Md. employees of Westinghouse fear layoffs

October 08, 1991|By Ted Shelsby and Michael K. Burns

Westinghouse Electric Corp. sent a wave of jitters through its five Maryland industrial operations yesterday when it announced that it would eliminate 4,000 jobs to help offset a big loss in corporate profits.

The company, the state's largest manufacturing employer with a work force of 14,000, offered little additional information to help ease the nervousness of its people here other than to say the cuts would be made from its worldwide employment base of 115,000.

"We are currently assessing the situation at the Electronic Systems Group to determine the impact of the corporatewide cost-reduction program" on the Maryland operations, said Jack Martin, a spokesman for the company's local operations.

He said managers of the group had not determined how many workers, if any, would be affected by the layoffs.

Mr. Martin was critical of a WBAL radio report that 1,800 local workers would be getting the ax. The broadcast "simply is not true," he said. "That's a false report."

Richard O'Leary, president of Local 130 of the International Union of Electrical Workers, which represents about 700 electrical workers at Westinghouse's sprawling complex adjacent to Baltimore-Washington International Airport, drew little comfort from the company's statement that cuts would come at plants worldwide.

"I'll feel more comfortable when I know the number is zero, that my people are not involved," Mr. O'Leary said. "At this time, I don't know where my people fit in that 4,000."

He said the majority of the union's members work in "the West building" and are involved in the production of AWACS radar and ground-based radar units for airports.

Interviewed outside the sprawling Linthicum complex, Vicki DiPaola, who has been with Westinghouse for 28 years and works as a manufacturing assembler, said: "It may not hit me, but I feel sorry for those with less time.

"They told us in January there wasn't going to be [more] layoffs, and then it happened. You don't know what to expect." She referred to the company's layoff of about 1,200 workers after the Pentagon canceled work on the Navy's new A-12 attack plane.

Ms. DiPaola said she is not expecting to be laid off. Announcement of the latest cuts came on the same day Westinghouse reported a $1.48 billion third-quarter loss, which was primarily blamed on its Financial Services Group. That unit has been hurt by declining real estate prices.

Westinghouse said the financial results included a $1.68 billion pretax set-aside to cover future losses from the declining value of its real estate holdings.

Paul Jones, a public relations official at Westinghouse's corporate headquarters in Pittsburgh, tried to explain the division's problems in simple terms.

"It's like you buy a house for $150,000 and all of a sudden, because of the recession, you sell the house and you only get $100,000. That's a loss of $50,000."

Mr. Jones said that the reserve set-aside would bring the total for the company's real estate operations to $2.03 billion.

Including the set-aside for corporate lending operations, Financial Services' total set-aside was $2.75 billion.

Paul E. Lego, chairman and chief executive, said the layoffs are part of a broader plan to reduce annual operating costs by $200 million next year.

Other moves taken by the company after a special meeting of its broad of directors Sunday include:

* Appointment of Leo W. Yochum, former chief financial officer of the company, as chairman and chief executive officer of the Financial Services unit. Mr. Yochum also was elected to the board of directors of Westinghouse Electric Corp.

PD * The raising of $900 million through a stock placement with pri

vate investors.

* An acceleration of a plan to rid Westinghouse of troubled real estate holdings.

The only hint of which workers might be getting pink slips in the months ahead came when a Westinghouse spokesman, James Schmidt, said about 400 workers from its corporate headquarters, including government relations people in Washington, would lose their jobs.

Mr. Schmidt said the company announced that action because there was widespread speculation there would be major cuts in the headquarters staff.

Rumors of impending Westinghouse layoffs were making their way around Baltimore-area defense companies that do subcontract work for Westinghouse.

Ronald L. Kaufman, president of the ISPA Co., an industrial coatings concern, said last week that he was picking up word that Westinghousewould be laying off between 2,500 and 4,000 workers.

He feared that all the cuts would be coming from the company's operations near BWI and in Columbia, Annapolis, Hunt Valley and Sykesville.

Westinghouse's third-quarter net loss of $1.48 billion was equal to $4.86 per share on revenues of $3.4 billion. In the same period last year, it posted net income of $255 million, or 87 cents per share, on revenues of $3.2 billion.

For the first nine months of the year the net loss was $1.26 billion, equal to $4.11 a share. This compares with a profit of $717 million, or $2.44 per share, in the same period last year. Revenues totaled $9,4 billion, vs. $9.2 billion for the nine months of last year.

Westinghouse's stock closed at $19.125, down $2.625 from Friday's close, in trading on the New York Stock Exchange.

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