Union neutral on Lockheed proxy battle.

Union neutral on Lockheed proxy battle

The union that represents most of the blue-collar workers at Lockheed Corp. facilities in Los Angeles County will probably remain neutral in the upcoming proxy battle for control of the company, the sixth-largest defense contractor in the country, according to a union spokesman.

The local union's neutrality conflicts with the AFL-CIO's national executive council that recently went on record as opposing the takeover attempt by Texas financier Harold Simmons.

Don Nakamoto, a spokesman for the International Association of Machinists and Aerospace Workers District 727 in Burbank, said, "There has not been a decisive factor so far that would make us support one side or another."

He said both the current management and billionaire Simmons, who is planning a battle for control of Lockheed at its annual meeting next month, have taken steps or issued statements appealing for union support. "But right now neither side has done enough to sway us in one direction," said Nakamoto.

Last year, when Simmons also tried to acquire the company through a proxy fight at the annual meeting, the union remained neutral as well, noted Nakamoto.

It is uncertain exactly how much influence the union's support would have in the outcome of the fight, but Nakamoto noted that some large institutional investors have sought the organization's backing.

"Some of our members hold stock and are participants in the Employee Stock Ownership Plan, but in general we do not hold a large segment of stock. But we have been approached by institutions looking for our support so we may have some influence," said Nakamoto.

In Bal Harbour, Fla., at a meeting of its national executive council, the AFL-CIO said it opposed Simmons' proposal because hostile takeovers and leveraged buyouts "continue to line the pockets of speculators, investment bankers and lawyers at the expense of working people...."

"The AFL-CIO opposes this takeover because of the severe disruption it will cause to workers, their families and their communities," the national organization said.

The AFL-CIO called Simmons a "notorious corporate raider" and said his previous deals have "resulted in the loss of nearly 10,000 jobs."

In order to finance his takeover attempt, the council said, Simmons will probably have to break up the company and sell its parts.

J. Landis Martin, an aide to Simmons and chief executive officer and president of NL Industries in Houston, denied that his boss has been responsible for the loss of any jobs.

"That is a totally inappropriate characterization," Martin said. "The jobs that were lost were in a deregulated trucking industry when strikers did not return to work at Time D-C trucking company.... In Illinois, a company was closed because it could not be operated profitably. I would challenge those union numbers of 10,000. It was more like 1,200 and Mr. Simmons was not responsible for them."

Martin said it would be better for the AFL-CIO to look at current Lockheed management than at Simmons, who is chairman of NL Industries.

"The local union may say they are neutral in this but if you talk to the workers they are very angry and mad. (Lockheed Chairman Daniel) Tellep has laid off over 4,000 workers," said Martin.

Institutional investors and many defense industry analysts have said Lockheed is in a much better position this year to turn back Simmons' bid because of management changes and improved financial results, as well as a rebounding stock price.

Nakamoto said the union has approved of management changes at Lockheed's advanced development division (known as the 'skunk works') "but on the negative side is the move to Georgia."

Lockheed is closing down most of its operations in Burbank and moving to new facilities in Marietta, Ga. Several thousand local workers are losing their jobs as a result of the move but the company will retain its headquarters in Calabasas and other facilities in the Los Angeles area.

Nakamoto said in Simmons' favor is his statement that he would not be in such a hurry to sell off Lockheed's land holdings in Burbank. Lockheed has been in negotiations with the Burbank-Glendale-Pasadena Airport in Burbank to sell the property.

"That could mean employment for some of our people," said Nakamoto.

Martin confirmed that Simmons probably would hold onto the Burbank property, but so far has not determined how it could be used.

In other developments in the upcoming fight for the company, Lockheed rejected Simmons' proposals to debate Tellep and to limit proxy campaign expenses to $5 million and mailings to shareholders. Earlier in February, the two sides agreed not to take out newspaper ads during the campaign, a practice that last year cost both the company and Simmons millions of dollars.

Simmons has been trying to acquire Lockheed for almost two years, starting in April 1989 when he disclosed that he held a 5.2 percent stake in the company. Currently, Simmons owns 19.8 percent of Lockheed's stock, which has been trading in the $39-a-share range, well above its 52-week low of $24.75 and close to its 52-week high of $42.50.

Lockheed's annual meeting is scheduled for April 2.