Fairchild Industries Sells Its Aircraft Units, 3 Others
Fairchild Industries said Wednesday that it has agreed to sell its two remaining aircraft subsidiaries to a Los Angeles investor group for about $50 million.
In addition, Fairchild agreed to sell three small manufacturing companies in the Los Angeles area for about $25 million to an investor group made up of Fairchild employees.
Under a restructuring announced earlier this year, Fairchild said it was leaving the aircraft business and divesting other operations in an effort to focus on aerospace and defense electronics.
Fairchild announced at that time that it was closing down its Fairchild Republic plant in Farmingdale, N.Y., which had been developing a new jet trainer. Shortly before that, the Air Force had canceled the program after longstanding difficulties.
Fairchild, headquartered in Chantilly, Va., said Wednesday that it had agreed to sell Fairchild Aircraft, which builds twin-engine commuter aircraft in San Antonio, and the Fairchild Aircraft Service division, which has its largest operation in Florida.
The aircraft units were purchased by GMF Investments, a private holding company. Its three principals are Gene Morgan, president of Gene Morgan Financials of Los Angeles, a small securities firm; Peter Douchy, president of McCormick Futures of Chicago, and Frederick Kopko, a Chicago attorney. Some unidentified members of Fairchild senior management will also be involved in GMF.
“We are buying the company intact, and we do not have any plans or agreements to dispose of any significant assets at the moment,” Kopko said in a telephone interview. “We think it is well positioned for future growth.”
He said the deal would be financed with bank loans and an unspecified amount of equity investment by the three principals.
The two aircraft units combined earned $13 million on revenue of $132 million in 1986, according to Fairchild Industries spokeswoman Deborah Tucker. The subsidiaries’ combined work force is 1,200.
The other divestitures disclosed Wednesday involved Tubing and Seal Cap, which produces doorknobs in Azusa; LaVerne Metal Products, which produces stainless steel washroom equipment, and Shortrun Stamping, which makes custom metal stampings.
The three units had operating earnings of $4.2 million on sales of $26 million in 1986. They employ 400. The units are being purchased by Pacific Precision Metals, which was formed by employees.
