UPBEAT SELLERS OK ROCKETDYNE DEAL.

Byline: Dave McNary Daily News Staff Writer

Ownership transfer of Rocketdyne, long one of the San Fernando Valley's most significant aerospace operations, from Rockwell International Corp. to Boeing Co. received final shareholder approval Wednesday amid optimism about the division's long-term outlook.

The positive feeling comes from solid prospects for commercial rocketry, Boeing's overall strength and minimal concern about layoffs. Job losses usually have accompanied such deals in the aerospace-defense field during the past decade, but no layoffs have been proposed since Boeing announced the $3.2 billion purchase of Rockwell's aerospace-defense operations in early August.

``Boeing has made it clear that they do not anticipate any layoffs,'' said Paul Sewell, a spokesman for the 41-year-old rocket engine maker, which employs 4,100 locally and an additional 750 elsewhere.

``I think they're doing a remarkable job of making the transition positive. Boeing sees what we do as a growth area while Rockwell has seen it as flat.''

The deal, scheduled to close Friday, moved toward completion Wednesday as Rockwell International shareholders overwhelmingly backed the sale of eight divisions and a joint venture making up Rockwell's aerospace and defense businesses.

Rockwell, which made its name as the prime contractor for the Apollo and space shuttle missions, will remain as a conglomerate with operations in semiconductors, auto parts, avionics and communications.

About 97 percent of Rockwell shareholders approved the deal. The 21,000 Rockwell employees who will transfer to Boeing include about 1,000 workers at Rockwell's Space and North American Aircraft divisions in Palmdale.

More than 4,000 employees are expected to attend a Day One celebration at Rocketdyne's Canoga Avenue plant at 11:45 a.m. today.

A new Boeing sign will be placed in front of the plant, but the division will continue to be called Rocketdyne and will be part of Boeing's Rockwell operations.

The Boeing Rockwell unit, dubbed Boeing North American, will be headquartered at Rockwell's corporate office in Seal Beach.

Sewell said employees' Rocketdyne badges probably will not be replaced for several weeks and paychecks for this week will bear the Rockwell logo.

``The transition is going to be pretty transparent,'' he said.

Sewell also said Rocketdyne will close, as usual, during Christmas week.

Paul Nisbet, a defense-aerospace analyst with JSA Research Inc., said it is unlikely there will be major changes in the Rocketdyne operations in the near future.

``Rocketdyne has an excellent reputation, and they've been in the business forever,'' he said. ``There should not be any significant reductions, and it could become larger.''

Nisbet said Rocketdyne may eventually grow if Boeing puts the division in charge of upper-stage rockets, built as boosters for major satellite launches, and the Sea Launch operation, which is using Ukrainian motors and Russian rockets.

Jon Kutler, president of Quarterdeck Investment Partners of Los Angeles, said Rocketdyne's outlook has improved over the past year because of the overall growth in commercial rocket-launch business. ``Now that Boeing owns it, their future is more secure,'' he said.

Analysts already have noted that the deal opens opportunities for Boeing to capture more defense business and to take advantage of its role as the builder of the $30 billion international space station.

The combination of the Rockwell businesses with Boeing's Defense and Space Group will generate about $9 billion in annual revenues, including Rockwell's half interest in United Space Alliance, the partnership with Lockheed Martin Corp. to manage the National Aeronautics and Space Administration's space program.

``Space will be a key focus for Boeing,'' said Kutler, who noted that Rocketdyne was probably not the most attractive of the Rockwell assets that are being acquired.

``Given their druthers, I don't think Boeing would have picked it up, but now that they have it, I expect them to make the most of it.''

Kutler said there is always a possibility that Boeing may sell Rocketdyne, but predicted that Boeing will leave Rocketdyne alone for the near future.

``What to do with Rocketdyne is somewhere on their list of priorities, but it can't be near the top,'' said Kutler, noting Boeing is giving major attention to its partnership with McDonnell Douglas Corp. for work on Boeing commercial aircraft and competition for the next-generation strike fighter for the Pentagon.

The Rocketdyne deal calls for Boeing to assume $2.17 billion in debt and other Rockwell liabilities. While already a major high-technology operation, a debt-free Rockwell is freer to pursue acquisitions of other companies, expand its investments and buy back stock to drive up its share price.

``In my judgment, this is a true win-win transaction for Boeing, for Rockwell, for our employees and for our shareholders,'' said Donald R. Beall, Rockwell chief executive, at a midtown Manhattan meeting where shareholders completed their approval of the deal.

The sale will be accomplished without any taxes paid by either party because of a tax break for merger-related spinoffs. The Clinton administration is considering eliminating the tax break next year.

Under the transaction, Rockwell's shareholders will receive about $860 million in Boeing stock, or about $4 a share.

Rockwell stock was unchanged Wednesday at 62-1/8 while Boeing was up -1/4 to 96-3/8.

Analysts said Rockwell is likely to become a more formidable rival in technologies such as computer chips that make modems and other electronic devices faster and more efficient.

Rockwell's chips already are used in mobile phones, central devices that relay wireless communications and in a new type of cordless phone that uses digital signals to increase voice clarity.

``On balance they've positioned themselves very well,'' said Jeffrey Sprague, an industry analyst in the New York office of Cowen & Co.

``The challenge is always going to be that it's a very fast moving business,'' he said. ``You have to keep a pipeline full of new faster things coming all the time.''

Toward that end, Rockwell is steadily boosting research and product development in these new areas, lifting spending by nearly 17 percent to $700 million in 1996, or about 13 percent of sales.

Rockwell already supplies chips for about 65 percent of modems sold in the United States, according to Dataquest, a market research firm. Early next year, it is introducing a new chip that cuts in half the time it takes computer users to go on-line and download information, helping to answer a common complaint that the World Wide Web takes too long to access.

CAPTION(S):

2 Photos

PHOTO (1) Donald R. Beall, Rockwell board chairman, speaks in favor of selling the Rocketdyne division to Boeing.

Associated Press

(2) The foundation is cordoned off Wednesday for a new Boeing sign to rise today at the Rocketdyne plant in Canoga Park.

Hans Gutknecht/Daily News