Star Tribune from Minneapolis, Minnesota • Page 45

INDEX For executives only Page D2 Business briefing PageD3 Stocks Page D4, D5 Mutual funds Page D6 usiness Friday FEBRUARY28, 1997 SECTION SterTnbure Markets Column one Airlines RLM Royal Dutch Airlines and Northwest Airlines in January 1993 became the first European and IIS. carriers to win antitrust immunity from the U.S. government But from the very onset of the alliance, KIM and Northwest have clashed over control issues. Driving force New CEO Fortun keeps steady grip on the high-flying Hutchinson Tech KLM may sell its stake in MWA structure the sale of an equity block worth about $769 million. But officials from both airlines confirmed that the proposal is part of ongoing negotiations between Northwest Chief Financial Officer Jim Lawrence and KLM Managing Director and Chief Financial Officer Robbie Abra-hamsen.

"At this point it's a KLM proposal," Northwest spokesman Doug Killian said. "We've had Dow Industrials CLOSE 6,925.07 down 5811 -mm NASDAQ CLOSE: 1312.66 down27B9 if VOLUME: 6735 million )ff NYSE CLOSE: 41739 down 425 VOLUME: 4672 million CLOSE: 795.07 down 10.61 Gold CLOSE: 360.00 up 525 ib Oil lPi CLOSE: 20B8 sVjl down 025 West Texas crude rfMl, Dollar 120.69 YEN, down 1.44 1.69 MARKS, down 000 By Tony Kennedy Star Tribune Staff Writer KLM Royal Dutch Airlines has proposed shedding its 19.4 percent ownership stake in Northwest Airlines as a way to heal the bitter relationship between the two carriers and expand their four-year-old flying alliance. No deal has been struck and neither airline would comment Thursday on how they would 1 x. 4 'ATI bar Technology i This Is an artist's rendering of the technology development center planned Imation to build technology negotiations and the two CFOs are talking, but that's all we're saying at this time." KLM spokeswoman Marjory Wenting said the talks between Lawrence and Abrahamsen involve two primary issues: The possible sale of the Dutch carrier's shares in Northwest and a multi-year contract to govern the four-year-old operational alliance that has allowed Northwest and KLM to provide transatlantic by Nation Corp. In Oakdale.

second half of 1998. The move will result in a significant increase in Imation's work force in Oakdale, where about 460 executives, marketing and sales employees currently work. They will be joined in April by another 280 metro-area employees, who will be housed in a second office building being built next to the headquarters. Not included in this move are Kenneth Chenault Richard Parsons at Time Warner. But Time Warner is much smaller, with $8 billion in revenues in 1996 compared with American Express's $15.8 billion.

Turn to AMEX on D4 331 III Oakdale facility will house about 800 scientists By Susan Feyder Star Tribune Staff Writer Imation the imaging and information company spun off last year by 3M an passenger service as if they were one airline. The alliance is now governed by a one-year contract. Wenting said KLM is interested in a multi-year contract, especially because the two carriers are talking about expanding their alliance. Turn to AIRLINES on D6 fan KLM and Northwest have clashed over control issues since the onset of the alliance. P1 At a center about 300 other scientists who for now will remain in space Imation leases from 3M in Maplewood.

Imation said a decision on a permanent home for them will be made in about a month and options include further expansion in Oakdale, continuing to lease in Maplewood or leasing elsewhere in the Twin Cities. Turn to EXPAND on D3 Real estate Residential real estate market strong in January But activity is down from 1996 By Neal Gendler Star Tribune Staff Writer Arrival of the new year perked up the Twin Cities-area real-estate market as expected, bringing an increase in sales activity from December. But January 1997 lagged the same month a year ago, with 15.7 percent fewer purchase agreements signed. The Minneapolis Area Association of Realtors reported Thursday that "sales pending," those for which purchase agreements were signed, totaled 2,323 last month, up from 1,677 in December but down from January 1996, when 2,756 were signed. Mark Allen, association president, said it was not that January 1997 was slow but that "the first half of 1996 was an exceptional year in activity." The reasons included a carryover in activity from the last half of 1995, when interest rates fell, and a consumer "comfort level with the economy, especially with job security." Allen said pending sales for January 1997 are about 10 lercent higher than they were or January 1995, a more typical January.

Turn to REPORT on D2 fan Allen expects February sales to challenge last year record far the month. By Terry Fiedler Star Tribune Staff Writer Wayne Fortun is on the advisory board of Excelsior-Henderson, the motorcycle company starting up in Burnsville, but he's more intimately involved with a higher-powered venture. Fortun, an avid biker (he owns two Harleys, an '83 and a '93), weightlifter and one-time appliance salesman, is the driving force of Hutchinson Technology whose stock price has climbed from a split-adjusted $10.25 in July to a recent high of S38.37V4 on Jan. 30. It closed Thursday at It's been a nice ride, one that analysts such as Cody Acree of Detroit-based Olde Discount Corp.

think will continue. Acree projects a target price of $47 a share in upcoming months, as the company continues to benefit from increased demand for per- Wayne Fortun sonal computers and the disk drives within them. The history of the industry and the stock price, though, is that mere are as many valleys as hills. Money manager Stacy Kleven of 1 lb Group in Minneapolis thinks the stock price "is on the far side of the hill." At the end of January she sold her entire position for $37 a share. She bought the stock in July at a split-adjusted $12.75 a share.

"It's too pricey now," she said. John G. Kinnard analyst Clinton Morrison, who rates the com pany a "hold," said the stock might be overvalued by 20 to 30 percent. Even so, he said, "there's a clear distinction between a great investment and a great company." The stock may be ahead ot itself, but this is a su perb company, exceptionally well-managed. I can think of another company that has main tained a 70 percent market share tor the past 15 years.

Hutchinson is the only Ameri can company (its three other pri mary competitors are in the Far East) that produces suspension assemblies for computer disk drives in large quantity for resale. Suspension assemblies hold pinhead-sized readwrite heads, which store data by magnetizing small areas on a spinning disk made ot aluminum or glass and coated with a thin film of mag netic material. For Its efforts, Hutchinson receives 65 cents each for its com ponents, and even at that some people complain. Fortun said that not that long ago "I had one customer tell me, 'I don't know what the big deal is, it's just sheet metal. The company's new TSA suspension will cost $1.25 when pro duced in volume later this year.

in part because it includes copper electrical leads that otherwise would have to be hand soldered onto the suspensions. This allows for more automa tion and more accuracy, selling points that will allow Hutchinson to make the transition from "a mechanical to an electro-me chanical" company, Fortun said. Turn to FORTUN on D2 American Express picks next president Kenneth Chenault in line for top job when Harvey Golub retires in 7 years Key rates PRIME RATE 3410. T-BH1 1-YR. T-BILL 825 520 5.61 6S0 Inside Durable goods surge Orders to U.S.

factories for big-ticket durable goods roared back to life in January after two declines. Spurred by a 14.9 percent surge in orders for electronic goods, orders jumped 3.6 percent. Turn to D3. FYI CURT1S-C spells? A new computerized customer reservation and business support system joined the eponymous world of Carlson this week. Called CURTIS-C and pronounced "courtesy," the system was named after Curtis L.

Carlson, founder and chairman of Minneton-ka-based Carlson Companies Inc. It soon will be available to all the companies of the Carlson Hospitality Worldwide operating group. CURTIS-C includes such property support systems as online buying, online operating manuals and report distribution. Additionally, it provides highly personalized and confidential customer service information. "We have also drawn upon the technical expertise of our counterparts within Carlson Wagonlit Travel and Carlson Companies Inc.

for a synergistic benefit," said Scott Heint-zeman, vice president of reservations and information services for Carlson Hospitality Worldwide. The company includes 436 hotels, resorts and cruise ship operations. Dan Freeborn No bead counters The necklace of beads worn by clients to pay for drinks while staying in Club Med resorts will be replaced by an electronic "smart card" now being tried in one of its Swiss and two of its French villages. "It avoids tying and untying the necklace all the time and bar staff having to count the beads at the end of every day," Club Med said in Paris. It added that there also have been problems with counterfeit beads.

Since 1957 drinks at Club Med have been paid for with multicolored beads Instead of money an idea Inspired by the Polynesian culture on which the International resort operator's original villages were based. Financial Times ip Associated Press NEW YORK American Express Co. named Kenneth Chenault president and chief operating officer, marking the first public anointment of a black executive to run one of the country's biggest companies. In an unusually forward-looking statement Thursday, Chairman and CEO Harvey Golub said Chenault was his choice for successor when Golub retires in seven years at 65. "This move clearly recog nounced plans Thursday to build a technology development center next to its Oakdale headquarters.

The Discovery Technology Center will house about 800 scientists now working out of several locations at 3M's Maplewood campus. Center construction at the intersection of Interstate Hwy. 694 and Hwy. 5 will begin in March and is to be completed in the Finance nizes Ken as the No. 2 executive in the company and the primary internal candidate to succeed me when the time comes," Golub said in a letter to employees.

Chenault, 45, would be the first black person to take control of a company the size of American Express, which Fortune magazine ranks as the 65th largest in the country based on annual revenues. None of the nation's top 100 companies has a black chief executive. The only other black president of a major firm is lion before expenses. He had invested $600 million in the company less than IVi years ago. On the news of the sale, RJR shares fell 3 percent Thursday on the New York Stock Exchange, dropping to Even as he announced the deal, Icahn left the door open to resuming a proxy fight for control of RJR in the future, especially If its stock price should Food companies Carl Icahn sells entire stake in RJR Nabisco Financier says stock price rise dimmed his chances of getting control of board v- '( I tt 4 IK ir Carl Icahn Associated Press NEW YORK Financier Carl Icahn has sold his entire stake In RJR Nabisco, saying a runup in tobacco stock prices had dimmed chances that he could win control of the RJR board and force a speedy spinoff of its food business.

By selling the stock after It gained 35 percent since last fall, the one-time corporate raider appears to have made $130 mil turn lower. Turn to ICAHN on 04 fan "Recent euphoria".