Any misgivings about Westinghouse Corp.'s diversification moves were put to rest by Defense Secretary Dick Cheney's decision to ax the A-12, the Navy's medium-range carrier-based stealth bomber. Westinghouse, a major subcontractor on the $52 billion project, expects to idle as many as 1,200 Maryland workers once it gets final word from prime contractor General Dynamics. In the interim, the company is scrambling to reassign some of these workers to other jobs.
Disastrous as it was, the cancellation didn't catch the big contractor flat-footed. Since the mid-1980s, Westinghouse has laid the groundwork for a diversification strategy that not only mutes the pain of the A-12 termination but leaves the company well positioned in an era of shrinking defense budgets. In recent years, the company has built a strong customer base outside the Pentagon for its technical wizardry.
The radar and associated technologies it employs to detect enemy aircraft are also used to land commercial planes, intercept drug smugglers and even sort mail. It has embarked on some of these ventures on its own, others in strategic alliances with old rivals. Last year, 29 percent of Westinghouse's Electronic Systems Group's sales came from commercial projects, up from 16 percent in 1986. The company is shooting for a 50-50 split by the mid 1990s.