CARDINAL'S SHAKY FOUNDATION.

This article discusses the financial crisis of Cardinal Industries Inc. as of March 20, 1989. Chairman Austin Guirlinger of Cardinal Industries Inc. has long been known as the housing industry's Henry Ford. By applying mass production techniques to construction, his Columbus (Ohio)-based company cranked out motels, apartments, and single-family houses by the thousands. But now the U.S. second-largest homebuilder may face financial problems. On Feb. 13, 1989, Guirlinger found himself hat-in-hand before more than 150 bankers in a Columbus hotel. His plea: forbearance on nearly $8 million in monthly interest payments. He also asked creditors to extend Cardinal a $55 million line of credit while it tries to unload $45 million worth of apartment complexes and other properties. Before the 1968 changes, high-bracket taxpayers invested in rental property to take advantage of deduction. Tax reform tightened the rules, cutting Cardinal's revenues from syndicating the limited partnerships. Guirlinger has shown he is willing to take drastic steps. In the past three months he has closed four plants and cut the number of employees working for the patent company to 1,000, from 3,300. But if he fails to convince this creditors, the Henry Ford of housing could end up more like Preston Tucker.