Martin Marietta to close plant in Glen Burnie, cutting 481 jobs Firm to trim 11,000 nationwide in '93

October 01, 1993|By Ted Shelsby and Kim Clark | Ted Shelsby and Kim Clark,Staff Writers

BETHESDA -- Martin Marietta Corp. said yesterday that its Glen Burnie plant with 481 workers would be closed, as the local division becomes one of the casualties of peace in a corporatewide consolidation.

The closing of the submarine warfare plant here was part of the company's decision to cut 11,000 employees nationwide this year as a result of Pentagon budget cuts and its acquisition of General Electric Corp.'s aerospace division last year, said Norman R. Augustine, Martin Marietta's chairman and chief executive.

The cuts will be "very painful," Mr. Augustine said, for the employees whom he described as "superb people and dedicated people." Martin Marietta, which has 94,000 employees, has eliminated 46,000 jobs since 1987.

Mr. Augustine predicted that another round of layoffs is very likely next year. He said it was a "matter of economics" in deciding to close the Glen Burnie plant by next spring.

The closing of the Glen Burnie plant is the latest in a series of economic blows to the area economy as a result of Pentagon budget cuts. The Westinghouse Electronic Systems Group complex in Linthicum has eliminated 7,000 jobs through layoffs and attrition since 1991.

Martin Marietta's Glen Burnie plant itself has shrunk from about 1,300 workers five years ago when the company bought it from Gould Inc.

Michael Lofton, economic development director for Anne Arundel County, said the state's Department of Economic and Employment Development would help assist the workers, "but I don't want to underestimate the situation. It will be quite a challenge to find new jobs for these people."

Workers were also pessimistic, saying they doubted that many of them would be transferred or find comparable jobs.

Ruth Porter, an engineering materials handler, said that many of the workers were devastated at the morning meeting in which the closure was announced.

'Good place to work'

"This was a good place to work," with good pay and benefits, she said, noting that starting pay was more than $7 an hour.

Barbara Grogan, who was helping her husband, Gary, pick up his tools on his last day of work yesterday afternoon, was angry.

4 "Martin managed to ruin this company," she said.

William F. Ballhaus Jr., president of the company's Aero and Naval Systems at Middle River, made the local announcement of the consolidation moves. The Glen Burnie facility is part of the Aero and Naval Systems operation.

Martin Marietta said the consolidation, which will affect operations in eight states over the next six months, is expected to reduce the company's total operating cost by as much as $1.5 billion over the next five years.

Plants from Burlington, Mass. to Daytona, Fla., would be affected, with job cuts occurring "across the board," including corporate executives, Mr. Augustine said.

He said about 40 percent of the 780 headquarters staff would be cut. "You only need one CEO, one president and one CFO," he said, "and you can go on down the line."

Martin's stock closed up 37.5 cents, at $89 a share, yesterday.

The move comes as the defense procurement budget has been cut 64 percent since 1987, leading the company to pare expenses in the wake of its $3 billion acquisition of the GE division.

The company said 2,000 jobs were being eliminated to streamline operations made redundant by the GE purchase.

George Padrasky, defense industry analyst for Chicago-based Duff & Phelps, said the move may help improve Martin's bond rating with his company.

A doubling of debt

"My sympathies go out to the 11,000 employees. . . . But this is good for Martin," he said.

Although he thought the acquisition of GE was a good idea, Mr. Padrasky noted it more than doubled the company's debt -- which tallied $1.9 billion at June 30, up from $479 million prior to the acquisition.

And that burden meant the company would have to cut costs and eliminate redundancies in order to free up enough cash to meet the debt payments, he said.

The company posted an operating profit of $200 million on sales of $3 billion for the six months that ended June 30.

The Glen Burnie plant is being closed in favor of a former GE plant in Syracuse, N.Y., which will take over production of "towed arrays," long made in Glen Burnie. Towed arrays are tubes filled with electronic listening devices that are lowered beneath the surface to detect and track submarines. They are towed by surface ships or submarines.

Work to be consolidated

Al Kamhi, a company spokesman, said the company chose to move all its sonar work to Syracuse, because the GE plant already made shipboard electronics "and it is easier to have it all in one location.

Of the 481 workers at the Glen Burnie plant, only 300 workers are expected to be employed there at the time of the closing because of a reduction in work over the next six months. The company expects to transfer 270 positions to Syracuse, but the company declined to say how many workers would be asked to move.

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