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 recovery." 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 in 1985. "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- ded. 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 1985. 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, Rivlin said. 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 Salvadoran authorities." 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 document. 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 El Salvador. 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 decision. Doily Photo by DOUG McMAHON Gridwork 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 background. 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 spartan. 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 line. "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 could do." Earn $3 in 1/2 hour in Psychology Experiment Call J. Witherspoon at 665-6094 9-11 am or 3-5 pm any day KANA' A new family restaurant! Korean & American Foods Available Oriental vegetarian dishes Quality food and fine service Our soups prepared daily Free parking available "We're cheap but we're goon" 9 am-9 pm 1133 EAST HURON Monday through Saturday (former location of Raja Roni)