Lockheed Martin Corp. is spinning off 10 businesses that will be combined into a communications company, helping the defense giant concentrate on its main business.
The operations to spin off, which include the Wideband Systems plant in Salt Lake City, had revenues of $650 million last year, or 2.4 percent of Lockheed's overall $27 billion in sales.Layoffs for their 4,900 employees are not planned.
The new business - L-3 Communications - will be jointly owned by Lockheed, Lehman Brothers and a management team led by two Lockheed executives.
The spinoff, announced Monday, is part of a defense industry trend toward jettisoning non-core business lines, said Jon Kutler, president of Quarterdeck Investment Partners, a Los Angeles investment banking firm that spe-cial-izes in the aerospace and defense industries.
Sen. Orrin Hatch, R-Utah, said Salt Lake's Wideband Systems "will be the dominant profit center in the new company."
"There will be no job losses," assured Hatch. "The company will continue to specialize in the high-tech areas, and L-3 will continue to specialize in the high-tech areas and L-3 will pursue strategic business objectives in defense and commercial sectors."
Wideband was acquired in 1995 by Loral Corp. from Unisys. Loral later mergeed with Lockheed Martin, based in Bethesda, Md.
Kutler said the units being spun off "are a collection of businesses that were picked up throughout the years," he said. "Some from Loral, some from Martin, some from Lockheed. It's part of some general housecleaning."
In November, Lockheed Martin said it would eliminate 1,600 jobs in a cost-cutting effort following its acquisition of most of Loral Corp. Lockheed Martin said it would close eight plants, some from Loral and some from Lockheed, as it consolidates the two businesses.
Lockheed will own 35 percent of L-3's stock, with Lehman holding about 50 percent and the management team 15 percent.
The parties still need to work out a final purchase agreement for the deal, which must be approved by federal regulators. It is expected to be completed by the end of the year.
The deal also includes eight smaller divisions in the Lockheed Martin Products Group: Display Systems in Atlanta; Advanced Recorders in Sarasota, Fla.; Conic in San Diego; Telemetry & Instrumentation in San Diego; Microcom in Warminster, Pa.; Randtron in Menlo Park, Calif.; Narda-Microwave in Hauppauge, N.Y., and Rancho Cordova, Calif.; and Hycor in Woburn, Mass.