Martin's internal strife helped sink Glen Burnie site Defense spending cuts were only part of story of plant's demise, insiders say

October 31, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer

In the month since Martin Marietta Corp. announced plans to close its Glen Burnie factory, the company line has held steady: Shrinking defense spending for anti-submarine warfare seriously undercut the factory.

But current and former workers -- including key managers -- tell a different story. They say that internal squabbling, misguided bidding strategies and other problems damaged the operation, which Martin acquired from Gould Inc. five years ago. They describe an "us vs. them mentality" that crippled cooperation between Martin executives and "Gould people."

Such conflict, they say, left the factory ill-prepared to fend off competitors that were becoming more aggressive as the defense budget shrank. And as that happened, hundreds of Glen Burnie workers lost their jobs.

In 1988, the northern Anne Arundel County complex was a thriving $110-million-a-year business with 1,300 workers who prided themselves on a near-monopoly in submarine-detection equipment, which accounted for about 80 percent of sales. Today, the factory has estimated annual sales of about $60 million and fewer than 500 workers; about 200 workers are likely to lose their jobs before production is shifted early next year to a Martin plant in Syracuse, N.Y.

No one dismisses the impact of defense budget cuts. The world has changed drastically since Martin -- as locals still call the former Glenn L. Martin Co. -- bought the Gould complex in 1988. The Berlin Wall has crumbled. The Soviet Union has disintegrated. And U.S. spending on military hardware has dropped about 65 percent.

Meanwhile, anti-submarine warfare, the Navy's top priority in the late 1980s, has slipped on the list.

Martin's chairman, Norman R. Augustine, used that background to explain the decline in business and jobs at Glen Burnie, as he announced the plant-closing and other restructuring moves for the $10 billion company.

"The Department of Defense no longer perceives a significant submarine threat, and as a result has greatly cut back on their undersea warfare spending," said Mr. Augustine, who once had termed the $117 million Gould acquisition better than anyone ever had expected. "And the sole line of business Glen Burnie was in was undersea warfare."

But that is just one chapter in the story of the Glen Burnie factory's demise, say former employees, some of whom asked not to be identified because they feared that their standing within the industry would be hurt.

Corporate mergers are never easy, and Martin's acquisition of the Gould complex was no exception. Almost from the beginning, the "Gould people" resented intervention by Martin managers at Middle River, a Baltimore County complex that handles other defense work and is the next step up on the corporate chain of command.

The former Gould managers felt they knew a lot more about making towed arrays, the long tube-like devices containing electronic listening equipment. Arrays are reeled into the water from submarines or surface ships to track the movements of deep-water subs -- the same technology featured in "The Hunt for Red October," a movie based on a Tom Clancy novel about the Navy's hunt for a Soviet sub equipped with a quiet propulsion system.

And the former Gould managers could point to past successes. After all, Gould had grown the business from a $30 million-a-year operation in 1983 to one that grossed $110 million and controlled 70 percent of the Navy's towed-array market by the time Martin came along.

So it's not surprising that they chafed at some of the orders from Martin managers.

"I can't remember how many times I was reminded, 'We bought you; you didn't buy us,' " said Charles Kennedy, a program manager at Glen Burnie who was honored by Martin's corporate headquarters as the outstanding performer of the year at the Anne Arundel County plant in 1991, not long before he left the company to take a job at the Johns Hopkins Applied Physics Laboratory. "That was a nice way to build teamwork," he added, sarcastically.

That attitude boiled over into some ugly encounters. Recalling one pressure-packed meeting between Mr. Kennedy and the managers at Middle River, an engineer said: "It was embarrassing. They were yelling at Chuck -- one of the most respected guys in this industry -- like high school kids."

The tensions increased after serious problems arose with the Glen Burnie factory's contract to produce a new TB-23 array for the Navy. The Navy canceled the contract in January 1992 after the design failed to meet specifications.

The contract had been awarded not long after Martin acquired the Glen Burnie complex from Gould, and Martin has since filed a suit in U.S. District Court in Baltimore, accusing Gould of violating the acquisition contract. The suit, which seeks $180 million, alleges that Gould knew, and failed to tell Martin, that its design could not meet Navy specifications.

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