International Unit Formed by Allied-Signal

On the heels of its corporate-wide restructuring earlier this week, Allied-Signal said Friday that it has formed a new division to develop new foreign markets and coordinate overseas marketing and manufacturing.

The creation of the new operation, to be called Allied-Signal International, was disclosed during a reorganization briefing session Friday with the 160 employees working at Signal’s former headquarters in La Jolla. A formal announcement is scheduled for Monday.

Beginning in January, Signal’s headquarters functions will be transferred to Allied-Signal’s main office in Morristown, N.J., a process that will take about six months, the employees were told. The predominantly white-collar headquarters staff will have the option of transferring to Allied-Signal in New Jersey, relocating to other company subsidiaries, accepting “a generous severance” or taking early retirement, according to a company spokesman.

In the restructuring, 28 Allied-Signal units are being spun off by the parent company. (It was previously reported by the company that 30 units would be spun off; however, two of the units actually were sub-units of two divisions included in the original spinoff count.) The spinoff will leave Allied-Signal’s operations concentrated in four major areas: automotive, aerospace, chemicals and electronics.

Allied-Signal International, which will be based in Signal’s old headquarters building, will “supplement the marketing and sales activity” of those operations, according to Daniel Derbes, president of the newly formed subsidiary.

The presentation was made by Allied-Signal Vice Chairman Forrest Shumway and Michael Dingman, former president of Signal and, until this week, president of Allied-Signal.

Dingman will become chairman, president and chief executive of the spin-off venture. That company, dubbed Newco, will boast a hodgepodge of marginal and unrelated operations plucked from the conglomerate formed by the merger of Allied Corp. and Signal Cos. in September. The company will have $3.1 billion in annual sales, a work force of about 24,000 and will be based at least temporarily in New York.

Allied-Signal executives contend, however, that Dingman, whose family still lives in La Jolla, will relocate his new venture to the San Diego area early in 1986.

It remains uncertain if the new international company will be housed in Signal’s former headquarters, a posh, 87,000-square-foot Spanish-style facility, or if it will be headquartered in an adjacent 50,000-square-foot companion building now under construction.

Derbes was senior executive vice president of Signal before the Allied merger.

Derbes said he will have a “small staff,” although the number hasn’t yet been determined. Included will be a handful of “regional managers” from around the world, as well as managers from “target countries with high potential,” such as China, Japan, Brazil, Korea and India, he said.

Formation of the new international subsidiary wasn’t announced during the restructuring because “we were afraid it would get lost in the shuffle,” said Derbes.

Shumway also will be based in Signal’s old La Jolla headquarters with a small but undetermined number of staff.

Employees “took the news well,” according to one executive. “They took it lightly. They didn’t get laid off, the package is fair, they have plenty of notice and there’s no rush.”