Hughes to Build $91.5-Million Air Defense System : Jobs: The contract with Taiwan provides an important boost to the Fullerton-based subsidiary, which, since 1985, has been forced to employ 5,000 fewer workers.

In landing its second major contract in a month, Hughes Aircraft Co.’s Ground Systems Group confirmed Wednesday that it had won a $91.5-million contract to build an air defense system for Taiwan.

Under the contract, Hughes will revamp Taiwan’s existing air defense system. The system is intended for use in providing advance warning of an enemy air attack and directing counterattacks against enemy aircraft.

Hughes did not publicly disclose the Taiwan contract, but published a story about the award in the Dec. 15 edition of a company newsletter.

The contract with Taiwan is considered a key project for Hughes because it provides a boost to one of the Fullerton unit’s oldest and biggest businesses: building air defense systems. Hughes has built 23 air defense systems during the past two decades.

The business boomed in the mid-1980s, when many nations were building or overhauling their defense systems. Hughes was involved in building air defense systems for nine nations earlier this decade, but business has since fallen off.

“There are not many of these contracts out in the world right now,” said a Hughes official who asked that his name not be used.

With the Taiwan contract, Hughes will have three programs under way, including systems for Egypt and the United Kingdom, the Hughes official said.

The last month has been a good one for Hughes’ ground systems unit which, like many defense operations, has been struggling to cope with stingier Pentagon budgets. The Fullerton division has reduced its employment from a peak of 15,000 in 1985--at the height of the Reagan Administration defense buildup--to about 10,000 currently.

Late last month, the ground systems group scored a major victory by beating out International Business Machines Corp. for a $325-million contract to upgrade Canada’s air traffic control system.

In August, 1988, IBM beat out Hughes for a $3.6-billion award--the largest ever awarded by the Federal Aviation Administration--to overhaul the nation’s air-traffic-control system.

The loss was a tough blow to the Fullerton unit, which was forced to close down a division formed to work on the contract.