Newspapers / Winston-Salem Chronicle (Winston-Salem, N.C.) / Dec. 21, 2000, edition 1 / Page 8
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As December 21, 2000 Briefs Popular credit union to adopt new R.J.R. Tobacco Holding completes acquisition of Nabisco Group RJ. Reynolds Tobacco Holdings Inc. (NYSE: RJR) announced Dec. 11 that it has completed its acquisition through a merger of Nabisco Group Hold ings Corp. (NYSE: NGH) for S30 a share, or about $9.8 billion. The primary asset of Nabisco Group Holdings after the now-complete sale of Nabisco Holdings Corp. is about $11.7 billion in cash. Proceeds to R.J. Reynolds Tobacco Holdings, after payment is made to NGH shareholders and costs related to the transaction are paid, are expected to be about $1.5 billion. “This is a great transaction for RJR and our share holders,” said Andrew J. Schindler, chairman and chief executive officer of R.J. Reynolds Tobacco Holdings. “We have a central focus on manning shareholder value. This acquisition presents a meaningful opportu nity for us to continue to meet that objective.” NGH shareholders who hold their shares through brokers in street accounts will receive payment for their shares within the next few days. NGH sharehold ers who hold stock certificates will be contacted by the Bank of New York, RJR’s exchange agent, about transmitting their shares for payment. RJR expects ongoing net income per diluted share for the year 2000 to be between $3.90 and $3.95 per share. The company is currently in discussions with the Securities and Exchange Commission regarding the recording of the after-tax gain of approximately $1.5 billion. The net cash proceeds frorn the merger trans action, when added to RJR’s existing cash, will result in cash of between $2.4 and $2.5 billion at Dec. 31, 2000. The company expects total debt at year-end to be $1.7 billion, about*in line with prior estimates. BY PAUL COLLINS THE CHRONICLE Beginning, Jan. 1, 2001, the name of Reynolds Carolina Federal Credit Union will be changed to Allegacy Federal Credit Union (AFCU), a name that combines the 33-year heritage of the financial institution with the loyalty of its members and employees. W.K. “Ike” Keener Jr., president of Allegacy, said, “We wanted a name that reflects our solid founda tion of heritage and a progressive vision that builds on our strong relationships with the communities we serve. Keener The name Allegacy is a combi nation of the words allegiance and legacy. The credit union was sponsored in 1967 by R.J. Reynolds Tobacco Co. as a new benefit to employees who needed a lending and saving institution. Today the credit union serves more than 68,000 members and more than 200 companies who offer it as a benefit to their employ ees, retirees and their families. The word “Carolina” in Reynolds Carolina Federal Credit Union raised some questions in places like New York and New Jer sey, because the credit union had grown beyond serving just Caroli na. So the credit union set about coming up with a new identity to address the growing market. Before the launch of the new name and logo, the credit union contracted the services of the Washington, D.C., firm APCO Worldwide, a division of Grey Communications in New York City, to conduct a name search and to conduct numerous focus group ses sions and tests among its members, employees and volunteer board of directors. APCO Worldwide and the design firm Henderson Tyner Art Co. then worked together to further develop name options. The name Allegacy was the clear winner among those tested. Henderson Tyner Art Co. then t of designing the ney depicts a stylized gi feathers sweep upws first letter of the loj^ Keener said thel cy” ties back to R.J. legacy of giving ba munity. “The new id: the proud heritage s were created. It pret cy for future general symbolizes our ei( giance to our men members’ allegianct* name that symboliz bility, strength and The credit union) name change at a trt mony last week to pletion of the firsts struction on its nei building, located Plaza and Genia D evergreen tree was li ner with the new J# jll it |i * WFU Babcock School adds to staff Wake Forest University’s Babcock Graduate School of Management has announced the addition of Amy Holbrooks, Deborah Muniz and Ned Tobey to its staff. Holbrooks, computer data analyst, assists with the Center for Economic Studies’ Quarterly Review and coordinates data used in faculty research projects. She previously worked for the U.S. Department of Com merce’s National Climatic Data Center. Holbrooks holds a bachelor of science degree in applied mathe matics from the University of North Carolina at Asheville. Mnniz, assistant director of the Wake Forest MBA i. .gram - Charlotte, assists with admissions, student sei-vices, corporate meeting services, financial aid and program operations. She previously worked in Duke University’s executive MBA program. Muniz holds a bachelor of science degree in psychology from Colby College. Tobey, associate director of career services, identi fies employment opportunities for students and gradu ates and develops business partnerships with compa nies. He previously worked in marketing at Sara Lee Corp.’s Champion Division. He holds a bachelor of science degree in psychology from Kenyon College and an MBA from Wake Forest. The Babcock School is ranked among the nation’s best graduate business schools by Business Week, Forbes and U.S. News & World Report, and among the world’s best business schools % the Financial Times of London. Information on the Babcock School is available online at www.mba.wfu.edu. Thanks : 111 a million The Miller Brewing Co. recently donated $ 7 million to the Thurgood Marshall Scholarship Fund during the fund's annual dinner in New York City. Miller Brewing Co. Chairman and CFO John Bowlin, from left; Dwayne Ashe- ly, president of the scholarship fund; and Virgis W. Col bert, executive vice president at Miller and chair of the scholarship fund board, pose for the cameras. For more information about the scholarship, log onto www.thur- goodmarshallfund.org. mm. tV . " OadifSO, A4tii(s Black beer company is growing GMAC vows to fight $ 100 million racism . OAKLAND, Calif.- Three years ago Ralston Brown, Thomas Parker and Michael LeBlanc launched Brothers Brewing Co. - the first African- American owned beer company - with great fanfare and to critical acclaim. Today “Brothers,” whose flagship product is its “Honey Brewed Amber Ale,” has turned the corner with giant steps forward. These giant steps include: sleek new “upscale” packaging; the launch of a new product, Brothers “Classic Golden Lager”; expanded distribution through Safeway, Albertson’s and other major chains; sponsorship of the Golden State War riors basketball organization and more. Company executives see Brothers beer as more than just a beverage. They say it is a symbol for a social “status” or “lifestyle” shared by those who enjoy class, style and great beer. Michael LeBlanc, Brothers president and CEO, said, “Brothers is a celebration of culture, reflecting the essence and style of African Americans by creating a sense of brotherhood for all people.” Can beer be the catalyst for promoting “brother hood for all people?” If the response to Brothers beers is any indication, it’s hard to dispute this possibility. t^ile Brothers’ initial target market is the middle and upper middle class African-American community, its customers cross several ethnic, gender and genera tional boundaries. “We seem to appeal to a large cross section of con sumers... those that love great tasting beer and those that appreciate the ‘cool jazz’ mystique,” said LeBlanc. Anthony “Tony” Harris, chief operating officer and chief financial officer, comes from a high-powered executive position with a Fortune 100 corporation to co-pilot this growing company. “I am very excited about the opportunity to truly make an impact here at Brothers Brewing Co.,” he said. “As we resolve the challenges of becoming a major player in the beverage industry, it is becoming clearer each day that the finan cial upside of the Brothers opportunity is incredible.” Brothers’ success has not gone unnoticed. Recent ly, the LeBlanc/Harris team has been in discussions with several major developers seeking operators for brew pubs in Washington, D.C., Hampton, Va., and San Francisco. BY HAZEL TRICE EDNEY NNPA The General Motors Acceptance Corp. (GMAC), being sued for $100 million for alleged racial discrimination in its car financing practices, has vowed to fight and win the Nashville, Tenn., class action case, which is headed for court in the spring of 2001. “This company strictly adheres to a zero-tolerance policy on racial discrim ination. We’re going to fiercely and vig orously challenge these allegations,” said James E. Farmer, a GMAC vice president. “We believe we will win in court.” Addie Coleman, a Nashville moth er of two, charges that GMAC, one of America’s top automotive lenders, dis criminates against black people by charging them more money for financ ing than whites in the sale of vehicles. The suit was filed under seal two years ago in the U.S. District Court for the Middle District of Tennessee, but recently became public. Lawyers for GMAC have failed in attempts to have the case thrown out. Therefore the suit, which also demands a change in how the company does business, will likely be heard early next year. “They will have the opportunity to present their own version of the facts,” said Gary Klein, senior attorney at the National Consumer Law Center in Boston, one of the lawyers for Cole man. Klein contends that “ The dealer consciously or unconsciously believes that blacks would be willing to pay higher rates and acts on this belief” The lawsuit accuses GMAC, a sub sidiary of General Motors, of being in violation of the Federal Equal Credit Opportunity Act. This federal law declares it illegal for a creditor to dis criminate against an applicant based on “race, color, religion, national origin, marital status or age.” Farmer vehemently denies this charge, saying the lawsuit is based on a “study that is flawed.” Generally, the car-lending process works like this: When consumers go out to pur chase a car, the car dealer does not do the actual money lending. They send the application to other lenders, like GMAC, who then tell them what inter est rate the consumer qualifies for. That interest rate is called the “buy rate.” Car dealers are not legally required to tell the consumer that rate. Nor are they legally required to reveal how much they are marking up the loan. Therefore, dealers get a small fee for arranging loans at the buy rate but can make a lot more money if they can get the consumer to pay a higher rate. These markups, apparently a com mon practice throughout the automo tive industry, are increasingly under scrutiny by consumer protection and advocacy agencies and makers of pub lic policy. They are responding to the concern that some consumers - partic ularly African Americans and women - are targeted, or “profiled,” by dealers for higher interest rates than others. A similar class action lawsuit has been filed against the Nissan Motors Accep tance Corp. (NMAC). Patricia Sturdevant, general counsel for the National Association of Con sumer Advocates, said the mark-up practice has already been cited as dis criminatory. “It is discriminatory on race and on gender,” she said, citing an article in the Harvard Law Review. “The fact is that women pay more and black women pay the most,” she said, dubbing the prac tice “predatory lending,” a common term on Capitol Hill as members of the Congressional Black Caucus push for legislation against unfair lending prac tices that take advantage of minorities and the elderly. Documents filed in the Coleman lawsuit claim, “This practice estab lished a major profit center for dealers in financing, and created a discre tionary credit pricing system which has been the foundation for almost 75 years of racial based discrimination in Amer ican automobile financing.” The Coleman suit claims that this allegation is backed up by a study con ducted by Debby A. Lindsey, a Howard University business professor. Essentially, the study appears to show that black consumers pay 48.9 percent higher finance charge markups (FCM) than whites. “The results indi cate that whites have an average finance charge markup of $643.83 compared to blacks with a FCM average of $959.18,” the study states. That’s an average of $315 higher for blacks, the study states. It adds that this higher rate “is not likely to be due to chance or random events.” But, Farmer said that the study “is not comprehensive enough. And that’s what we’re going to prove in court.” One of the reasons the study is flawed, he said, is because when people apply for GMAC financing, “There’s not race on any of these applications. But there’s no law that says you can’t mark up.” Therefore, he said, GMAC is both within the law and cannot be discrimi nating because the applications received by GMAC ask no information about race, gender, age, class or any of those categories outlawed from car loan applications. What is mostly con sidered, he said, is a person’s credit his tory, income, the length of the loan and the type of vehicle. Farmer added that finance charges are decided privately between salesper sons and customers and that GMAC does not benefit or “share in” the mark-up unless it exceeds 2.25 percent. “But rarely are they over that,” he said. The U.S. Department of Justice, intervening in the Nissa that lenders should i responsible if the dealei car loans are violatil laws. In addition to fighti tie, Farmer acknowledg is preparing to laundi campaign through blaCi on how vehicular finano “I want every consg cated as to the proces vehicle,” Farmer said, an awareness of finac from elementary to advl Coleman couldn’t comment. She filed the suit aft car, financed by GM> Pontiac dealer. The pun in 1995. GMAC had ag the car at 18.25 percent i dealer presented her w contract, which she sigii pay 20.75 percent, whicl her finance cost. She and Betty Case later become a plaintiff case, went to the Nash' vices concerning oth against local dealers. Nashville Legal Se them to a lawyer, Cli who, in the process of challenging the legitims markups, gathered data of GMAC and NMAC Tennessee motor vehick Watkins and his cc asked Lindsey, a How professor, to analyze ' analysis resulted in the i tion suits. GMAC has also ad wrongdoing, reportedly tistical analysis “junk sc “We strive to treat tomers and credit appli
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