Like a scene from a John Wayne western in which the cavalry gallops in with bugles blaring, the federal government is coming to the rescue of a troubled Towson defense contractor.
The help is in the form of a $7.1 million Labor Department employee training grant. It is designed to save nearly 2,100 jobs within AlliedSignal Inc.'s Aerospace division, including more than third of those at the s communications plant on Joppa Road in Towson.
The plant has fared much better than most defense contractors in recent years. Its sales have remained steady in the $180 million to $200 million range, and it has as many workers today as in 1988, a peak year for Pentagon spending.
But its good times are slated to end.
When Labor Secretary Robert B. Reich announced the grant last month, he said that it would save 459 jobs at Allied's Towson plant. The plant has 1,200 workers.
It's estimated that $1.5 million of the federal funding will make its way to Towson.
Allied Aerospace was selected for assistance because it already is taking steps to improve its fortunes. The division is undergoing a major restructuring to lessen its dependence on military contracts by expanding into commercial markets.
The Towson plant dates to the early days of World War II. It was rushed into operation in 1941 to produce radio communication equipment for the U.S. and British air forces. After the war, it turned to the production of television sets under the Bendix name.
In recent years, however, it has shifted back to military contracts.
Today, the federal government, primarily the Department of Defense, accounts for about 95 percent of the plant's sales, according to Alan Dietrich, the 37-year-old engineer who took over as vice president and general manager of the Towson complex this year.
Its businesses fall into four major categories:
* Command, Control, Communications and Intelligence. This includes the production of computer terminals used by military commanders to draw data from spy satellites and the upgrade of an identification system used on military planes. It accounts for about $60 million in annual sales, or a third of the division's total.
* Target detection. This is the production of fuses used in the Patriot anti-missile that explodes a warhead as the anti-missile nears its target. It represents about 30 percent of the division's annual sales, or an estimated $54 million.
* Information Security Products. The plant makes electronic equipment, used by the federal government, primarily the National Security Agency, to secure sensitive telephone, computer, satellite and fax communications by encrypting the data. This is a $36 million business, accounting for about 20 percent of the plant's sales.
* Air Traffic Control. The plant produces an airport radar system for the Federal Aviation Administration that can speed up the process of landing planes on parallel runways at busy airports by getting a quicker reading on each plane's location. It represents about $30 million a year.
They all are good businesses, but they leave the company too dependent on federal contracts, said Mr. Dietrich, a 6-foot-6, 230 pounder. Mr. Dietrich has been with Allied since graduating from Columbia University in 1978 with a degree in electrical engineering. He is viewed as a rising star. Last year, he captured the attention of the top management when he headed a group that landed a major contract for an auto pilot system used on military cargo planes. The contract is expected to generate more than $1 billion in new business.
Mr. Dietrich, who came from the company's Teterboro, N.J., plant, would like to do something similar for Towson.
His hope is to market the technology the company developed to protect the government's electronic information system.
"This could be a huge market for Towson in the future," Mr. Dietrich said of the electronic equipment, which could be used by companies to keep competitors from eaves dropping on their video conferences and tapping into their phone calls, fax machines and computer systems. It could also safeguard the electronic transfer of funds.
"This market is still in its infancy," Mr. Dietrich said. "We see this as an area of tremendous growth potential."
He said that "almost any company transmitting competitive sensitive data, financially sensitive data and employee sensitive data" is a potential customer.
As part of a restructuring announced earlier this year, Towson was combined with Allied's anti-submarine warfare division in Sylmar, Calif., and the aircraft electronics operation in Teterboro to form the Government Electronic Systems division.
The division is a $1.2 billion a year business that is part of Allied Aerospace, which is one of the three operating arms of Morris Township, N.J.-based AlliedSignal.
Allied's Aerospace operations grossed $4.5 billion last year, accounting for 38 percent of the parent's total sales of $11.8 billion.
Analysts say the formation of GES and similar aerospace consolidations should cut operating costs by about $100 million this year and another $150 million next year.
But some workers fear the consolidation was done to make it easier for the corporation to sell off the unit as the stronger defense companies continue to gobble up the weaker companies.
Mr. Dietrich and others within Allied, including Lawrence A. Bossidy, chairman and chief executive officer, insist that GES is not for sale. They say the company has made a strong recovery since posting an operating loss of $291 million in 1991 and is not about to be gobbled up.
Laurence C. Baker, an analyst who follows AlliedSignal for Legg Mason Wood Walker Inc., agrees. "It's possible, but it is not likely. Allied sold off everything they wanted to sell two years ago. They have done their trimming and the things they have saved, including the Towson plant, seem to be earning their keep," he said.
Mr. Dietrich points to the company's recent $10 million investment in an automated printed circuit board shop at Towson as evidence that "it plans to be here for the long haul."
"This is the core of our business," he said, overlooking a glass-enclosed room where the arms of tiny robots swing back and forth in a rhythmic dance as they produce intricate printed circuit boards that will eventually make their way into the nose cones of Patriot missiles.
"It's the heart and sole of our operations. The circuit boards go into just about everything we make here," he said.
Others steps taken as part of the restructuring include:
* The designation of Towson as a "center of excellence" for the production of circuit boards. This means that it will supply all of the electronic boards used by GES and may eventually supply the entire Aerospace division.
* Reducing the number of outside suppliers to about 600 from 1,200. By giving fewer suppliers more business, the company was able to get a better price on parts purchased.
* Demanding that suppliers improve the quality of their products. In the past year, the defect rate of parts coming in has decreased by 65,000 parts per million, to less than 2,000.
* Cutting production cycles. This is the time between when an order comes in and a product is shipped. In some cases the time has been reduced from six weeks to two.
* Using a $150,000 grant from the Department of Economic and Employment Development (DEED) to obtain a quality assurance certification from the International Standards Organization, something it needed to get its foot into the door for new customers here and abroad.
"It didn't come easy," Audrey S. Theis, assistant secretary of DEED, said. "Workers had to be taught to take a new approach to their jobs. They had to taught how to identify mistakes early in the production process and correct them."
In the past, she said, "mistakes were caught at the end of the production process and a three or four day run would go down the drain."
Mr. Dietrich said the restructuring has resulted in quality improvement of between 20 percent and 30 percent.
As part of its continuing training, workers are organized into teams and charged with finding ways of doing their jobs better and faster. They are acquiring computer skills and lessons in operating new machinery. And they're being asked to accept more responsibility for their work and to realize that customer satisfaction is critical to the future of the company.
"It's been hectic," said Brenda Mitchell, a lead assembler who has been at the plant for 12 years. "Everybody's job has changed. There is a lot more emphasis on team work."
Under terms of the federal grant, Mr. Reich said the Towson plant is required to keep the 459 on the job for at least three years.
By coming to the aid of defense workers before they are laid off, Mr. Reich said, the government is reversing its past practice. "The government usually steps in after workers have been laid off.
"But we're taking a new approach. The goal is to provide workers with the training and skills needed for new jobs with the company" as it diversifies into new commercial markets.