Alliedsignal Plant At Crossroads

November 25, 1994|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

Like a scene from a John Wayne western in which the cavalry gallops in with bugles blaring, the federal government is coming to the rescue of a troubled Towson defense contractor.

The help is in the form of a $7.1 million Labor Department employee training grant. It is designed to save nearly 2,100 jobs within AlliedSignal Inc.'s Aerospace division, including more than third of those at the s communications plant on Joppa Road in Towson.

The plant has fared much better than most defense contractors in recent years. Its sales have remained steady in the $180 million to $200 million range, and it has as many workers today as in 1988, a peak year for Pentagon spending.

But its good times are slated to end.

When Labor Secretary Robert B. Reich announced the grant last month, he said that it would save 459 jobs at Allied's Towson plant. The plant has 1,200 workers.

It's estimated that $1.5 million of the federal funding will make its way to Towson.

Allied Aerospace was selected for assistance because it already is taking steps to improve its fortunes. The division is undergoing a major restructuring to lessen its dependence on military contracts by expanding into commercial markets.

The Towson plant dates to the early days of World War II. It was rushed into operation in 1941 to produce radio communication equipment for the U.S. and British air forces. After the war, it turned to the production of television sets under the Bendix name.

In recent years, however, it has shifted back to military contracts.

Today, the federal government, primarily the Department of Defense, accounts for about 95 percent of the plant's sales, according to Alan Dietrich, the 37-year-old engineer who took over as vice president and general manager of the Towson complex this year.

Its businesses fall into four major categories:

* Command, Control, Communications and Intelligence. This includes the production of computer terminals used by military commanders to draw data from spy satellites and the upgrade of an identification system used on military planes. It accounts for about $60 million in annual sales, or a third of the division's total.

* Target detection. This is the production of fuses used in the Patriot anti-missile that explodes a warhead as the anti-missile nears its target. It represents about 30 percent of the division's annual sales, or an estimated $54 million.

* Information Security Products. The plant makes electronic equipment, used by the federal government, primarily the National Security Agency, to secure sensitive telephone, computer, satellite and fax communications by encrypting the data. This is a $36 million business, accounting for about 20 percent of the plant's sales.

* Air Traffic Control. The plant produces an airport radar system for the Federal Aviation Administration that can speed up the process of landing planes on parallel runways at busy airports by getting a quicker reading on each plane's location. It represents about $30 million a year.

They all are good businesses, but they leave the company too dependent on federal contracts, said Mr. Dietrich, a 6-foot-6, 230 pounder. Mr. Dietrich has been with Allied since graduating from Columbia University in 1978 with a degree in electrical engineering. He is viewed as a rising star. Last year, he captured the attention of the top management when he headed a group that landed a major contract for an auto pilot system used on military cargo planes. The contract is expected to generate more than $1 billion in new business.

Mr. Dietrich, who came from the company's Teterboro, N.J., plant, would like to do something similar for Towson.

His hope is to market the technology the company developed to protect the government's electronic information system.

"This could be a huge market for Towson in the future," Mr. Dietrich said of the electronic equipment, which could be used by companies to keep competitors from eaves dropping on their video conferences and tapping into their phone calls, fax machines and computer systems. It could also safeguard the electronic transfer of funds.

"This market is still in its infancy," Mr. Dietrich said. "We see this as an area of tremendous growth potential."

He said that "almost any company transmitting competitive sensitive data, financially sensitive data and employee sensitive data" is a potential customer.

As part of a restructuring announced earlier this year, Towson was combined with Allied's anti-submarine warfare division in Sylmar, Calif., and the aircraft electronics operation in Teterboro to form the Government Electronic Systems division.

The division is a $1.2 billion a year business that is part of Allied Aerospace, which is one of the three operating arms of Morris Township, N.J.-based AlliedSignal.

Allied's Aerospace operations grossed $4.5 billion last year, accounting for 38 percent of the parent's total sales of $11.8 billion.

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