Buyer sought for division at Middle River Lockheed Martin seeks to unload reverser operation

Weak sales prompt move

Sale could prompt complete shutdown of factory complex

October 17, 1995|By TED SHELSBY | TED SHELSBY,SUN STAFF

Lockheed Martin Corp. is seeking to sell the aircraft thrust reverser operations that account for about 60 percent of the business and jobs at its Aero and Naval Systems division in Middle River.

A sale is only one option currently being considered, according to a company spokesman. But selling the division could mark the end of the company's long involvement and storied history at Middle River, which dates back to 1929.

According to one industry source, Lockheed Martin would likely move the production of the shipboard rocket launchers it builds for the Navy to another plant in Moorestown, N.J., if it is successful in finding a buyer for its thrust reverser operation.

Production of the rocket launchers, called vertical launching systems, makes up the other 40 percent of the business at the 66-year-old Baltimore County factory, which once served as the heart of the nation's aerospace industry.

"Selling the thrust reverser business is an option," said Donald Carson, a spokesman for the Middle River complex. "But it's not the only option. To say it is for sale is only partially true."

Thrust reversers are at the rear of an engine and serve as brakes for jetliners as they land.

Mr. Carson added: "The table is open for all extremes -- from

buying to selling, with everything in between." Those options include possible mergers and the formation of a joint venture with another company.

But a sale seems more likely. Lockheed Martin President Norman R. Augustine has often said that the company expects to be No. 1 or No. 2 in any of its businesses. And the thrust reverser unit is neither.

"We are obviously not [in the top two] in this business," Mr. Carson said. "We are three, four or five, depending upon how you count it."

Rohr Inc., in Chula Vista, Calif., and Seattle-based Boeing Co. each command about one-third of the thrust reverser business. A half-dozen dozen other companies in the United States and Europe compete for the remaining business.

Depressed sales in the aircraft industry have hindered production at Middle River. Reduced orders for new planes cut Middle River's business by about 20 percent, or about $50 million, last year and resulted in an operating loss and the layoff of about 200 workers, Mr. Carson said.

"These are sad times at the plant," said Kenneth Miles, bargaining chairman for Local 738 of the United Auto Workers, which represents about 300 of the approximately 1,000 Middle River workers. "There is a lot of anxiety on the factory floor. People are scared. They don't know what is going to happen."

Mr. Miles said there have been rumors about the possible sale of the thrust reverser business. He said they were fueled when potential buyers examined the operations.

The Middle River plant was spared closure in June, when Lockheed Martin announced that it would eliminate 12,000 jobs and close 38 plants and other facilities around the world. But it was warned that its future was still uncertain.

Mr. Augustine said at the time that the company had more capacity than needed and warned that some marginal businesses might be sold.

Before the merger with Lockheed, Martin Marietta was seeking to transform the Middle River plant into the world's leading producer of thrust reversers.

The plant felt it had taken a step toward achieving that goal in December 1992, when it disclosed that it had been selected by Pratt & Whitney to build more than $1 billion worth of thrust reversers. But the deal was never finalized.

In December 1993, Mr. Augustine came to Middle River to announce that it had been selected as the sole-source supplier of thrust reversers for a line of General Electric Corp. aircraft engines. The contract, he said, had the potential to develop $3 billion in new business over the next 20 years.

That prediction, however, was based on the aircraft production industry remaining healthy.

The state also played a role in securing the GE contract. Responding to threats of Middle River closing, the state promised a $900,000 financial package to retrain workers and relocate equipment and some key personnel from GE's plant in Cincinnati.

The state also agreed to lease a five-story building that Martin Marietta had constructed at Middle River.

Charles Porcari, a spokesman for the Maryland Department of Business and Economic Development, said yesterday that Lockheed Martin has kept the state agency informed of its plans for Middle River, including the possible sale of the thrust reverser business.

Under terms of the grant, the money the state provided would be returned if the company moves its work out of Maryland, Mr. Porcari said.

Middle River served as the corporate headquarters and main factory for the former Glenn L. Martin Co. for more than three decades. Workers at the plant built the famed China Clipper in the 1930s, the B-16 Marauder bombers in the 1940s and the Titan II rockets that carried the Gemini astronauts into space in the 1960s.

During World War II, Martin had 52,000 workers. But there has been a steady decline in recent years. Its work force is expected to be 900 by the end of the year.

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