Word: arcos
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When Atlantic Richfield Co. decided a year ago to eliminate credit cards and cut its gasoline prices by 30 per gal., competitors snickered. After all, 25% of drivers buy gasoline on credit. But when Arco's volume started zooming upward, the competition quickly retaliated. Exxon and Amoco, two of the nation's largest marketers, announced a discount-for-cash policy. And Shell counterattacked by accepting credit cards from Arco holders and converting them into Shell customers...
...battle is still going in Arco's favor. The company increased its market share last year from 3.8% to 4.8%, pushing past Chevron into seventh place among the major refiners. Some of Arco's gains have come at the expense of independent dealers who depend on the majors for their gasoline. An owner of independent gas stations in Massachusetts claims that price competition from Arco and British Petroleum (brand name: BP) has forced him to sell gas below cost. Even at that, he says, his retail price of $1.07 per gal. is still 4? above the price charged...
...Arco's surprisingly low prices are beginning to raise questions. Without mentioning the company by name, Morton Winston, the president of Tosco, an independent refiner that has run into cash problems and expects a $40 million first-quarter loss, decried Arco's practices. Said he: "The majors are selling finished products below the costs of the crude required to make them-never mind the refining costs. That is not competition, that is the use or abuse of economic power...
...that Arco can afford its strategy is by finding ways to make federal laws work in its favor. Much of its oil comes from Alaska's North Slope. In shipping the oil to ports on the West and Gulf coasts, it utilizes an obscure Internal Revenue Service ruling that classifies the part of the voyage outside U.S. coastal waters as foreign economic activity. Thus the shipping cost can be charged off against foreign income, and certain overseas tax credits are allowed...
From the very beginning, the U.S. nuclear-power industry has suffered one setback after another. Electricity was produced from the atom for the first time in December 1951 at Experimental Breeder Reactor 1, a station near Arco, Idaho. Typically even for then, the switch was thrown several months behind schedule. Nonetheless the dream of the day was that nuclear-generated electricity was not far off and that when it arrived, it would be "too cheap to meter...