The Michigan Daily-Wednesday, July 28, 1982-Page 5
Federal deficit predicted
to reach $140 billion
(Continued from Page 1)
ministration felt the Congressional
Budget Office was "unduly pessimistic
about the recovery and also unduly
pessimistic about the impact of a suc-
cessful budget resolution on the
THE BUDGET approved by
Congress last month forecasts a deficit
of $103.9 billion for the fiscal year that
begins October 1, declining to $60 billion
"We think that whatever view is held,
either the CBO's or the ad-
ministration's, it serves to underscore
the need to press ahead for successful
implementaiton of the spending reduc-
tions required by the budget
resolution," Speakes said.
The differences the administration
has with the non-partisan
Congressional Budget Office once again
center on "different assumptions, dif-
ferent predictions for growth," he ad-
TREASURY Secretary Donald
Regan said Sunday that the ad-
ministration's revised forecast would
have a deficit of $110 billion to $114
billion, declining to around $70 billion in
But Rivlin said a variety -of factors,
including a slower-than-expected
economic recovery, could add $25
billion to $35 billion to the 1983 figure,
and increase the figures for the
following years as well.
"I don't think we can havea vigorous
recovery" with deficits of that size,
Conditions in El Salvador
\ better, administration says
(Continued from Page 1)
ces, although the official said the
United States has "received reports on
more than one occasion of torture and
has taken them up vigorously with the
He said that besides finding im-
provement in human rights and gains in
land reform, the certification said
progress had been made in the in-
vestigations of the killing of four
American churchwomen Dec. 2, 1980,
and two U.S. agrarian reform advisers
a month later.
THAT FINDING was made even
though a House-passed bill to add the
issue to the certification was not given
final passage by the Senate until two
hours after Shultz had approved the
As part of the 1981 foreign aid law,
Congress requires twice-a-year fin-
dings that progress is being made on
human rights and economic reforms in
Without such a certification, U.S. aid
to El Salvador-totaling $81 million in
military assistance and $104 million in
economic help this year-must be cut
off. The law contains no provision for
Congress to overturn the president's
Doily Photo by DOUG McMAHON
Construction on a new bridge off of Fuller Rd. creates a grid over the Huron
River. The University's Hospital Replacement Project looms in the
Worker-owned factory rated a profitable success
;Continued from Page 3)
Under the new management system,
incentive bonuses based on sales are
distributed equally to everybody from
the president to hourly employees.
Bonuses rose from about $26 a week in
November to about $34 a week in Mar-
ch, says Jeanne Marie Leahy, the com-
.pany's supervisor of personnel.
When GM agreed to sell the plant to
the workers, it also agreed to buy about
$100 million worth of bearings a year
for the next three years. Hyatt-Clark
recently added Chrysler Corp.,
Federal-Mogul Corp. and International
Harvester Co. as customers.
"WE'RE HAVING a very good recep-
tion in the market place," says Howard
Kurt, Hyatt-Clark's new president and
chief operating officer, "We're com-
petitive now when we weren't before.
Our quality is much better."
When the firm was opened, workers
agreed to pay cuts that reduced the
average hourly wage from $12 to $8.50.
None of their 14 personal days off were
eliminated and maximum vacation
time was cut from four weeks to two.
Disability benefits and life insurance
coverage also were reduced.
In addition, the number of job
classifications was cut from 22 to eight,
and the firm's managers say that has
increased productivity because each
worker can now perform more tasks.
HYATT-CLARK IS one of an
estimated 4,000 to 5,000 worker-owner
firms in the country, according to the
Washington-based ESOP Association of
America. ESOP is an acronym for em-
ployee stock ownership plan.
In most such plans, owner stocks are
purchased by a trust for the workers.
Hyatt-Clark employees put up no
money of their own to purchase the
shares; instead, the trust borrowed $53
million from banks and GM. The plant
and the company itself is the collateral.
Money borrowed by the trust to pur-
chase the stocks is repaid from the ear-
nings of the new company. As the loan
is repaid, employees - who have
shares of the trust - accumulate
shares in the company.
HYATT-CLARK'S DEBTS are to be
retired in 1991. Until that time, the firm
will be run by a 13-member board of
directors selected by the workers,
management, the union, and the in-
stitutions involved in the financing. The
board selects plant management.
The plant union, United Auto Workers
Local 76, plays a major role in the com-
pany and will ultimately appoint half
the board of directors.
"This company is much more under-
standing to workers," says Jimmy
May, president of Local 736. "Grievan-
ces are almost non-existent because
even though there are still disputes,
they're settled on the floor."
THE NEW COMPANY went into the
tilack for the first time in March, tur-
ning a profit of $400,000, says Alan
Lowenstein, the attorney who helped
the union buy the plant and now is the
firm's board chairman.
"I'd say there is no question in my
mind that this company will survive,"
Lowenstein says. "The question is how
profitable it will be and how fast we'll
pay off the debt."
Cost-cutting remains a top priotity in
the old, red-brick plant. Productivity
charts and utility bills - which have
dropped from about $610,000 in March
1981 to $500,000 this past March - are
prominently posted. Furniture and
decorations in executive offices are
THERE ARE OTHER challenges.
For one, the workers will have enor-
mous debts to pay off.
The plant still manufacturers
bearings used in rear-wheel-drive cars,
and Kurt says the company needs to
broaden its line of products.
"How we do really depends on auto
sales," Kurt says. "If auto sales don't
come back, it will be a struggle."
But optimism is still the thread that
binds the board room to the assembly
"This isn't capitalistic or socialistic,"
Mazzeo says. "The choice was wither
doing what we did or closing the plant.
It was our money and we did what we
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