The Newark Advocate from Newark, Ohio • 17

IBM PROFITS RISE IBM said its operating profit rose 7 percent in the first quarter, surpassing analysts' expectations, and the computer giant said it is on track toward financial improvement. Business DOW SOARS The Dow Jones industrial average soared to a record high, closing above 3,300 for the first time on surprisingly strong corporate earnings results. EES Trill (3 asm usiness Caterallair settle strike UAW, i briefing HINSDALE, 111. (AP) The United Auto Workers agreed to end their 5-month-old strike against Caterpillar Inc. while contract talks continue.

But it was not immediately clear how many of their jobs would still be waiting for them. A dispute also developed over exactly when the employees were to report to work at Caterpillar, the world's largest maker of earth-moving equipment. Caterpillar which says it can run its plants with up to 15 percent fewer employees said it needs about a week to decide how many to call back. But the union told the more than 12,000 workers to report today to their jobs in Illinois. "They are telling us to go in groups of four or five," said Pat Diaz.

"The company may turn us away, and the union wants us to document it." The strike drew wide attention because of Caterpillar's ultimatum to workers April 6 to return to work or risk losing their jobs to non-union replacements. The showdown represented the first time a major industrial company has tried to break a union of the size and strength of the UAW bargainers voted unanimously Tuesday to return to work without conditions at the recommendation of Bernard DeLury of the Federal Mediation and Conciliation Service, said UAW secretary-treasurer Bill Casstevens. The union interpreted the recommendation to mean workers should be on the job today, Casstevens said. Caterpillar agreed to stop trying to hire replacements but will be allowed to put into effect its last contract offer, which raises top minimum pay from $35,318 a year to $39,915 in September 1994. The union wants $40,458 by then.

"For now it is over," DeLury said in announcing the breakthrough after two days of meetings at the mediation agency's sub Decatur, Pontiac and Mapleton. Caterpillar, with more than 56,000 employees worldwide, also has plants in York, Denver; and Memphis, Tenn. Brust said strikers who hadn't crossed picket lines before Tuesday won't be allowed back to work before next week, at the earliest. He said workers who returned in the first few days after the ultimatum were guar anteed a job. Those who don't get jobs will go on a preferred hiring list.

Brust estimated that 1,000 UAW members crossed picket lines. Union officials said the number was much lower. Professor Harley Shaiken, a labor expert at the University of California at San Diego, said neither side won. "For the company, their strong point is that they implemented their final offer," he said. "But they have a disgruntled work force, which is no basis for building for the future." urban Chicago offices.

"And it took a lot of guts and a lot of courage on both sides." Negotiations under federal mediation will continue. "The. war is not over," said Jerry Baker, bargaining chairman for an East Peoria local. "Caterpillar's final contract offer is not acceptable." Caterpillar claimed victory because it withstood the union's insistence on a contract patterned after one with farm-equipment manufacturer Deere Co. Caterpillar claimed it couldn't afford pattern bargaining.

"Strikes and pattern bargaining are antiquated principles, and we hope we have just demonstrated to the UAW and ourselves that this is not a very effective way to resolve a dispute," said Jerry Brust, director of labor relations. The walkout began with a limited strike Nov. 4 and spread, idling 12,600 workers at plants in East Peoria, Aurora, Mossville, CLAUDETTE McMILLEN McMillen retires from Rockwell HEATH Claudette i Corky" McMillen is retiring from Rockwell International today after a 35-year career with the company. Retail sales drop steeply McMillen was honored bv 4 i approximately 100 of her fellow emDlovees with a retirement party April 10. She started her career on Jan.

14, 1957, as a clerk in the orderbilling department. In 1972, she was promoted to Retail supervisor of the orderbilling and accounts receivable sales Seasonally adjusted, billions of dollars i departments. With this promotion, she became the first woman to hold a supervisory position at the local Rockwell plant. 158 157 In 1978, she was made 156 a 155 I 154 supervisor of property as well as continuing to be supervisor of orderbilling and accounts receivable. McMillen was promoted to her present position of sales analyst in January 1988.

She and her husband, Pete, live in Hebron. 0 BBBBBBHBB DBB A A SO WASHINGTON (AP) Retail sales in March registered the steepest drop in seven months, the government said Tuesday in a report analysts took as a sign of an uneven, rather than a derailed, economic recovery. The Commerce Department said retail sales fell a seasonally adjusted 0.4 percent from the previous month to $157.1 billion. The dip followed strong gains of 1.3 percent in February and 2.1 percent in January. The figures are not adjusted for inflation.

"It was inevitable those huge increases in January and February weren't sustainable," said economist Sandra Shaber of the Futures Group, a Washington-based consulting firm. March marked the first drop since October and the worst since August. Still, even with the decline, first quarter sales were up 2.9 percent from the previous quarter, the best in more than three years. "This is a relatively small decline and it certainly doesn't signal we're entering another downturn," Shaber said. "I think it's probably a useful reminder this isn't going to be a terrific recovery." Most analysts agree economic growth this year will be far weaker than the 6 percent average during the first year of other post World War II recoveries.

Retail sales represent roughly one third of economic activity overall and economists had welcomed the strong gains in the first two months of the year as confirmation the recovery was underway. They still hold that view, attributing much of the March weak-ness to special factors. Temperatures during the month were colder than normal in many 1991 1992 Mar. '91 Feb. '91 Mar.

'92 $151.5 $157.7 1 $157.1 i "i AP Source: U.S. Dept. ot Commerce 1 parts of the country. Also, Easter falls later than usual this year, likely shifting some sales from March to April. The stock market shrugged off the news, rallying instead on bet-ter-than-expected first-quarter profit at International Business Machine Corp.

and other leading companies. The Dow Jones aver-age of 30 industrials jumped 36.23 to close at 3,306.13, breaking a six-week-old record. Economists said last week's quarter-point cut by the Federal Reserve in short-term interest rates should help stimulate borrowing for autos and appliances in the months ahead, particularly among Americans holding off on purchases. GREGORYFROST Maryhaven board selects Frost Job profile Lynne Corl works diligently as a correspondence secretary at Licking Memorial Hospital. Corl got started at her job as a student, which is to release medical records to patients, attorneys and insurance companies.

She enjoys her work because she helps patients. (T.R. Gleason, The Advocate) Phony-refund artists like electronic filing Judge Gregory Frost of Licking County was recently elected to the board of trustees of Maryhaven, Inc. for a two-year term. Maryhaven is an 81-bed healthcare facility on the southeast side of Columbus specializing in treatment services for alcoholism and other drug addiction which serves the Central Ohio area.

Frost, a 1967 graduate of Newark High School and a 1971 graduate of Wittenberg University, received his law degree from the Ohio Northern University Law School. Frost is married to Kathleen Schaller Frost and the father of three sons: Wesley Adam, 13; Nicholas Brian, 1 and Andrew Gregory, 9. homeless and other downtrodden people, creating W-2 statements of wages earned and filing phony returns to get refunds. "They're basically doing the same thing people have been doing for years with phony paper returns," Roberts said. "Electronic filing has just added an element of speed." If the crook gets a refund anticipation loan, the bank can lose its money.

If no loan is involved and the IRS fails to detect the fraud, it is the taxpayer dollars that are lost. So far this year the IRS has uncovered 659 phony-refund schemes. Two-thirds of the 4,775 bogus returns filed in this schemes were electronic. But most of the dollars claimed were on paper returns, Roberts said. "The average so far this year is over $7,200 per paper return and under $3,200 on electronic returns," Roberts said.

If all the phony returns had paid off before being intercepted by IRS, the losses would have been $10.3 million on electronic returns and 1 1.3 million on paper returns. The 47.2 million refunds paid by the IRS through April 3 averaged $976. The IRS has been fighting phony refunds since at least 1977. This year, the IRS has boosted the staff of those teams by 75 percent, Roberts said. In addition, the agency has conducted seminars for return preparers, transmitting companies and lenders, trying to make them more alert to suspicious returns.

WASHINGTON (AP) Build a better mousetrap, the Internal Revenue Service complains, and somebody will rip it off. So it is with the IRS' much-publicized electronic filing system. In the face of the midnight Wednesday filing deadline, the agency says it is uncovering new schemes by tax cheats to use the high-tech system to get phony refunds. "Just as electronic filing gets returns through the system faster, we have to work faster to catch the illegitimate operators," IRS spokesman Don Roberts said Monday. Electronic filing promises refunds in two or three weeks half the time required for paper returns prevents errors and saves the IRS a lot of clerical work.

A taxpayer hires a tax expert or electronic transmis sion shop to send the return via telephone directly into an IRS computer. Taxpayers who are in a bigger hurry carry the streamlined process another step. They take out a "refund anticipation loan" from a bank or other lender and get a check minus the loan fee in a day or two, as soon as the IRS signals electronically that the return has been received. The IRS refund eventually flows into the taxpayer's bank account, where it is claimed by the bank. More than 10.1 million couples and individuals have used electronic filing this year, and so have a lot of scam operators.

The IRS won't be specific about how all the scams work, but one example involves borrowing Social Security numbers from Auditors claim huge losses threaten MGM Chicago victims get extra week WASHINGTON (AP) The Internal Revenue Service today granted taxpayers affected by the flooding in downtown Chicago an extra week to file their returns and pay any tax due. Returns and applications for four-month filing extensions will be considered on time if filed by midnight April 22, the IRS announced. series of financial blunders and possibly fraudulent transactions, including a $160,000 cash advance made by MGM to Parretti in 1991 that the studio's new management is trying to recover. In February 1991, MGM France sold a valuable plot of French land to a company owned by Par-retti's wife at a price far below fair market value. tinue as a "going concern," according to a securities filing.

The auditor also said that MGM's provisions for losses on lawsuits may not cover liabilities, and that the company's debt is in default. MGM blamed Italian financier Giancario Parretti for leading the studio to ruin. Parretti lost control of MGM CULVER CITY, Calif. (AP) -MGM-Pathe Communications Co. said Tuesday it lost $65.3 million in the fourth quarter and $347.4 million last year, blaming mismanagement by its former owner.

An auditor said the company's future was in doubt. The auditor, KMPG Peat Mar-wick, raised "substantial doubt" about whether MGM can con to continue. MGM is in default on its huge existing debt to the bank; that debt is secured by substantially all the company's assets. "The disastrous actions and decisions of prior management continue to burden this company," co-chief executives Alan Ladd Jr. and Dennis Stanfill said in a statement.

The securities fi'-jng reviewed a last year to Credit Lyonnais, the French bank that provided most of the money for his $1.3 billion takeover in 1990 and soon found itself accusing him of gross mismanagement. MGM said the auditors' main concern is its dependence on Credit Lyonnais' Dutch affiliate, Credit Lyonnais Bank Nederland l.V., for additional capital if it is.