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Aviation History
1992
1992 - 0303.PDF
BUSINESS Lockheed defence-related business faces reduction BY GUY NORRIS IN LOS ANGELES Lockheed could reduce its de pendence on defence-related business by up to 15% over the next five years, according to vice-chairman and chief finan cial and administrative officer, Vincent Marafino. The company has released 1991 annual results, showing that defence accounted for 70% of the business. Marafino says that Lockheed has the potential to achieve a 60-65% defence, 35% civil balance over the next three to five years. Lockheed's almost $10 billion sales breakdown shows the share of the company's non-defence business growing from 25-26% to 30% — made up by growth in NASA/civil space work (14%), commercial sector work (10%) and international work (6%). The bulk of the defence sector's 70% is taken up with tactical programmes (33%) such as the F-22, F-117A and C-130; strate gic programmes (19%), in- Agusta talks to unions State controlled Italian aerospace company Agusta has begun talks with the unions on a redundancy and plant-closures pro gramme to be undertaken by the end of 1994. The company, hit badly by the international recession, is to focus its efforts on its core r.otary-wing business — sell ing most of its diversified activities and reducing its role in the fixed-wing sector. Two companies, Agusta- OMI and Agusta Sistemi, have already been transferred to a new subsidiary of state hold ing agency EFIM, also to be called Agusta Sistemi. Agusta plans to close some plants in an attempt to re group around a small number of major manufacturing sites. Workforce numbers over the next three years will be cut by about 2,000 — a reduction of about 20%. D Marafino: boosting civil business eluding the Trident II Fleet ballistic missile; and the balance (18%) held by a host of classi fied programmes. "We're looking for growth to come from the non-defence businesses and we expect to hold our own, or maybe even grow by single digits in de fence," says Marafino. "The award of the ATF was a big boost for us." On the guidelines for Lockheed's non-defence ex pansion, he says: "Our culture is based on the need to meet the high requirements of defence or space, where you don't get a second shot. We will try to move into areas where there is already a good skill or skill-related busi ness existing within the com pany... we're not likely to be going into commodities." International programmes, particularly airport management contracts led by Lockheed Air Terminal, and overseas mainte nance work developed by Lock heed Aircraft Service will be a focus for future efforts. Marafino's confidence in Lockheed's traditional market place, based on a surprisingly good 1991, remains high. Higher tax rates were blamed by Lockheed for lower profits of $308 million for 1991 compared with 1990's $335 million. Turn over also dipped slightly, from $9.9 billion to $9.8 billion. Lockheed programme profits increased by 3% to $576 million, before tax. • Extension to Piper funding approved The Piper Aircraft bankruptcy court and creditors commit tee has approved a six-month extension of Piper's interim funding. The money will allow the company to build 65 aircraft and to continue to produce spare parts. The extension will also "...give the court a little additional time to review the proposals" for an asset purchase, according to Piper vice-chairman Ray Johnson. The government of Saskatchewan has submitted a business proposal to acquire Piper's assets and to locate the company in the Canadian prov ince (Flight International, 29 Jan- uary-4 February). Johnson says, however, that he "...expects one, possibly a second, proposal to be forth coming shortly" from other Ca nadian provinces. Although Johnson will not name the interested parties, the Manitoba government says: "We are working with private sector equity partners to develop a proposal." Those partners in clude the Southport Aerospace Center, as well as other inves tors. Doug Thomson, president of Southport, says: "I have no doubt that we have a better package [than Saskatchewan's]." "We have a larger amount of equity investors and we have a site available." The Ontario government is also looking at Piper. Having begun its due diligence process last November, when financier Cyrus Eaton submitted a busi ness proposal to the province, it is now awaiting clarification of certain items, to determine whether the business is viable. As well as British Columbian investors, the Government of Sweden is also showing interest in Piper and may make a pro posal soon. • PLANE SMART. At Stevens Aviation we're partners in success with our customers, vendors, joint venture associates and employees. Our capabilities include aircraft sales, heavy maintenance, engine and propeller overhauls, extensive avionics depth, modifications, compo nents, interiors, paint, line service, fleet manage ment and parts distribution. And we're one of the largest, oldest firms of our type in America. Now we're looking for new strategic alliances. These would be risk-sharing ventures in value- added technical services such as: fleet upgrades, new STCs, mod projects and parts operations. If this sounds like the kind of aviation company you want as a partner, please make immediate contact witb Steve Townes, Executive Vice President. STEVENS AVIATION 803-879-6000 Fax: 803-879-6277 Greenville, SC • Nashville, TN Dayton, OH • Cincinnati, OH • Knoxville, TN FLIGHT INTERNATIONAL 12 - 18 February, 1992 17
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