MASSIVE MINING PROJECT NORTHEAST OF CITY
Secret talks indicate coal deal imminent
by GEORGE OAKE Southam News
 VANCOUVER - A multi-billion-dollar coal export deal with Japan is imminent following a high-level meeting between British Columbia and Ottawa.
  Southam News has learned that B.C. Economic Development Minister Don Phillips boarded a Canadian Pacific train highballing through the Rockies last week for a secret summit to sort out federal-provincial differences on the coal deal.
  On board the train Transport Minister Jean-Luc Pepin and Senator Bud Olson, the minister of state for economic development. put the project back on the rails in the literal and figurative sense.
  The massive coal deposits are about 160 km northeast of Prince George and a major sale to Japan is expected to have considerable impact on Prince George.
POLISH CRISIS
 Labor revolt still growing
   GDANSK. Poland (AP) — The Polish strikers' central committee said agreement had been reached with the Communist government on many “serious points” and negotiations would continue today in Gdansk.
    Meanwhile, the massive strike wave on the Baltic coast was reported to have spread to the giant Ursus tractor factory outside Warsaw and to industries in southern Poland. Estimates of the total number of strikers rose to more than 300,000.
    Lech Badkowski. spokesman for the Inter-Factory Strike Committee, said talks
Hostage
stand-off
continues
   MONTREAL (CP) - Nine convicts continued to hold 11 hostages today at the maximum-security Laval Institute, more than 48 hours after an escape attempt was foiled by guards.
    The hostages, held in the open in the rain-soaked prison yard, slept fitfully in damp clothes Tuesday night or paced back and forth in the narrow space between the prison wall and a line of police sharpshooters.
     The rain had let up by morning but the weather remained threatening and overcast, and it appeared the affair had assumed the familiar pattern of a long seige. with prison officials offering small concessions in return for the release of captives.
    That was the case Tuesday morning as Marcel Ostiguy, a 62-year-old shop instuctor who suffers from a heart ailment, was released in return for soft drinks and sandwiches — the first time the men have eaten since the incident began.
     The prisoners, including six convicted murderers, were armed with four handguns and several homemade knives as they burst out of the the prison welding shop about 8 a.m. Monday, gathering hostages along the way. Once in the yard, they tiled to hijack a garbage truck.
     In a gun battle with guards in surveillance towers. John Con* nearney, a 44-year-old American serving life for the murder of a Montreal policeman, was shot and killed as he made a dash for the truck.
    The other prisoners backed up against a wall of the ll)8year-old prison, shielded by their dozen hostages including four guards, four shop instructors , a driver, a laborer and the two garbage truck drivers.
  They have remained there since early Monday morning. Little negotiation had taken place and the prisoners showed no signs of weakening despite lack of food and the light rain that fell Tuesday afternoon.
Photo page 7
 here Tuesday between a working group of five strike leaders and five government officials were very promising. He declined to give details, but said the government planned to contact the committee for more talks today.
   The government’s chief negotiator. First Deputy Premier Mieczyslaw Jagiei-ski. went back to Warsaw to report to the Communist Party Politburo. He was expected to return to Gdansk today.
    Jagielski held an often-noisy exchange Tuesday with a delegation of the strike committee at the V. I. Lenin Shipyard in Gdansk, where the mass walkout began Aug. 14
    Jagielski said in addition to the secret, democratic election of trade union officials promised Sunday by Communist Party Leader Edward Gierek. the revision of the labor laws would permit strikes in the industrial coastal region if all other means of solving disputes failed. But he refused to budge on the workers’ demand for independent labor unions free from government controls and said he was negotiating only for the Baltic industrial area, not other parts of the country.
   This attempt to isolate the coastal workers angeied the strikers. They rejected any geographically restricted settlement, reiterated their demand for free trade unions and threatened a nationwide general strike.
  Broadcasts from Lodz. Poland’s second-largest city with a population of 820,000. said many transport workers struck there.
See also page 5
Boycott of cargo promised
  NEW YORK (Reuter) -U.S. dock workers on the Atlantic coast and the Gulf of Mexico will refuse to handle cargoes to and from Poland beginning today, Thomas Gleason, president of the International Longshoremen’s Association, announced.
   The ILA boycott, planned as a demonstration of solidarity with striking Polish workers, was decided on last week but was delayed until international labor unions in Europe were notified, Gleason said
   He said that those unions have since sent letters of support to the Polish strikers.
   The 110,000-member ILA represents dock workers at ports from Maine to Texas. Gleason said the ILA workers will "finish whatever we started on the one Polish ship working here, and then no Polish cargo will go on any ships.”
   Asked how long the ILA boycott will continue, he said only: “We’ll play it by ear.”
   The boycott is expected to disrupt valuable grain shipments to Poland.
offered by the Japanese steel companies.
  Ottawa spurned the provincial plea because it estimated the federal share of the subsidy would cost Canadian taxpayers $120 million for a six-year contract, an unacceptable political price for a regime facing a $14 billion deficit in 1980
  News that the Canadian companies - Dennison Mines of Toronto Ltd.. RP Canada Ltd.. Teck Corp. of Vancouver — and Japan's steel industry narrowed their price difference to Sl per tonne appears to have galvanized Ottawa and Victoria.
       The deal is not as fragile as suggested.” explained one federal official. “It's looking like quite a constructive period.”
  He indicated the $50 million federal offer for upgrading and serv ices at the proposed coal port of Prince Rupert was “still there.” and perhaps even more important, hinted Ottawa might sweeten its commitment if final bargaining faltered.
   Huge coal trains from the fields would be diverted east at Prince George to a proposed coal port at Prince Rupert.
   Development of the rich northeastern B.C. metallurgical coal deposits caused bitter wrangling and name-calling between Victoria and Ottawa for months. Soon afterward Premier Bill Bennett disdained federal financial help, vowing
the province would “go it alone” on developing the coal deposits.
A month ago B.C. asked Ottawa for $3 of a proposed $5 per tonne subsidy on rail costs. B.C. would absorb the remaining $2. closing the gap between the $84-$86 per tonne price asked by Canadian companies and the $74-$76 per tonne price
Losses cited
as papers closed down
  TORONTO (CP) - The Ottawa Journal and Winnipeg Tribune were shut down today, throwing almost 750 employees out of work, as Canada’s two largest newspaper groups cut some of their losses in a series of dramatic moves that shook the Canadian newspaper world.
   News of The Tribune’s closure was delivered to its 370 employees by Gordon Fisher, president of Southam Inc., less than 12 hours after The Journal’s 375 workers learned of that paper’s demise from Thomson Newspapers Ltd.
   Both groups cited substantial financial losses.
   Separate announcements from the two Toronto-based groups also disclosed that Thomson had sold its 50-per-cent interest in Pacific Press Ltd. of Vancouver and its one-third interest in Gazette-Montreal Ltd. to Southam for $57.25 million.
   The Southam group publishes 14 Canadian newspapers, including The Citizen in Prince George.
   There were no immediate changes announced for the Vancouver Province, a morning daily, or the afternoon Vancouver Sun, both owned by Pacific Press, but Southam’s Fisher noted that the Vancouver market is growing and prosperous.
    He promised "re-analysis of the company’s organization” with the possibility of exploiting additional markets in British Columbia.
'Combines'
investigation
launched
  OTTAWA (CP) - The federal combines investigation branch has started to look into a series of newspaper closures and consolidations announced today.
    Robert Bertrand, the head of the branch, met for two hours today with lawyers for Southam Inc. and Thomson Newspapers Ltd. The two groups said they will open their books to federal officials.
   Bertrand said the lawyers said that the sale of Thomson’s 50-per-cent interest in Pacific Press Ltd. of Vancouver to Southam would not lead to a closure of either The Sun or The Province.
   But that deal, plus the closure of the Winnipeg Tribune by Southam and the Ottawa Journal by Thomson and the sale of Thomson’s one-third interest in the Montreal Gazette to Southam, creates a difficult problem for the combines branch.
    To bring a case against the firms for violating federal anti-merger laws would require proving that not only has there been a lessening of competition but also that the operation is a detriment to public interest.
   Today’s announcements climaxed a year’s series of changes within the newspaper industry which included: —closure of the 111-year-old Montreal Star 11 months ago, putting 969 people out of work, due to substantial operating losses following an eight-month strike by pressmen;
    —a fierce bidding war in February' which left FP Publi-
  See NEWSPAPERS page 2 ★
Moves
'sound
business7
   TORONTO (CP) - Although the closing today of the Ottawa Journal and Winnipeg Tribune is "not the kind of thing you like to see,” it is a sound business move as Canada’s two dominant newspaper chains consolidate their operations, says a Montreal communications analyst.
   Barry Gruman, of Jones Heward and Co. Ltd. investment consultants, said in a telephone interview it is becoming clear "from a business point of view, that it’s very difficult for most cities to support two newspapers.” Commenting on a combines investigation of the moves, he said:
    “You’re looking at situations where the No. 1 newspaper is making perhaps one-per-cent return on it’s investment and the second-largest may be losing 20 per cent,” he said, “it’s not like these companies are making 20-per-cent profit and want to make 30 per cent.
     “You don’t like it at all, but the figures these companies can produce for the last five years make it an open-and-shut case from a business point of view.”
   “We’ve seen Thomson (Newspapers Ltd.) and Southam (Inc.) established as the two dominant newspaper chains in Canada and each is becoming associated with a specific market.”
   He said Thomson now has taken care of the main problems it inherited when it gained control of FP Publications Ltd. in January.
    With the closing of the Journal, sale of Pacific Press Ltd. and sale of the Calgary Albertan, now the Calgary Sun, and merging of the Victoria Times and Victoria Colonist, it has disposed of four of the eight newspapers it acquired.
    “Thomson had to clear up its situation in Calgary and Ottawa, where it was in a competition situation with others," he said.
 ”In Calgary, from a longterm operating point of view, the city might eventually be able to support two papers ... but Thomson wasn’t prepared to absorb years of losses.”
Short break
Citizen photo by Brock Cable
 Letter carrier Sheryl Provencal, 21, found a momentary shelter from the rain at her mail dropoff box during rounds today. Deliveries were lighter because of a strike by Vancouver postal workers but Prince George posties may find their bags heavier Thursday, as the workers returned today and are clearing up the backlog. Story, Page 3.
CITY FIRM SOUGHT ARAB LOAN, BUT . . .
'An unusual way to do business'
   Big money, machine guns, Arabs and an international “financier” named Hassan Zubaidi didn't make a palatable cocktail for Prince George Breweries president Bob Naismith.
  Naismith almost made a deal to borrow $43 million from the Beirut, Lebanon-based “financier” but managed to escape with his wallet intact.
   Zubaidi has become famous in the last few months for offering huge low-interest loans.for an up-front initial charge.
   Once Zubaidi has the initial payment of good faith, he would give the borrower a
 brush-off without any loan.
   Zubaidi never leaves Leba-non where he is surrounded by armed guards and protected by government officials.
   Naismith’s dealings came before it became well-known how the Arab operated.
   "His name was given to me by a San Francisco businessman last April when I was seeking capital,” Naismith said.
   "We contacted Zubaidi and he said he’d give us unlimited loans for nine per cent so I flew to Lebanon.”
   Naismith said the minute he
 landed he was surrounded by men with guns.
   "The country is in a war and everybody carries machine guns and rifles and pistols.” Naismith said he flew into Lebanon on a Saturday and flew out Sunday after experiencing “quite a performance”.
   "He told me 1 could have $43 million but I’d have topay him $15,000.per million before he could begin to get the money together.
   "He showed me all sorts of official-looking documents showingother loans —one was a huge sum for the Mexican
 government, with an official seal.
   "I was suspicious when he wouldn’t agree to putting the front money in a trust account (in case he was a fraud) but 1 wasn’t going tocall him a crook in front of two guards on either side of me with machine guns.”
   Naismith said he begged out of the meeting, went back to his hotel, contacted a Lebanese lawyer whose name he had, to check out Zubaidi.
   “He wouldn’t say Zubaidi was a crook but the answers told me that he was not to be
  See UNUSUAL page 2
Citizen-%,
Vnl 9^- Mn 1K7	YVoHnocrlav Allfflict 27 lOQft	Prinra	D.tii.k ___u!_ ^
  Single Copy 20*
  Outside Prince George
Vol. 25; No. 167 Wednesday, August 27, 1980 Prince George, British Columbia
TODAY
 “We’re treah out."
FEATURED INSIDE
 Got a news tip? Call The Citizen’s 24-hour news line at 562-2441.
 Federal aid eyed
 The federal government is considering financial help to struggling equipment giant Massey-Ferguson. Page 7.
Canada caches Czechs
 An international hockey coup has been pulled off by the Quebec Nordiques, who have signed two top Czech stars. Page 13.
 Index
Bridge............................... 19
Business..........................8,9
 City, B.C...........2,3,10,25,40
 Classified.................... 16-23
Comics..............................36
 Community page............38
Crossword....................... 18
Doctor Game................... 28
D C
Editorial.............................4
 Entertainment...........36,37
Family..............................41
Horoscopes.....................36
Internadonal.....................5
National.............................7
 Sports.............. 13-15, 42-41
Television........................37
THE WEATHER
D
  Enough already! The weatherman says we’re the only wet spot in the province and predicts more cloudy skies with showers today and sunny skies with afternoon showers Thursday. The forecast high today is 15. the low 3. Thursday’s expected high is 18
   The high Tuesday was 14, the low 9 with 19.8 mm of rain. On this date last year the high was 27, the low 11. Sunset today is 8:16 p m. Sunrise Thursday is 6:10 a.m. sunset is 8:13 p.m
L^tjn—
Details Puge 2
NOW HEAR THIS
 • An interdepartmental bulletin, calling forcorrect spellings of names of a company, had one of the officials listed as the P R. (public relations) flack. The bulletin came back with the note, “We can’t find out who this Mr. Flack is."
 •	No one commented on the paradox of Mayor. Elmer Mercier asking council to approve a sum of money for cancer research in the name of Terry Fox, the one-legged cross-Canada runner. Mercier was busy taking a cigarette from its case and lighting it as he made his case. Council approved a $1,000 city donation on Monday.
 •	In case parents haven't noticed, the weather and light in the evening is working against bicycles which have no lights or reflectors. When theatres in town ended their first showing, a coupleof cyclists "nearly bought the farm,” at Victoria and Fourth, reports a reader.