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The air vents are on when the white stripe is showing, but only if the air distribution knob is in certain positions. The air coming out will be cold if the heater is not working.
The heater controls on the 740 are vacuum operated. You should be able to hear hissing noises and the opening and shutting of flaps under the dash as you move the air distribution knob to different positions with the engine running, or right after you have shut it off. The heater control mechanism is somewhat fragile on these cars, but is not too hard to replace, if you can find a good one.
The heater valve is also vacuum operated. It is under the hood, next to the firewall, just to the left (car's left) or drivers side of the engine. It could be as simple as the vacuum hose that activates it having split and/or fallen off.
Is the engine warming up properly? It is not unusual for the thermostat to fail in such a way that it is stuck partially open. When this happens, and it is cold out, the engine never warms up. Result--poor gas mileage and NO HEAT! I've seen it several times, and a new thermostat can make a huge difference.
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