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Northrop Eliminates Five Executive Posts : Streamlining Designed to Cut Costs, Concentrate Responsibilities

June 27, 1989|RALPH VARTABEDIAN | Times Staff Writer

Northrop eliminated five executive-level positions Monday and retired or reassigned the men who held the jobs in an effort to streamline its organization.

Two senior vice presidents, Joseph T. Gallagher and C. Robert Gates, will be retired within 60 days, the company said. Gallagher is 52 and Gates is 64.

Northrop President Kent Kresa said in a prepared statement that the changes are aimed at cutting costs, improving communications and concentrating responsibilities in the corporate office.

The Los Angeles-based aerospace firm disclosed last month that it was initiating a reorganization and that it would eliminate 2,500 to 3,000 jobs across the company, partly because the firm's workload was declining and partly because it wanted to cut its overhead costs.

In the executive moves announced Monday, the company also appeared to be preparing for Kresa to take the job of chief executive, which will occur by the end of the year, when Northrop Chairman Thomas V. Jones retires as an active employee.

Jones characterized the restructuring Monday in an interview as "pruning a tree to support the fruit on it." He also said he was seeking to give Kresa "a clean ship when he takes over."

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Gates has been in charge of Northrop's international business, which once consisted of F-5 aircraft sales, training services to the Saudi Arabian military and a variety of other aircraft service work. Virtually all of that has been eliminated or is being sold off.

Northrop said Gallagher, who had carried to title of senior vice president for programs, will leave active management but continue as a consultant on advanced fighter aircraft development. Northrop is one of two prime contractors competing to win a production contract to build the Air Force's advanced tactical fighter program.

In addition, three vice presidents under Gallagher are losing their positions as corporate officers of Northrop. They are Jaime Oaxaca, who is retiring; Lou Carrier, who will be reassigned to the firm's aircraft division; and Robert Lovell, who will be put on special assignment in the firm's B-2 division.

Northrop has experienced sweeping changes in its corporate executive ranks over the past year, including the retirements of three other corporate officers and the death of a fourth.

Welko Gasich and William G. McGagh were retired amid a federal investigation last year and John Paterno, who headed the firm's B-2 bomber program, died.

In addition, Joseph Yamron, a corporate vice president who headed the firm's precision products division, is under federal indictment and has been put on leave of absence.

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