And Now Just Cars

Some companies try to get out of trouble by diversifying into new fields, but American Motors Corp. has traveled the opposite route. Last year the debt-ridden automaker sold off its profitable credit subsidiary, Redisco Inc., to rival Chrysler Corp. That left the appliance-making Kelvinator division as A.M.C.'s only major operation outside of the automobile business--and A.M.C. ever since has been seeking a buyer for Kelvinator.

Last week it appeared to have found a taker in Cleveland-based White Consolidated Industries Inc. White's acquisition of A.M.C.'s Kelvinator assets, the two companies announced, was "in the final stages of negotiation." A broadly based (heating equipment, industrial machinery and sewing machines) manufacturer with sales of $700 million a year, White has already purchased two appliance makers in the past year, is obviously confident that its experience in the industry will enable it to perk up Kelvinator, an operation that has made little, if any, money in recent years.

For A.M.C., which after two years of deep deficit showed a $1,133,775 profit for the six months ending March 31, shedding Kelvinator will provide some of the cash necessary for continued recovery. The purchase price is expected to be about $45 million, and A.M.C. is sure to apply at least part of that toward a $52.5 million short-term bank loan due at the end of the year. Equally important, income from the deal could enable the company to move further into the production of parts, thus reduce its costly reliance on outside suppliers. As A.M.C. Chairman Roy D. Chapin Jr. sees it, the sale of Kelvinator opens the way for "further integration or diversification" within the automobile business itself--which is, he noted, "our prime interest."

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