The directors of Ellicott Machine Corp. have agreed to sell part of the assets of the company's 107-year-old dredging division to IHC Holland, the world's largest dredge equipment maker, the company said yesterday.
The Dutch company, part of the giant IHC Caland N.V. conglomerate, was competing against a management team, headed by Peter A. Bowe, president of the dredging division, which had the financial backing of both the state and Baltimore governments.
The sale price was not disclosed.
The acquisition raised the possibility of severe cuts in the 125-person work force at the division. Mr. Bowe said officials of IHC have said "a number of staff will be reduced if the market does not improve."
Richard E. Bowe, chairman of the company, said last week that if IHC purchased the division, it intended to reduce the Baltimore operation to an engineering and sales office, which would cut the work force to between 15 and 20 people. Richard Bowe is the father of Peter Bowe.
The agreement to sell the division was made Friday, the company said. Representatives of IHC in Schiedam, Netherlands, could not be reached yesterday for comment.
Ellicott is the oldest and largest U.S. dredge maker and has built equipment for the Suez and Panama canals. But recent years have been tough on the company. "It has been quite difficult," Richard Bowe said. "But we are at about break-even."
The division was sold because much of the stock of the privately owned company is held by family trusts following the death three years ago of Donald Sherwood, the company's largest stockholder. The trusts want to diversify their holdings and sell the Ellicott stock, Peter Bowe said.
In addition to certain assets of the dredging division, the sale also included the division's name. Ellicott Machine continues to own Ellicott Engineering, Mud Cat and McConway & Torley Corp.
The company also has a tentative agreement to sell the McConway & Torley Corp. subsidiary to a management group at that operation. That company has two foundries in Pittsburgh and Kutztown, Pa., which make railroad couplings and castings. The two plants have a total of 400 employees.
Ellicott bought the Mud Cat operation from National Car Rental Systems in 1987. Ellicott Engineering was formed in 1985 to make types of machinery other than dredge equipment.
Company officials were not available to comment on how many people would work for the remaining divisions.