NORTHROP GRUMMAN is to shed another 1,000 jobs, following the Pentagon's decision to abandon the Tri-Service Stand-off Attack Missile (TSSAM) programme.
The group says that the cancellation of the troubled stealth-missile programme should have little impact on this year's financial results, however.
The latest cuts come on top of the restructuring plan announced in 1994, which aims to reduce the workforce by 9,000 and make radical cuts in floor-space. The plan was announced in the wake of Northrop's acquisition of Grumman in the first quarter of 1994.
The group reveals in its 1994 results that it set aside $324 million to cover the cost of restructuring, largely paying for the introduction of a new voluntary retirement scheme. Despite the provision, Northrop Grumman managed to end the year showing a net profit of $35 million.
Sales were up by nearly one-third, at $6.7 billion and Chairman Kent Kresa expects to maintain that figure in 1995. He confirms, however, that Northrop would have seen sales decline by 10% without the acquisition of Grumman and the absorption of the remainder of the Vought Aircraft aero-structures business in the second half of the year.
All of Northrop's main contracts declined, including work on the B-2 stealth bomber, shipsets for the McDonnell Douglas F-18C/D and fuselage deliveries for the Boeing 747.
Defence-programme margins continued to improve, however. The group's order backlog also doubled, to reach a near-record high of $12.1 billion.
Northrop Grumman says that, the TSSAM programme added $276 million to sales and lost $20 million before tax, during 1994. It adds that the termination is not expected to have "any material financial impact".
In 1993, Northrop had put aside $201 million against the TSSAM, which left net profits for the year at $96 million. The group says that a key goal for 1995 is to reduce its $1.9 billion debt to $1.6 billion.
Source: Flight International
