Northrop completes Linthicum purchase Westinghouse division, with 8,000 workers, sells for $3.6 billion

March 02, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Northrop Grumman Corp. said yesterday that it completed its $3.6 billion deal to buy Westinghouse Electric Corp.'s Linthicum-based defense and electronics systems business.

The deal was announced Jan. 3, and marks each company's different approach to coping with the defense cuts that have followed the end of the Cold War.

Northrop Grumman is moving to diversify within the defense business, betting that it can improve its position by getting into -- areas less vulnerable to specific cuts, while Westinghouse is concentrating on its more profitable broadcasting businesses.

The new Northrop Grumman unit is Maryland's biggest manufacturing employer. Layoffs caused by defense cuts had reduced the work force from a peak of 17,000 workers in 1988 to about 8,000 today.

Northrop Grumman said it will operate the business as a separate unit, which it will call the Electronic Sensors and Systems Division.

The unit had $2.6 billion in sales in 1995, mostly from making radars and electronics for aircraft and battlefield management systems. The division also makes air traffic control systems.

Kent Kresa, Northrop Grumman's chairman, president and chief executive, said last month, "We do not see any major layoffs due to this acquisition."

Northrop Grumman's biggest business by far has been the construction of the B-2 Stealth bomber, a political football caught between the Air Force's repeated statements that it doesn't want more B-2s and the desire of Southern California politicians to build more planes.

Westinghouse is moving out of the military business almost completely.

It plans to use the $3 billion in cash it received from Northrop Grumman to help pay for its $5.4 billion deal to buy CBS Inc.

It already owns a group of television stations including Baltimore's WJZ-TV (Channel 13).

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