Grumman plans to sell parts factory in Glen Arm

January 19, 1994|By Ian Johnson | Ian Johnson,New York Bureau

NEW YORK -- Grumman Corp. said yesterday that it will sell its parts factory in Glen Arm and go ahead with plans to close its Salisbury aircraft cable plant, which employs nearly 250 workers, by the end of the year.

The announcement came as the defense contractor announced a separate $85 million plan to lay off 500 workers and close several of its aircraft test and design facilities on Long Island.

Grumman had announced that it would close the Salisbury plant last May but held out a slim prospect in November that it might reconsider the decision after it had reviewed the productivity of all its factories. Robert Harwood, a company spokesman, said the review had not persuaded Grumman to change its mind.

"It was part of our review, but we never said we wouldn't close the plant," Mr. Harwood said. "We just can't keep open all the facilities that we had 10 years ago."

Grumman intends to sell the machining plant in Glen Arm, which employs about 100 workers, to another company. Mr. Harwood said Grumman has had talks with several prospective buyers but has no firm offers.

The company said it wants to sell the factory by the end of the year. Mr. Harwood said it was premature to discuss what would happen if no deal is made.

Grumman, based in Bethpage, N.Y., is best-known for designing and building Navy fighter planes, like the F-14 Tomcat and World War II-era F-6F Hellcat.

The sale of the Glen Arm factory in Baltimore County and the closure of the plant in Salisbury are part of a decision to stop designing and building fighters, said George Podrasky, an analyst at Duff & Phelps. "They are trying to concentrate on the electronic components of aircraft but not build the planes themselves."

All told, the cutbacks will save the company $600 million over the next two years. Besides closing five Long Island facilities and cutting office and production space by one-third, Grumman will transfer some operations to Florida.

The cutbacks will cost Grumman $85 million, which will be taken from the company's 1993 earnings, due out next week.

The company, which employs 17,900 people, lost $123 million in 1992. Sales dropped 11 percent, to $3.5 billion.

Wolfgang Demisch, an analyst at BT Securities Inc., said Grumman might have acted earlier, when the decline in defense spending first became apparent. But he said the company's long tradition in the field made it a difficult step.

The stock market has generally lauded Grumman's cuts. Its stock has risen 20 percent over the past three months. Yesterday it closed up 75 cents, to $42.625.

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