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Raytheon Set to Launch Restructuring : Defense: The maker of the Patriot missile, citing military cutbacks, will close some plants and lay off up to 4,400 workers.

March 10, 1994|From Times Wire Services

BOSTON — Raytheon Co., maker of the Patriot missile, is shutting down plants and shedding about 4,400 employees because of the massive cuts in U.S. defense spending, the company said Wednesday.

The restructuring will result in a first-quarter, after-tax charge of $162 million, the defense contractor said.

About 65% of the charge, which amounts to $1.20 a share, is related to the company's defense business, it said. Raytheon makes defense electronics, small airplanes, appliances and Patriot missiles, which were used during the Gulf War against Iraq.

The Lexington, Mass.-based military contractor said it is consolidating to maintain its competitive position. It said that before the restructuring-related charge, sales and earnings for the first quarter were expected to hit record levels.

Raytheon's restructuring will take place over the next two years. It could result in layoffs of about 4,400 workers, or 7% of the work force, the company said in a statement. None of the layoffs will occur in California, it said.

Raytheon said the move was not prompted by an Army recommendation against buying the latest Patriot missiles, but by broad cuts in defense spending.

Industry analysts said the restructuring should bring swift cost savings and sharpen Raytheon's competitive edge.

Raytheon's stock closed up 62.5 cents at $64.625 on Wednesday on the New York Stock Exchange.

In a related development, FMC Corp., maker of the Bradley Fighting Vehicle, said it is moving most of its production out of California as a result of a merger and the shrinking defense industry.

In San Jose, 500 people, a fifth of the company's work force, will have lost their jobs when the move is completed in two years.

The company employed a peak of 7,500 people at four San Jose locations in 1984. Since then, its work force has shrunk to 2,300. The company said it will keep 1,300 people in San Jose after the move takes place.

The announcement had been expected since FMC's local operations merged with the BMY Combat Systems Division of Harsco Corp. of Camp Hill, Pa.

FMC, based in Chicago, said it will transfer most of its production to Pennsylvania, combining most of its heavy-manufacturing operations at the BMY plant in York, Pa.

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