
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, August 11, 1994                   TAG: 9408110059
SECTION: BUSINESS                    PAGE: B8   EDITION: METRO 
SOURCE: STEPHEN FOSTER STAFF WRITER
DATELINE:                                 LENGTH: Medium

HERCULES DROPPING AEROSPACE

With a deal to sell its aerospace operations to Alliant Techsystems Inc. still far from finished, a spokesman for Hercules Inc. reconfirmed Wednesday his company's intention to get out of the kind of work done at the Radford arsenal.

In the long run, Hercules spokesman Bob Hessler said, workers at the Radford Army Ammunition Plant would be better served by another company more committed to aerospace work.

Alliant, the Hopkins, Minn., company that has proposed buying Hercules Aerospace, earlier this week announced the results of a shareholder proxy vote that installs six new directors, all of whom have questioned the deal.

But either way, Hercules intends to sell the portion of its business that oversees operations at the arsenal, Hessler said.

When it was announced last month that Alliant had reached a tentative agreement to buy Hercules' aerospace operations for $365 million and 3.5 million shares of Alliant stock, Hercules said it wanted to focus its efforts on its chemical business, which last year accounted for about 75 percent of the company's $2.7 billion total revenues.

That desire won't change, Hessler said. Operations at the unit's eight plants - of which Radford's is the second largest - are "not getting a fair shake " by having to compete for research and development dollars and other monies.

If Alliant were to back out of the deal, "we have a couple of options in mind," Hessler said. He would not elaborate.

Hessler said Wilmington, Del.-based Hercules is proceeding in the negotiations with Alliant, despite the fact that Alliant's board of directors is to include six new members who recently seized control, partly by persuading stockholders that there were substantial questions regarding the Hercules deal.

Capstay Partners L.P., the Alliant shareholder that nominated the six new members who will work with three top Alliant managers re-elected to the board, now says it will examine all alternatives.

"We have no reason to suspect" the sale won't occur, Hessler said. In the long run, Alliant would be a better company than Hercules to run the arsenal, he said. "That's a company that is committed to aerospace. Everything that they do is focused toward aerospace."

Ken Thompson, president of Local 3-945 of the Oil, Chemical and Atomic Workers International Union at the arsenal, agreed. "If the deal goes through, it would be a big help to us," he said. Alliant has said the Radford arsenal is one of the jewels of the deal, because it would provide Alliant with an in-house supply of propellant for its munitions.

Bob Whistine, spokesman for the U.S. Army Armament Munitions Chemical Command in Rock Island, Ill., wouldn't comment on whether the Army would have a preference in working with Hercules, which has run the arsenal for 50 years, or Alliant, the largest supplier of ammunition to the Department of Defense.

"Both of them have a history of good working relations with the Army," he said.

by CNB