 years but a new building or piece of equipment produces output for the length of its  Many democrats in Congress Are eager to Cut even further into the military budget than the $50 billion Over five years proposed by the president. That push combined with the More than $100 billion in cuts already in the pipeline has led Many economists to fear a drastic Drain from the governments Pool of research and development Money. They were heartened that the administration would increase spending for civilian research and development by 7 percent. Supercomputers would get $803 Mil lion a 23 percent increase. A if we can turn our research capacities and scientific Talent to something other than weapons then what s the big problem about defense cuts a said Herbert Stein an economist at the american Enterprise Institute who was a chairman of the Council of economic advisers under presidents Nixon and Ford. Certainly there will be a big problem for workers at general dynamics electric boat division in Groton conn., who were shocked to learn that the Pentagon would like to reduce its orders for the sea Wolf submarine to one Down from three if Congress permits it to. Similarly workers at Hughes aircraft co. In Southern California were unhappy to learn that the Pentagon proposed ordering 20 b-2 bombers instead of 75. No one is sure How Many layoffs will it is not the National level but the local level we have to worry about regarding these cuts a John Tepper Marlin of the Council of economic priorities. Result from the newest round of cuts in the Pentagon budgets but Many economists say it will reach the tens of thousands. A in terms of macroeconomics it is not the National level but the local level we have to worry about regarding these cuts Quot said John Tepper Marlin director of the conversion information Center at the Council of economic priorities a Public policy Institute in new York. The trauma can be reduced if local and state governments aggressively plan to help such workers at Apt to a non military future economic development officials said. Economists Point to Success stories such As St. Louis where St. Louis Community College worked with Mcdonnell Douglas corp. To retrain and find jobs for Laid off workers. David Wyss research director at Dri a Mcgraw Hill inc., an economics consulting group said his research team had done studies showing that if military spending cuts were used to reduce the ballooning budget deficit a in the Long term it helps you because it will allow interest rates to drop investment to recover and More stimulus Long  Wyss said every Dollar spent on military production generated $2.30 extra in the Gross National product from auxiliary industries but Public investment such As building roads or Bridges would generate a larger kick an extra $2.50 in the Gross National product. The multiplier effect was greater for Public investment because in filling potholes or building Bridges Wyss said Little Money goes overseas to buy raw materials or components. Other economists noted that such spending would also help increase productivity by reducing transportation delays and costs. For some economists the Pentagon a heavy research and development spending was Good for the Overall Economy because it helped develop important technologies such As semiconductors and Light aircraft frames that were spun off to help civilian Industry. These economists worried that reducing the Pentagon a budget would Hurt the nation s research and development efforts. In its proposed budget the administration took pains to say it was increasing outlays for the non military research budget even As it Cut military spending. Gordon Adams director of the defense budget project a Public policy Institute in Washington said the proposed military spending cuts would be far smaller proportionally than those after world War ii and the Vietnam War. After Vietnam military spending was but from slightly under 10 percent of the Gnu to just under 5 percent. Bush a proposals would reduce military spending by 1.8 percent of the Gnu to 3.4 percent from 5.2 percent. 30% of Orange county businesses plan to Cut work Force paper says Santa Ana Calif. Up about 30 percent of Orange county a 500 largest businesses say they intend to trim their work Force this year cutting More jobs in a Region already mired in a two year downturn the Orange county Register reported sunday. A poll commissioned by the newspaper also found that almost one in five companies planned to close or consolidate operations in the county that Borders los Angeles while a scant 8 percent of companies intended to expand. Already 62 percent of the 5 x largest businesses dismissed employees last year in a Region stretching along the coast from Seal Beach to san Clemente the Register poll results showed. The poll conducted in december by Richard Hertz consulting of Rohert Park Calif., was based on 226 responses from the Orange county businesses. There was a 5 percent margin of error. The Survey also found that business leaders Are pessimistic about government handling of the ailing Economy and Are concerned about rising health care and workers compensation costs. Almost 90 percent of Orange county executives said president Bush is doing a Quot fair or a a poor Job handling the nations Economy As opposed to a a Good or  and business leaders explained they Are disturbed by Steep costs for medical care and workers compensation. For one local businessman Mike Der Derian the dream of running a business in California May come to an end. Derderian a 28-year-old company Royalty carpet Mills in Irvine employs 240 workers but is struggling under the weight of workers expenses. A a workers compensation group health insurance a these things cripple a company a he told the Register. Quot the name of the game is to get rid of people because of All this regulation a he said. A a in be had people working Here for years who then come in and say they have a bad Back. Next Day they have a letter from an  Derderian who Cut his work Force by 25 percent in 1991, said he May move his company to Arizona. Looming defense cuts May further push up unemployment in the county business leaders said. The county benefited from the Reagan administrations military buildup but now the Pentagon is promising massive budget cuts. But there is a Silver lining in Orange county Given the aging population. Medical companies will Benefit. A the baby Boomers Are becoming senior citizens a said Roger Kerr administrator at Royale healthcare Center in Santa Ana. The staff at the Center has grown by 10 percent last year he said