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Saturday, Jul. 18, 1998
Northrop Grumman stock falls 7%
Company's workers are optimistic about future after failed merger
By JENNIFER BOWLES
Associated PressEL SEGUNDO, Calif. - Northrop Grumman stock fell 7 percent Friday following news the stealth bomber maker won't become part of the nation's largest defense contractor, but workers echoed management's upbeat view that the company could thrive on its own.
While some Northrop employees also said they were relieved that the merger with Lockheed Martin Corp. has been called off, there were analysts who said the Los Angeles-based company with a storied past in making war machines would now be relegated to the ranks of military subcontractors .
Lockheed pulled out of the merger Thursday, citing the failure to overcome government opposition to the move on grounds a merger would crimp competition.
The announcement came shortly after the Pentagon said it was unable to work out an agreement with Lockheed to modify the deal and that it would press on with a lawsuit.
``This particular proposed merger, in our judgment, would have contravened that insistence upon having strong competitive capabilities throughout the defense industry,'' Defense Secretary William Cohen said Friday in Washington, D.C.
Workers didn't believe there would be any layoffs, and worried only slightly about the drop in stock because it could affect their 401(k) retirement plans.
Shares of Northrop Grumman closed down $6.75 at $90.62 on the New York Stock Exchange, where shares of Lockheed Martin were off $1.50 at $105.43.
There were those who were glad the deal unraveled, in part because a merger could have relocated workers outside California, and raised the company's minimum retirement age by five years to 60.
``A lot of people are happy,'' said Errol Viernes, 44, a field representative to Northrop's suppliers. ``We're growing and we're trying to get more work, more contracts.''
Northrop Grumman's leader, Kent Kresa, said the merger's failure won't hurt the company, which has 52,000 workers and sales of about $9.2 billion.
``Our future was not dependent on this or any other merger,'' said Kresa, chairman, president and chief executive officer. ``As you know, Lockheed Martin came to us. We were not shopping the company, either then or now.''Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web