Rockwell, Eaton Unit Cancel Deal Over Equipment Glitches
An agreement for Rockwell International Corp. to buy the Eaton Corp. subsidiary that makes electronic defensive gear for Rockwell’s B-1B bomber has been canceled because of development problems with the equipment, the companies announced Wednesday.
Rockwell also disclosed that it has been hired by Eaton to help work out the bugs in the so-called electronic countermeasures system, which is designed to help protect the high-tech supersonic bomber that Rockwell makes for the Air Force.
El Segundo-based Rockwell announced last month that it had reached an agreement in principle to buy AIL Systems Inc. of Deer Park, N.Y., a subsidiary of Eaton Corp.
May Reconsider
The deal was canceled, the companies said in a joint announcement, because of uncertainty about AIL’s contract to produce the ALQ-161 electronic countermeasures system for the Air Force. No price was ever disclosed, but some industry analysts put AIL’s value at $350 million to $400 million.
If bugs in the program are ironed out and the contract stabilized, Rockwell would reconsider the purchase, said Rockwell spokesman William Mellon.
Rockwell, prime contractor on the B-1B, delivered the last of the $280-million planes to the Air Force in April. The Air Force has said that the bomber is fully operational, but critics in Congress say its ability to perform in battle would be hampered by flaws in the countermeasures system designed to befuddle enemy radar and other electronic gear.
AIL built the electronics gear under a $3.5-billion contract and has offered to remedy its flaws for $520 million.
4,400 Employees
Wednesday’s announcement was the first public indication that Rockwell would take part in making the fixes. Spokesman Mellon wouldn’t reveal Rockwell’s exact role in the operation.
Cleveland-based Eaton, a maker of automotive and electronics products, has had AIL up for sale for about a year.
AIL, with 4,400 employees, has headquarters in the Long Island city of Deer Park and factories at Hauppage and Melville, N.Y., and in Westlake Village.
