ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, November 14, 1996 TAG: 9611140038
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: PITTSBURGH
SOURCE: Associated Press
FORMER PEPSICO EXECUTIVE MICHAEL JORDAN will head the still unnamed media company, which will consist of CBS Inc.
Westinghouse Electric Corp. is splitting in two - separating its growing broadcast empire from its shrinking industrial base in a move that will eliminate 1,100 jobs.
Although the move had been anticipated, the news Wednesday still had the power to electrify. Investors quickly began to speculate whether the new broadcast company, which includes CBS, will be a takeover target when it becomes independent next summer.
``Already the scuttlebutt is, `How much is it worth and who would take it?''' said Robert Kanters, a market analyst for Legg Mason Masten Inc. in Pittsburgh.
The media company, which is searching for a name, will be based in New York. The industrial company, to remain in Pittsburgh, will be called Westinghouse Electric Co.
The industrial and media businesses are roughly equal in size, but the media side accounts for most of the stock's value.
Under former PepsiCo executive Michael Jordan, Westinghouse has grown into a media company with 16 TV stations reaching one-third of the nation and 77 radio stations in 13 markets.
The company expects that as a broadcast business, Westinghouse will be able to increase profits faster than if it held onto its industrial half, which includes nuclear power generators and refrigerated trucks. Although Westinghouse may be remembered as a manufacturer of appliances, it sold that business more than 20 years ago.
The $4.2 billion broadcasting company will consist of CBS Inc., the largest television and radio broadcaster; Group W Satellite Communications Company, a leading cable television marketing and distribution company; and Infinity Broadcasting, when that acquisition is completed.
The Justice Department announced Tuesday it had approved the Infinity deal, which still needs approval from the Federal Communications Commission and shareholders of both companies.
The $4.6 billion industrial business will focus on electric power generators, including the world's largest nuclear-power business, and its Thermo King mobile refrigeration line. It plans to sell 20 percent of the stock of Thermo King, leaving that business a subsidiary of Westinghouse Electric.
Kanters said he wonders about the prospects of the industrial business. Executives already have cut costs and restructured to wring more profits.
``With the exception of Thermo King, there aren't really any stars in that business,'' Kanters said.
The industrial business, meantime, will cut 800 more jobs in addition to the approximately 300 who accepted buyouts this fall. The cuts reflect its smaller size, a soft market for power plants and the need to reduce costs. Severance pay and related expenses will cost Westinghouse about $125 million, which will reduce results in the fourth quarter.
No leader has been selected for the industrial company. Jordan will continue as chairman and chief executive officer of the broadcast company, which will be named only after research.
``This is like naming a new brand of Doritos,'' Jordan said.
After the division takes effect, stockholders will be mailed two shares, one in each company, for each share they hold now of Westinghouse.
Westinghouse closed Tuesday at a 52-week high, but dropped 87 1/2 cents to $19.75 Wednesday on the New York Stock Exchange.
LENGTH: Medium: 71 lines ILLUSTRATION: PHOTO: (headshot) Jordan. color. Graphic: Chart by AP. color.by CNB