A bidding war for the defense and aerospace units of LTV Corp. intensified Tuesday when Loral Corp. and two partners raised their offer by $30 million to $475 million.
Loral and its partners, Los Angeles-based Northrop Corp. and a Washington, D.C., investment firm, Carlyle Group, increased their bid as part of a battle with Martin Marietta Corp. to acquire LTV Missiles and Aircraft Products. Martin Marietta, based in Bethesda, Md., has offered $440 million for the LTV unit.
Loral is sweetening its bid for the missile division of bankrupt LTV by promising to protect the jobs of LTV workers, a promise that could endanger the nearly 2,000 jobs at Loral's Newport Beach missile plant.
The Loral team's bid is made up of $450 million in cash and $25 million in preferred stock. The cash component surpasses by $54 million the amount of cash included in Martin Marietta's offer.
Loral said the sweetened offer included several elements that make its bid more attractive.
Among the elements is "job protection for LTV workers." Loral, which previously had said only that it would consider moving the Orange County plant, said Tuesday that it now intended to "shift a substantial amount of its existing $350 million of missile work" in the Newport Beach Loral Aeronutronic division to LTV plants.
Should its bid win court approval, Loral said it would transfer the missile work to LTV plants in Camden, Ark., and Grand Prairie, Tex. The federal bankruptcy court judge in Dallas who is overseeing the LTV case is expected to review Loral's bid Thursday.
Loral has been laying off workers at the Newport Beach Aeronutronic plant since early this year. At least 600 have lost their jobs, reducing the work force to less than 2,000.
Loral officials wouldn't speculates about possible job losses in Newport Beach. "It's incredibly premature to conclude anything about Aeronutronic," said Elizabeth Allen, a Loral spokeswoman in New York. "We said we won't move the missile business out of LTV. We don't know if (the bid) will be successful."
The Newport Beach facility is losing its attractiveness because of high operating costs.
Loral leased the Aeronutronic property from Ford Motor Co., but the rent on the 99-acre property is scheduled to increase from $92,000 a month to $1 million a month in 1996, and the lease expires in 1998.
"We have a need to relocate that facility in Newport Beach," Allen said. "We have said it's a solution to a short-term problem that everybody knew we had."
In a separate action Tuesday, Carlyle Group filed a lawsuit against Martin Marietta, alleging that Martin interfered with an earlier bid by Carlyle Group and France's Thomson-CSF for LTV's defense operation.