| OCR Text |
Show = GheSalt LakeTribune BUSINESS @ CONSUMER CORNER, E-2 M UTAH BRIEFS, E-2 MIDILBERT. ES Mm COMICS, E6 @TV PAGE. E-7 APRIL 28, 2000 Rise in GDP Prompts Inflation Concerns U.S. growth robustin first quarter, with workers seeing jumpin wages,benefits BYJEANNINE AVERSA Labor Department said. Benefits, such as higher health care premiums and bonuses, THE ASSOCIATED PRESS = ATATWirelessmakes strong . debut " ES accounted for much of the gain. For the year WASHINGTON — The U.S. economy ending March 31, workers’ wages and bene- with a sharp uppercut,” said Oscar Gonza- grew robustly in the first three months of fits rose 4.3 percent, the biggest increase in this year as workers enjoyed the biggest jumpin wages and benefits in 10 years, But eight years. That’s good for workers, but economists, after the reports’ release. But a technology including Federal Reserve Chairman Alan stock rally helped blue chips shakeoff fears Greenspan, worry that if companies pass on these rising costs to buyers of their prod- ofhigherinterestrates raised by the reports. The Dow Jones industrial average had fallen ucts, higher inflation could be triggered. as muchas 197 points earlier in the session but recovered to end the day with a smaller loss of 57.40 points to close at 10,888.10. The tech-heavy Nasdaqfinished up 143.94 points at 3,774.08. Bond prices fell as yields on 30year Treasurysrose to5.98 percent from 5.94 that sparked fresh inflation worries among economists and investors. The country’s total output of goods and services, called the gross domestic product, rose at an annual rate of 5.4 percent during the January-March quarter, the Commerce Department said Thursday. Consumer spending, the locomotive of the speeding economy,led the way by posting its largest increase in nearly 17 years. At the sametime,an inflation gauge tied to the GDP rose sharply,reflecting higher energy prices. But what really sent shivers through economists was a spike in workers’ pay and benefits. They shot up 1.4 percent in the first quarter, the biggest advance in 10 years, the “Hold onto your hats as Mr. Greenspan's nightmare is beginning to come true. For a long time now, the Fed chairman has been warning . that the tight labor markets would ultimately cause labor compensation to surge. Well, as usual, he wasright,” said economist Joel Naroff of Naroff Economic Advisors. Amid these worries, some economists said the Fed may boost interest rates by a more aggressive half-point on May 16. All five of the Fed’s rate increases since June 30 lez, economist with John Hancock. On Wall Street, stocks initially plunged percent. The Fed's rate increases are designed to raise borrowing costs for big-ticket items such as homes and cars and in that way cool off demand andkeepinflation from getting outof hand. An inflation gauge tied to the GDP that is have been by a quarter-point. “Instead ofjabs, the Fed may haveto go See GDP, Page E-8 STSNAlliance to Offer Internet to Hotel Guests EquantNV,operatorof the world’s largest data-communications net- work, has formed an alliance with Salt Lake City-based STSNto provide high-speed Internetservice to hotel guests, Bloomberg Newsreported. Equantwill let closely held STSN send e-mail and Webtraffic overits network, which reaches 220 countries. With the newservice, called Hospital’ ity IPNet, hotels also can rentsoftware such as Microsoft Corp.'s Exchange suite, set up networks to link remote locations to headquarters and get voice connections overexisting data lines. Financial terms ofthealliance were notdisclosed. STSNoffers digital subscriber line Webservice fromhotels in 17 states and the District ofColumbia.It installs equipmentin hotel basements to ‘Greate a fast network using copper wires alreadyin place. STSN then puts a small bag with computercables andother gear in rooms,so guests can Jog on without changing their computersettings. STSN’s product requires a connection to a large network, Equantsaid. Amsterdam-based Equant now provides data services to sevenof the 10 largest hotel chains. Convergence Buys Firms Convergence Communications Inc.,a Salt L Lake City company that owns telecommunications networks in Central and South America, has ‘bought Cybernet, the largest Internet Service provider in Guatemala, and ‘the assets of STS, the secondlargest eable company,for $13.5 million in ‘Stock, cash and notes. “©The two companies had 12,000 cus- tomers. Convergence provides cable and telecommunications services, such as Internet access, in nine countries. * In March, Alcatel S.A.,a French manufacturer of telecommunications equipment, agreed to give Convergence $175 million in financing for equipment and services. Last year, the companyraised $83.5 million from investors and obtained a $26 million line ofcredit. US West Faces Lawsuits lorado class-action ora copy case in New Mexico. Ttaleo comand Oregon in coming weeks, and itis investigating filing a similar case against US West in Washingtonstate. The suit alleges, among other things.that the company — which provides local telephone service in ‘Utah and 13other states — distorted ports thatits systems needed to be beeen thaytheraening. oy “customer not educat _ “Webelieve this suit is without merit,” said Seattle-based US West Michael Dunne. action comes Photos by Al Hartmann/The Salt Lake Tribune At left, Sam Eads and Marques Rasmussen of American Fork High School confer as the rest of Utah's best high school automotive technicians huddle overtheir respective Ford Tauruses trying to isolate and repair problems. Above, Scott Barton of Dixie High Schoolrepairs a headlight assembly during a contestat Salt Lake Community College. Top Utah High School Auto MechanicsJust Fix It St. George team takes top honors in competition to find best team in state BY STEVEN OBERBECK THE SALT LAKE TRIBUNE Dixie High SchoolseniorScott Larson replaced the bad charging-system fuse in the new white Ford Taurus, slammed the hood shut andsprinted for the driver'sseat. His teammate Scott Barton jumped into the back seat as the public address system blared out the news: “Car 10 has its hood down.” Standing nearby, Dixie High auto mechanicinstructor Archie Romneychecked his watch. “We have a chance,” Merit Medical News Goes From Bad to Worse BY GUY BOULTON ‘THE SALT LAKE TRIBUNE hesaid as the car slowlyrolled to the finishline. Romneydid nothaveto worry. The St. George team tookfirst place Thursday at the annual Ford/AAA Student AutoSkills Challengeheld at the Redwood campusof Salt Lake Community College. Cottonwood High School’s team of Zack Douglas and EnochEskelson finished second. The contest matched the top high school auto mechanic teams in the state against one another. The 10 two-mechanic teams had 90 minutes to repair identical Ford automobiles,all rigged with the same problems and brokenparts. “Oneofthe hardestproblems to find was thetennisball in the air intake,” Larson said. “It sounded like a huge vacuum leak.” Dixie High’s team members diagnosed andfixed all 10 Merit Medical Stumbles Merit Medical SystemsInc. stock lost more thanhalf its value, plummeting from a high of $11.38 a share on March 24 to less than $5 a share,after the $12 Dollers per Share ‘Thetiming could not have been worse. Merit Medical, which makes disposable medical products used in cardiology and radiology, w: Sec eee OO oe oe Wall Street after several years of solid growth. “We have obviously damaged our credibility,” Lampropoulos said, “and we are going to work to regain that.” tomobile technician program and a trip to Washington, D.C., where they will representthe state at the national finals June19. The contest is designed to encourage students to pursue careers in automotive service, said Rolayne Fair- clough, AAA Utah spokeswoman. The U.S. Department of Laborestimates there will be 30,000 job openings for automotive technicians each year for the next 10 years, and skilled workers are in short Utah Callers Face Addition of Third Area CodeinState See MECHANICS,Page E-2 New Area Code Shate regulators hope to put off the need for a new area code for three years or more by conserving 801 telephone numbers. Should that plan fail, the Utah Public Service Commission has proposed splitting 801, with Weber, Morgan, Davis BY ANNA CEKOLA ‘THESALT LAKE TRIBUNE Utahns could be ringing in 2001 with a new area code under a plan submitted Thursday to the Federal Communications Commission. But first, the state Public Service Commission is renewing its request to federal regulators for the authority to conserve telephone numbers in the 801 and Utah counties receiving a new area Code as early as Dec. 31. [Exes="] area code, a move that could delay adoption of a third area code in Utah bythree to 3% years. the samequarter a yt executive. was thinking they would catch everything in 22 to 25 tough problemstofind.” Barton and Larsonearned scholarships to SLCC’s au- companysaid inventory problems would hurt its first-quarter results. Merit Medical Systems Inc. on Thursday reported a net loss in a quarter that brought one setbackafter another. ‘The company, based in South Jordan, lost $159,482, or 2 cents a share,in the first quarter ended March 31. That compares with a net profit of $565,123, or 8 cents a share, for the comparable quarter last year. Revenue rose 25 percent to $22.1 million compared = bol7 million for Earlier this meh,“Merit Medical warned that inventory problems would hurt its first-quarter results, leading its stock to fall $3.19 a share, or 37 percent. ‘The companythen announced that one of its customers had shut down, leaving Merit with a $340,000 bad debt and pushing the first quarter into the red. “Everything that could have gone wrong, did,” said Fred Merit Medical’s president and chief problemsontheir car in a little more than 45 minutes. “I minutes.” Romney said. “So obviously they had some Apr A Feb Feb Mar Mar Ca 2000 Source: Bloomberg Business News Rhonda H. Maylett / The Salt Lake Tribune se YF That may take some time. Wall Street pays a premium for predictability. And investors were drawn to Merit Medical’s consistent earnings ings growth “Nowthat is gone,” said ‘Lantz Stringham, an analyst with the Red Chip Review. Merit Medical stock closed Thursday at $4.64 a share off 59 percentfrom its peak of $11.38 a share in March. The company said its problems began when it started building inventory ex- pecting higher orders late last year See MERIT MEDICAL, Page E-8 * Should the conservationeffort fail, the commission is proposing to split Utah's original 801 area code with the new Rest ofState (435) numberassigned to Davis, Morgan, Utah and Weber counties. Only Salt Lake County would retain the 801 area code. ‘The new area code, expected to be assigned by the North American Numbering Plan Administrator (NANPA)within two weeks, would be activated Dec.31 ina “permissive dialing period.” During that period, perhaps extending to June 2001, callsin the affected communities could be completed usingthe old or new code. The commission had hoped to keep Salt Lake and Davis counties in 801, but under US West call boundaries, some Davis County neighborhoods would have been divided between area codes, officials said. Current local calls between Salt Lake and Davis counties, however, Mike Miller/TheSalt Lake Tribune would not become long distance undér the pro The commission rejected an industry recommendation for an area code overlay, which would have imposed a new code on top of the entire 901 area, requiring callers along the Wasatch Front to dial 10 or11 digits, evenif trying to reach See CALLERS,Page E-2 + \ |
