The recent decision by Westinghouse Electric Corp. to trim 1,000 jobs from the work force at its Linthicum-based defense division may be a move to boost its attractiveness to a potential buyer, according to an analyst's 68-page report on the company.
Nicholas P. Heymann, who follows the company for NatWest Securities Corp. in New York, has consistently said in the past that Westinghouse was unlikely to divest its defense business to help pay for its acquisition of CBS Inc.
Now he's not so certain. "I'm hedging on that," Mr. Heymann said yesterday. "It's not a sure thing, but by no means is it an outside possibility."
He said the company's recent decision to cut the work force of its Electronic Systems division will cut costs by about $25 million a year and add about $250 million to the value of the division.
Even if the company retains its defense arm, Mr. Heymann said in the report, it is is likely to sell off the commercial businesses of Electronic Systems, with the exception of its air traffic control systems, to help pay for the CBS purchase.
The report estimated that the sale of Electronic Systems' interests in mail sorting equipment, home and industrial security and electric vehicles would bring $125 million to $150 million.
"He is reading too much into the situation," said Kit Newton, a spokesman for Westinghouse at its corporate headquarters in Pittsburgh.
"The layoffs have nothing to do with the acquisition of CBS."
Westinghouse has said that it will sell $1.5 billion to $2 billion in assets to help finance its purchase of CBS.
Mr. Newton said the company will not announce its asset sales until after the CBS purchase is completed next month.
In its report, NatWest said Electronic Systems' estimated $90 million purchase of Norden Systems Inc. boosted the local division's operating profits and sales this year.
"The acquisition has effectively added to Westinghouse's bottom line from day one," wrote Mr. Heymann.
Norden, based in Norwalk, Conn., was the defense electronics arm of United Technologies Inc.
The NatWest study estimated that Electronic Systems' sales would rise 13.5 percent this year to $2.8 billion.
It also forecast sales of $3.4 billion by 1997, which would top the company's high sales during the defense build-up years in the 1980s.
Operating profits are estimated to reach $220 million this year, up 16.7 percent from last year, and $310 million by 1997, according to the report.
Looking at the entire corporation, the NatWest study concluded that the purchase of CBS should benefit Westinghouse investors.
The report predicted that Westinghouse's stock would reach $20 to $22 a share within three to six months and reach $30 a share within the next two years.
Westinghouse closed at $14.375 yesterday, up 25 cents.