Trans Com to Be Sold to Sony

Trans Com Systems, an Irvine manufacturer of stereo and movie systems for airplanes, will be sold to Sony Corp. for more than $50 million.

Selling was Sundstrand Corp., a Rockford, Ill., defense contractor hit recently with $198.6 million in fines and payments to settle a federal investigation of defense contract fraud.

There was speculation Sundstrand may have agreed to sell Trans Com to raise cash, but a spokesman said that is not the case. Instead, he said, Sundstrand sold the unit because it could no longer compete effectively.

Trans Com has encountered a much more difficult market since the Japanese company Matsushita decided to sell its own stereo and movie equipment directly to airlines, bypassing a Trans Com competitor that had packaged Matsushita’s systems for sale.

By selling directly to the airlines, Matsushita was able to undersell Trans Com and other companies in the market.

So Sundstrand decided to sell, since its “philosophy is to be the market leader in almost every business we’re in,” the spokesman said.

Sony should do better with the unit since it already supplies Trans Com with 70% of its video and audio components. All the major airlines are customers, said the Sundstrand spokesman, and Trans Com had sales of $40 million last year. The company employs 260.

The sale must be approved by both companies’ boards.