Northrop Studies Plan to Merge Units in Anaheim and Hawthorne
Northrop Corp. is studying a plan to merge its only Orange County plant, the electromechanical division in Anaheim, with its electronics division in Hawthorne, a move that company officials say could streamline operations and improve productivity.
The company alerted employees in October that the merger study was in the works, said Tony Cantafio, Northrop’s vice president for public information. Cantafio refused to comment on whether layoffs or a plant closure would result.
“The study is still in process,” Cantafio said Wednesday. “It would be premature to comment on any details. . . . No conclusions have been made yet.”
The study will determine, in part, how compatible the two divisions are and whether combining them would would be feasible and effective, Cantafio said.
The Anaheim operation employs just under 2,000 workers and manufactures electronic sensing and optical devices. The Hawthorne division employs an estimated 2,800 and specializes in navigation and guidance equipment.
Northrop employs a total of about 46,000 workers, two-thirds of whom are in Southern California.
In the past year, Northrop has been plagued by lawsuits and allegations that it produced defective guidance systems for the MX missile. The guidance systems are manufactured primarily at the Hawthorne division.
Northrop experienced significant delays in delivering the guidance devices and was targeted by civil and criminal investigations. The Justice Department sued the company for fraud in 1987.
“We did have a scheduling problem and were behind in deliveries in units to the Air Force,” Cantafio said. “As of now, we are 2 months ahead of schedule.”
In the 9 months ending Sept. 30, operating profits from Northrop’s various electronics divisions dropped to $40.2 million, from $46.4 million in the same period in 1987. Contract acquisitions also dropped in the first 9 months of 1988, to $556.5 million from $837.2 million for the same period in 1987.
