Hughes Electronics Corp.

P> Total Contracts $316,305,000

Corporate Headquarters: Los Angeles, Calif.


Michael T. Smith, chairman of Hughes Aircraft Co., didn't like being king of the niches. So last December he gambled on Magnavox Electronics Systems Co. to change that reputation.

Hughes Aircraft, a subsidiary of Hughes Electronics Corp., purchased Magnavox Electronic Systems Co. of Fort Wayne, Ind., for $370 million in cash. Magnavox, a leader in military tactical communications, electronic warfare, command and control systems, electro-optics and anti-submarine warfare, reports to Hughes Aircraft, the manufacturer of missiles, airborne and ground-based radar, electro-optical systems and shipboard displays.

Magnavox has about 3,000 employees and reported 1994 revenues of about $400 million. "This acquisition will enhance our leadership in military communications. The combination of technologies and manufacturing processes of the two companies should also result in an expanded array of capabilities that Hughes Aircraft will be able to offer to its customers," Smith said.

With the Magnavox acquisition, Hughes can cover the full spectrum of the radar business, not just the aviation radar niche, he pointed out.

In another move to improve customer offerings, Hughes Aircraft Co.'s information systems operations were realigned Jan. 1 this year into Hughes Information Technology Systems. This new umbrella organization combines the business operations of Hughes Information Technology Corp., with primary locations in Reston, Va., Denver and Los Angeles, with Command and Control Systems and Aviation Management Systems units located in Fullerton, Calif., and Hughes Aircraft of Canada.

Hughes Information Technology Systems focuses on large-scale, software-dependent systems developed and installed primarily for U.S. and foreign government agencies, including the U.S. Department of Defense, the National Aeronautics and Space Administration, the Department of Transportation, the Federal Aviation Administration and the National Weather Service.

Primary product lines include large-scale government database systems, military air defense systems, civilian and military air traffic control systems and military command and control systems. The new conglomerate has some 4,000 employees and annual revenues of about $800 million. Its parent, Hughes Information Systems, has approximately 13,000 employees and $2 billion in annual revenues.

A global company with 79,000 employees, the parent company Hughes Electronics is a world leader in the design, manufacture and marketing of advanced electronic systems. Since 1985, it has been a wholly owned subsidiary of General Motors Corp.

Hughes Electronics consists of Delco Electronics Corp., Hughes Aircraft Co., Hughes Telecommunications and Space Co., Hughes Network Systems Inc. and DirecTV Inc. Product lines include airborne radar, tactical missiles, ground and naval systems, infrared equipment, lasers, and training, simulation and information systems.

Government sales are expected to further increase with Hughes Electronics' February 1996 purchase of Itek Optical Systems of Lexington, Mass., a manufacturer of precision optics and electro-optical systems for various government markets. Itek had revenues of $51 million in its fiscal year ending July 31, 1995. Itek will report to Hughes Danbury Optical Systems Inc. of Danbury, Conn.

Hughes Danbury provides sophisticated electro-optical systems and components for scientific and military programs. "This acquisition merges technologies, processes and talents to form a stronger company better serving our customer's needs," said John Weaver, president of Hughes Aircraft Co. "Electro-optics is a key technology for a broad range of Hughes initiatives."

Long known for providing information, space and weapons systems to the federal government, Hughes has expanded into satellite-based communications systems for the general public since 1994. In fact, increased sales of telecommunications and space segment products and services helped spur a 4.8 percent increase in revenues for Hughes Electronics in 1995.

Continued expansion into private business network sales, combined with the continuing success of DirecTV, satellites, satellite transponders and cellular communications equipment brought in revenues of $14.7 billion last year, up from $14 billion in 1994. Fourth quarter receipts surged 11.2 percent to $4 billion, up from $3.6 billion.

Its DirecTV is America's leading high-power, direct broadcast satellite service, with more than 1.25 million subscribers. In 18 months, DirecTV has become the fastest growing video entertainment service in the world. Its success has prompted release of DirecPC, a satellite-linked, worldwide, PC digital delivery service.

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