Rockwell Shareholders OK Sale of Aerospace, Defense Units to Boeing
Shareholders of Rockwell International Corp. on Wednesday overwhelmingly approved the company’s $3.2-billion sale of its defense and aerospace operations--once its core business--to Boeing Co.
Rockwell, which also is selling its Seal Beach complex to Boeing, is expected to reveal this month where it will relocate its headquarters and 400 employees who work there. The company has said it is looking for a site in Long Beach or Orange County.
The deal with Boeing, expected to close Friday, ends an era that saw Rockwell become a major government contractor that made the B-1 bombers and space shuttle fleet. Rockwell will now consist of a commercial electronics unit in Newport Beach--the leading producer of computer modem semiconductors--and automotive, industrial automation, and aircraft navigation and communications units, all based in the Midwest.
“It’s a major transformation of this company,” Chairman Donald R. Beall said after the special shareholders’ meeting in New York.
Beall charted the new course more than a decade ago. In the past dozen years, he said, the company has cut its reliance on government contracts from 63% of its revenue to just 6%. At the same time, it has looked overseas for new commercial business, pushing that market from 13% of total sales to 43%.
Boeing, meantime, will create a Boeing North American division in Seal Beach and maintain the former Rockwell plants in Los Angeles and Orange counties and elsewhere in the nation. About 20,000 employees--and $2.6 billion worth of business--are transferring to Boeing. No layoffs are expected.
Boeing expects to raise its sign on its new regional headquarters in a ceremony this morning.
In the deal, Boeing will issue $860 million of its common stock to Rockwell shareholders and will assume more than $2.2 billion of Rockwell debts, other liabilities and certain employment retirement obligations. That gives Rockwell, with 60,000 employees in 200 plants worldwide, a clean slate on which to build its remaining businesses.
Beall said the company, with $10.4 billion in revenue after the sale, will continue to expand its separate divisions internally and through acquisitions. “But I wouldn’t look for Rockwell to move into any new business,” he said.
Wall Street, which cheered the deal when it was announced four months ago, barely reacted to a shareholder vote that was 97% in favor of the sale. Rockwell’s stock closed at $62.125 a share, unchanged from Tuesday’s close on the New York Stock Exchange.
