Aerospace executive new chief of AAI Corp. Firm struggling amid defense cuts

October 16, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer

United Industrial Corp. has picked Richard E. Erkeneff, a senior executive of McDonnell Douglas Corp., to head its struggling AAI Corp. subsidiary in Cockeysville.

Mr. Erkeneff succeeds Thomas V. Murphy, who resigned under fire as president and chief executive in April following a sharp drop in AAI's earnings. The falloff was caused partly by a $23 million corporate restructuring and the disappointing performance of a commercial flight simulation company AAI acquired two years ago to lessen its dependence on a declining Pentagon budget.

AAI, primarily a defense contractor, accounts for about 80 percent of its New York-based parent's annual sales and earnings.

In a notice to employees yesterday, AAI said Mr. Erkeneff most recently served as senior vice president of McDonnell Douglas' Aerospace Group, a $400 million operation based in Huntington Beach, Calif.

Prior to that Mr. Erkeneff was president of McDonnell Douglas Electronic Systems Co., also on the West Coast. He is scheduled to begin his new job at AAI in mid-November.

McDonnell Douglas, perhaps best known for its production of F-15 fighter planes and commercial jetliners, is the nation's largest defense contractor, posting sales of $17.4 billion last year.

Mr. Erkeneff has been with McDonnell Douglas since graduating from the University of Minnesota with a degree in electrical engineering in 1958.

The company's aerospace division is involved in the design and production of electronic equipment for military and commercial aircraft, missiles and the company's Delta rocket, used to launch satellites.

AAI benefited greatly from the defense buildup during the Reagan administration. It was one of the state's fastest-growing companies during the closing years of the Cold War. Employment at the York Road complex grew to a high of about 3,500 in late 1987, from about 1,500 in 1979.

But, like other defense contractors, it has had its share of difficulties in recent years, and employment has dropped below the 1979 level.

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