NORTHROP GRUMMAN Corp.'s purchase of Westinghouse's Electronic Systems Group appears to be good news for the division's 8,500 Maryland employees. Since the group's airborne electronics and radar business complements, rather than competes with, Northrop Grumman's manufacture of attack aircraft, there seems less likelihood of widespread job losses.
Northrop Grumman's chairman, Kent Kresa, said after the announcement that he did not foresee "major layoffs." However, because his company is purchasing the Electronic Systems Group primarily with borrowed money and adding substantially to its debt, the possibility exists that there would be some future asset sales that could result in a smaller work force.
State and local officials for the past month have fretted over the fate of Westinghouse's defense electronics operation, the state's fourth largest private employer. With several large facilities in Anne Arundel County, including its headquarters; smaller sites in Baltimore County's Hunt Valley and Carroll County's Sykesville, and employees who live throughout the metropolitan region, a merger that resulted in large numbers of layoffs would have a devastating impact on the local economy.
For Northrop Grumman, the Electronic Systems Group acquisition is a good fit. Best known for developing the bat-wing B-2 stealth bomber, the Los Angeles aircraft manufacturer also makes the E-8 Joint Stars battlefield communication plane, the carrier-based E-2C Hawkeye and components for other military and civilian planes. Northrop Grumman can now expand its product line into radar, electronic countermeasures, airborne battlefield communications, anti-submarine warfare and air traffic control systems.
Northrop's willingness to pay about $3.6 billion -- a premium price -- for Westinghouse's Maryland-based division is a concrete indication that it expects to reap substantial returns from this enterprise.
This commitment to the defense electronics business should bolster the spirits at the Westinghouse division. After years of indifference from the parent company's top management, these loyal employees can look forward to working for a company dedicated to grabbing a larger share of a shrinking defense pie.