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A DIARY OF THE WEEK

GE FLEES WALL STREET: Owning a brokerage house can be a painful experience for a company from another industry. Eventually, even the biggest and smartest outsiders have a way of fleeing the business, often after finding there were ways to lose money they had never even considered.

Last week General Electric Co. dumped the parts of Kidder, Peabody that it could sell and indicated it will phase out the rest. PaineWebber was the buyer, paying $670-million in stock. GE will take a loss of about $500-million on the sale.

GE's financial-services operation is one of the best and most profitable around, and acquiring a broker seemed like a natural extension back in 1986. But Kidder never earned its keep, and GE was humiliated when it fired Kidder's star bond trader, contending that he had faked $350-million in profits.

GE's stumble is hardly unique. American Express' attempt to create a financial supermarket came to naught, and it eventually cut its Shearson Lehman Bros. operation in two, selling one and spinning the other off to shareholders.

And Prudential Securities, the old Bache brokerage firm, was a disappointment to Prudential Insurance, its parent, even before it became enmeshed in a scandal relating to dubious partnerships.

The exceptions to the litany of failure would appear to be Sears, which has done well following a conservative strategy with Dean Witter, and those insurance companies _ Travelers (Smith Barney) and Equitable (Donaldson, Lufkin & Jenrette) _ that are run by Wall Streeters.

PENA VS. GM: Transportation Secretary Federico Pena took a highly unusual step Monday: In effect, he accused General Motors of making pickup trucks so defective that 150 people might have died needlessly in fiery crashes.

The vehicles are full-sized Chevrolet and GMC pickups produced by the nation's No. 1 carmaker from 1973 to 1987. The trucks have fuel tanks mounted outside their body frames. Safety advocates have argued that the tanks leak when struck sideways, spilling gasoline and igniting deadly fires.

Pena agreed and announced the first step toward a mandatory recall of the pickups. He added that GM documents suggested that the company probably knew about the hazard but chose "sales over safety."

GM officials, who had rejected a voluntary recall request in April, denounced that contention, and it turns out they may have some support in Washington.

Federal safety investigators had recommended last year that the GM pickup case be closed because, in their opinion, the increased risks posed by the trucks were not unreasonable.

The carmaker put Pena on notice that it will go to court to fight a recall. And the secretary may soon be in the unusual position of explaining why he chose to ignore the advice of his agency's safety investigators and follow his own course of action.

HIGH COST OF BROADWAY: After 33 years of seeing his plays come to Broadway, Neil Simon announced last week that the show was over for the Great White Way, and the villain _ the black-mustachioed economics of Broadway theaters _ had won. His next play, London Suite, which is now premiering in Seattle, will open in New York at an off-Broadway theater.

The numbers are simple, Simon said: It costs at least $1.5-million to bring one of his plays, which often have one set and a relatively small cast, to Broadway _ three times the cost for an off-Broadway house.

The announcement shook producers because it meant that even America's richest and most popular playwright thinks that Broadway is no longer hospitable to his plays. Simon's last few outings on Broadway have not done well.

Simon now has a booking problem. Several Broadway theaters of roughly 1,000 seats are available. But there are few off-Broadway houses with the 500 seats he wants, and most are spoken for.

By Friday, his producer was fielding calls with some desperate offers from the owners of empty buildings.

_ The New York Times

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