Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, July 14, 1994 TAG: 9407140086
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: By STEPHEN FOSTER STAFF WRITER|
DATELINE: FAIRLAWN LENGTH: Medium
"There's no need to go out and alarm the work force," said Bob Whistine, spokesman for the U.S. Army Armament Munitions Chemical Command in Rock Island, Ill. "We're going to workload our plant."
In saying so, Whistine gets to the crux of the relationship between the Army, which owns the arsenal and its facilities, and the plant operator or contractor - currently Hercules.
The Radford arsenal is the Army's only manufacturer of solvent propellants, which are used in various pieces of ammunition. As long as the Army needs propellant, whether it awards contracts to Hercules, Alliant or some other company, the product will have to be made at Radford, Whistine said. There's no other place to make it, he said.
Radford's a specialty shop, Whistine said. "That's one of our plants that has a future," he said. "Radford's got a future."
Whistine also repeated that the deal is far from sealed.
While the Hopkins, Minn.-based Alliant and Wilmington, Del.-based Hercules Inc. have signed a letter of intent, there are plenty of details to be ironed out, not the least of which is a proxy fight between the company's board of directors and a group of Alliant shareholders.
Last month, Capstay Partners L.P., which owns almost 5 percent of Alliant stock, proposed replacing Alliant's current slate of six non-employee directors with its own, Alliant spokesman Rod Bitz said. The matter is to be decided at Alliant's annual meeting July 27, and Bitz would not speculate how the Hercules deal might change if the group persuades stockholders to side with them.
The deal goes far beyond the Radford arsenal. Hercules Aerospace operates eight plants in seven states. The combined operations of Alliant, now the largest supplier of ammunition to the Department of Defense, and Hercules Aerospace would have about $1.4 billion in sales and 10,500 employees.
According to a story last month in Investment Dealers' Digest, a New York magazine focusing on securities and finance, Alliant's strategy of acquiring businesses as a response to defense downsizing angered many shareholders last year.
The federal government also will have to approve the sale, which could be questioned because of the sensitive nature of the ordnance-manufacturing business.
Although Hercules spokesman Bob Hessler downplayed that possibility, Whistine said, "someone a lot higher than us is going to have to say 'yes, you can merge.'"
Bitz said it is far too early to begin considering what, if any, steps Alliant might take to make current Hercules operations more profitable if the deal goes through. But he said Hercules workers would receive benefits "comparable to what they have now," and he said the company is not contemplating any renegotiating with unions.
The Army also has been working for months with Hercules on a facilities contract for the arsenal, which would allow the arsenal's operator to contract with other companies to do non-military work.
The idea is: If other companies are paying for use of the facilities, it reduces the cost of the Army's product - propellant - because the Army doesn't have to spend as much on plant overhead costs and maintenance.
"We've got to do that, regardless of who's there," Brig. Gen. James Boddie, who heads the Rock Island command, said Tuesday.
by CNB