Waterloo Courier Cedar Falls Record (Newspaper) - June 22, 1984, Waterloo, Iowa Inside look Gary Kroeger reflects on the past and future of Saturday Night Live See page C1 Festival fun A full schedule of activities for Sturgis Falls Festival IX can be found Leisure Time section FRIDAY WATERLOO IOWA 25 cents JUNE 22 1984 46 PAGES 4 SECTIONS Chance of rain Page A10 Need to improve A presidential says improved worker relations are needed See page D4 King of the trials Carl Lewis nailed down his fourth Olympic Berth Thursday See page B1 Flood aid promised Gov Terry Branstad promises financial aid for flood victims See page Huge blast may have cut intp Soviet arms stockpile TkA The Washington Post WASHINGTON A massive explosion last month at the principal ammunition depot for the Soviet Union's Northern Fleet is believed to have destroyed to one-third of the fleet's surface-to-air missile stockpile as well as a number of cruise missiles sources say The mid-May blast at Severomorsk on the icy Barents Sea about 900 miles north of Moscow was so powerful that Western intelligence agencies initially suspected it was a nuclear explosion a possibility that since has been discounted It did a hell of a lot of official said We could put it this this would not be a good time for the Soviets Northern Fleet to engage the U S Navy The United States and its allies are keenly interested in the disaster because of its implications for the readiness of the Northern Fleet considered the Soviets largest and most important naval force Surface-to-air missiles used to shoot down enemy aircraft are vital in defending warships from attack THERE WOULD be a lot of reasons to be interested in something of that nature Any explosion of that magnitude would of course decrease readiness in weapons one official said You also have the question of if it did blow up by what are the safety procedures It implies poor quality control U.S analysts are uncertain of the cause of the blast which was detected by spy satellites including some reportedly capable of detecting seismic disturbances one source said Neither the CIA nor the Defense Intelligence Agency would comment on the explosion One official said the the worst and most recent in a series of explosions during the last six months at Soviet military installations Ke would not elaborate The blast came on the heels of the largest Soviet military exercise ever in the Atlantic Ocean which involved dozens of warships steaming around Norway's North Cape One senior U.S official said the exercise may have been the reason for stockpiling such a large quantity of munitions in one place The losses they sustained would seem to Lave violated normal prudence in storing the weapons he added The Northern Fleet complemented by Soviet fleets in the Baltic Sea the Black Sea and the Pacific Ocean consists of one aircraft carrier 148 other surface ships 190 submarines and 425 warplanes according to the latest U.S estimates ASSOCIATED with the fleet are two major tions Severomorsk and which lie on opposite sites of the Kola River north of the city of Murmansk Located north of the Arctic Circle Severomorsk is roughly 60 miles east of the border One source said U.S intelligence picked up rumors in Moscow last week that there was a big cloud radioactive and drifting toward populated areas It is not unusual for Soviet disasters natural or to be ignored in the Soviets controlled news media A spokesman for one Western European embassy Certainly we've picked up the same story it seems pretty clear that it definitely was not a explosion Members of the House Armed Services were given sketchy details of the explosion in a by Pentagon intelligence officials last week one official said but a fuller account has been closely guarded because of concern that will be compromised seen as key to Rath takeover By JOEL McNAIR Staff Writer If Adam Weinreb caa close a million financing agreement the con- New Jersey Businessman could have control of Rath Packing Company within two months A Rath attorney said Thursday that Weinreb is within days of obtaining a million financing commitment from a Chicago financial firm If he receives a letter of commitment from the Walter E Heller lending tion by July 15 Weinreb may gain control of 65 percent of stock Details of the prospective deal be- tween Rath and Weinreb were in- cluded in a memorandum of ment filed Thursday in federal bankruptcy court in Cedar Rapids The memorandum provides lines for a reorganization of Rath with Weinreb playing a prominent role in the new company the million financial ment is the key to a transaction be- tween Rath and Weinreb said Rath attorney Ron Peterson The letter of commitment and the plan for re- organization must be approved by Rath management and employees and either the federal bankruptcy court or a U.S district court Rath President Lyle Taylor said Thursday that he expects a deal to be completed within 45 to 60 days SOME OF the steps necessary for a Weinreb takeover have already been sources said Thursday The memorandum has been approved by the Rath Board of Directors and the court-appointed Employee tors and Equity Holders Committee which represents i owners Bankruptcy judge William Thinnes is expected to OK the memorandum next Friday the y The million commitment for financing if it is forthcoming must also be approved by the three parties plan for reorganization must also be approved The memorandum states that court proval reorganization must be obtained by Aug 1 Time is of the states one portion of the memorandum Taylor said the agreement will not necessarily be a sale He said it is a financial arrangement to reorganize the company Negotiations could also fall Taylor emphasized But Rath has agreed not to conduct with another party through Aug 1 pending court approval of the memorandum next Friday As detailed in the memorandum Weinreb would be hired as a special consultant to Rath when the million letter of commitment is proved Weinreb would aid Rath agement in formulating the re- organization plan handling financial arrangements and raising capital Peterson said that about million from the financial commitment would replace current line of credit with Security Pacific Credit Inc the company's primary lender Up to million would be available to provide Rath with additional working capital Weinreb is president of American Meat Packers Corp a Dover Del firm and the agreement would be between Rath and AMP Peterson said he believes three other investors are involved in the company IMPORTANT points in the memorandum of agreement AMP will operate the current Rath meatpacking plants in Waterloo and San Antonio Tex the most appropriate and economically cient current ees Rath operations will be ex- to a maximum level as soon as possible As soon as operations expand and economics AMP will reopen Columbus Junction plant AMP may sell the plant and operate it on a leaseback operation AMP does layoffs or employee reductions Upon completion of the ment a special shareholders ing will be called to elect a new board of directors Two thirds of the tors will be nominated and elected at the direction of AMP with the re- maining third elected by the other stockholders in the reorganized com- pany AMP will receive at least 65 percent of the new company's stock The reorganization will require em- ployees to give up their stock owned under the Employee Stock Ownership Plan Chuck Mueller a ber of the Employees Creditors and Equity Committee said Thursday that he did not see how a deal could be completed that retained majority em- Mueller said ESOP members will the negotiations and then meet to decide whether to sell their stock The decision would apply for the entire bloc of ESOP shares which currently compose about 50 percent of all Rath common stock Peterson said that Rath is in- Weinreb's background The old West German grant was sentenced to five years in prison in Belgium in connection with a bankruptcy fraud Weinreb left Europe before serving his sentence He also purchased a bankrupt West German packing company in 1982 and the company failed shortly after- ward Weinreb recently attempted to purchase Wilson Foods plants in Cedar Rapids and Albert Lea Minn but the deal fell through when union representatives objected to the trans- action r He has caused us some concern but it's nothing that can't be over- Taylor commented Thursday Taylor said that he has been asked to return as Rath president if the company is reorganized under Weinreb's control The reorganization plan must be approved by the bankruptcy court as Rath is operating under Chapter 11 protection of the federal bankruptcy code Rath filed for protection last fall Taylor reported at the company's recent annual meeting that Rath lost almost million last year Put em I Two unidentified men tangle over a right-of-way dis- pute on a downtown Chicago street The pedestrian wearing jacket accused the bicycle rider of crossing AP his path and the fight began At bottom right a passerby moves the bicycle out of the way The match ended in a draw witnesses said Consumer prices show tiny rise WASHINGTON AP Consumer prices restrained by the steepest drop in food prices since last June inched up just 0.2 percent in May the government said Friday Also aiding the moderation in the overall price increase which rose at a rate less than half that of April was a tiny 0.2 percent gain in gasoline prices So far this year inflation is running at an annual rate of 4.6 percent as measured by the Labor Department's Consumer Price Index That's slightly better than most analysts predictions of a 5 percent inflation rate for all of 1984 and seemed to fly in the face of some forecasts that the economy's ingly strong growth could rekindle more serious inflation ATTHE White House presidential spokesman Larry Speakes Inflation remains under control at the shopping counter We're on the right course of growth with low inflation Last month's 0.2 percent food price decline was the result of cheaper beef and veal poultry vegetables and Over the last three months food prices have tumbled at an annual rate of 1.5 percent Food prices had held steady in April after falling 0.1 cent in March As for energy the department said that through last month gasoline prices which normally rise at the start of the summer driving season were 11.8 percent below their peak level of March 1981 Gasoline prices had been up 0.4 percent in April and a full 1 percent in March For the last 12 months prices over- all have risen 4.2 percent The price index had risen 0.5 percent of April and 0.2 percent of March Retail prices rose 3.8 percent last year for the best showing since the early 1970s Prices rose 3.9 percent in 1982 after shooting up 8.9 percent in 1981 and 12.4 percent in 1980 Friday's report was in line with Wednesday's preliminary estimate on the Gross National Product the total value of the nation's goods and services THAT REPORT which projected the economy growing at a robust 5.7 percent annual rate in the current quarter also estimated an inflation rate of 2.8 percent in the April-June period the slowest climb in years Inflation according to that measure had been 3.9 percent in the first ter So that's where it's been all these years DAVENPORT AP car stolen eight years ago has been found tacked under a tarp in a corner of an old parking area at Davenport's Blackhawk Hotel where went unnoticed for many years The hotel's new general manager William Wolf came across the Lincoln Continental Mark IV still in excellent condition when he was making a tour of the hotel shortly after taking Wolf told a security guard at the hotel Feller who also is a Scott County sheriff's deputy to check the car's serial number The car turned out to be stolen in 1976 from Uptown Motors in Muscatine No one knows how the car got to the old hotel parking area now used for warehouse space or why it bad been there long enough for its tires to begin rotting Bud Henley a salesman at Uptown Motors for 26 yeans closed up the dealership one Monday night in 1976 The next morning the car was no one noticed it again until last Friday I ended up in some salvage lot In Henley v A sheriff's said U is possible the car has been parked at the hotel ever since was stolen The car which has miles on it will be turned over to the insurance company which paid oft on the theft eight yean ago Deere to lay off 600 more By RON CHRISTOPHER Staff Writer Another 600 Deere Co employees will be out of work in August the total of Deere here to The layoff which will leave only blue collar Deere employees in Waterloo amounts to nearly a 10 percent reduction of the firm's wage employees here It's a direct result of lower than anticipated sales of large farm tors in the Midwest according to a company announcement Friday TRACTOR sales in the spring didn't improve as Gordon Tjelmeland Deere's ager of community relations said Because of the weak sales the company in August will reduce its daily production of large farm tors thus lowering dealers tories Asked how long the latest layoff might last Tjelmeland said I really don't have any idea It's totally dent on the economy and that changes week by week and month by month He said the layoff would occur after the annual plant shutdown which ends August 5 at the Engine Works and Product Engineering Center and August 12 at the Tractor Works and Component Works Tjelmeland said the layoff in all likelihood will include employees from all four operations He said a breakdown by operation probably won't be available until the end of next week Mike Atkins vice president of ed Auto Workers Local 838 said the Component Works probably would be hit the hardest since it's the largest the four operations Atkins said the layoffs would be on the basis of seniority REACTING to Friday's announcer ment Atkins said It's just further proof of the failed farm policy Reagan administration j Atkins pointed out that the Deere workers who will be laid off j when the latest cutback occurs are only those still eligible for recall j rights 1 There are another 766 former em- j ployees who have lost their recall rights according to Tjelmeland and I who are not considered to be laid off 1 Tjelmeland said worldwide tion of all John Deere products for the 1984 fiscal year will be almost 13 percent higher than the tonnage I produced in 1983 despite the latest layoff
