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P> Unisys Attracts Buyers of Defense Unit

Unisys Corp. has agreed to sell its defense business to Loral Corp. for $862 million. Unisys officials expect to complete the sale by Sept. 30. Industry sources said Unisys Chairman James Unruh desperately wanted to close the sale by next month's stockholders meeting.

WT reported in January that the Blue Bell, Pa., company dogged by declining revenues in its defense sector wanted to find a buyer for the units that formed Unisys' old Paramax Defense Systems group. Loral edged out Hughes Electronics Corp. and Raytheon Co.

The sale will include the electronic systems group in Eagan, Minn., the systems development division in Great Neck, N.Y., the secure communications operation in Salt Lake City, Utah, and the Canadian electronics organization in Montreal. Loral also will buy some of Unisys' non-defense outfits, including those that focus on postal, weather and air traffic control systems. The operations being sold employ about 8,500 and made about $1.4 billion in 1994.

Unruh said the sale will allow Unisys to focus on its transformation from a hardware manufacturer to an information technology service provider. Information services represents the only bright spot in the company's otherwise declining revenues. The Unisys Worldwide Information Services group generated almost $2 billion in 1994, up from $1.6 billion the year before. Unisys's total 1994 revenues decreased from $7.7 billion in 1993 to $7.4 billion last year.

Bear, Stearns & Co. Inc. and James D. Wolfensohn Inc. are handling the sale. Industry observers suspect that after the sale is completed, Loral will break up the units and sell some of them individually, giving losing bidders Hughes and Raytheon and other potential bidders such as Lockheed Martin new acquisition opportunities.

DoD Pulls a Slick Willy

The Defense Information Systems Agency last month released its latest strategy to build the Pentagon's key telecom and data network. Depending on what constitutes a formal strategy, the document represents the agency's third, fourth or fifth plan for the network in the last several years.

Once again, the agency misses the mark in its latest attempt to clarify questions from industry and leaves a fundamental question unanswered. How will it replace the existing command and control network created by AT&T? After all, the company's contract expires next year.

Frustration continues to grow at telecom and infotech companies that want a piece of what once was a $1 billion pie. The strategy now still does not indicate how much the agency will spend to build its next-generation network, but industry officials know the pie won't be as big.

Security, Encryption Suits Filed

The Washington-based Electronic Privacy Information Center has asked the courts to force the release of documents prepared by the White House's Security Policy Board.

The board is quietly drafting policy for the security of the government's classified and unclassified information (WT, Feb. 23). "Secrecy and classified directives will take us the wrong direction on the information highway," according to a statement released by EPIC. Also, the Washington-based branch of another electronic-privacy group, the Electronic Frontier Foundation, recently petitioned the courts to outlaw controls on encryption technology as a violation of the Constitution's freedom of speech provisions.

Orbital's Future Flying High

Dulles, Va.-based Orbital Sciences Corp. cancelled the launch of its first satellite to provide two-way data communications from space on March 17 from the Vandenberg Air Force Base in California (WT Feb. 23).

The launch was cancelled 20 minutes prior to release of the launch vehicle from its carrier aircraft because the launch vehicle experienced an apparent loss of some of its thermal protection system material. TPS is needed to protect satellites from the intense heat experienced during flight through the Earth's atmosphere. The launch will be rescheduled after the problems are corrected.

NewtWatch Goes Online

C-SPAN has been converted into Newt TV, so it's only natural that hyperkinetic House Speaker Newt Gingrich now has an Internet Web page.

However, the NewtWatch Web page was created by critics of His Newtness, and is devoted solely to tracking his voting record, his speeches, his income from PAC contributions and the ethics charges made against him. In return, NewtWatch solicits contributions to support anti-Newt activists.

With any luck, NewtWatch will escalate into a fad, ensuring that everyone who's anyone gets their own Web page and 15K of dedicated bandwidth.

Cyberspace Banking

The nation's 10th largest bank, First Union Corp., has begun marketing its financial services over the Internet. But because of security concerns, Charlotte, N.C.-based First Union won't allow customers to transfer funds via the Net. When that security problem is reduced, expect many more of the 10,600 banks in the $3.9 trillion industry to follow First Union into the Net.

Defense Job Losses Will Accelerate

Here's a tip for defense-industry people: jump ship! The industry has lost 1.1 million jobs since 1987, and will lose another 700,000 jobs in the next three years, according to Labor Department projections.

Feds Fish For Multimedia

Federal pursuit of multimedia technology will rise sharply over the next five years, according to a study completed by Computer Marketing Associates Inc., a market research firm based in McLean, Va. Already, 28 agencies and departments have multimedia programs in the works, said the study. Perhaps wisely, the study does not forecast spending levels for multimedia programs.

Gang Of Four

Four hackers were charged in Nassau County, N.Y., with stealing credit card numbers and using them to mail-order more than $100,000 worth of stereos, sneakers, coins and video recorders. Local police declined to say how the hackers operated or how they were caught.

Intelligence oversight

A secret directive signed by President Bill Clinton creates a new intelligence oversight board to guide agency priorities and gauge performance.

Intelligence reorganization

Pennsylvania's Sen. Arlen Specter, right, chairman of the Senate Select Committee on Intelligence, says he favors creating a new czar to run the intelligence agencies, which cost the nation $28 billion a year. To create the post, he'll need approval of the House, which has an intelligence committee already drawing up reorganization plans. The first czar would likely be John Deutch, left, who is now nominated for the jobs of CIA chief and Director of National Intelligence.

QUOTE

UNQUOTE

"All we are is a buffet. We're laid right out there for the taking."

--Walker Smith of the consulting firm Federal Procurement Inc. in Great Falls, Va., assessing big infotech companies' opinion of subcontractors.

Annual shipment growth in PCs and semiconductors: 1987 to 1995

The personal communications business will quadruple over the next ten years, says a forecast by the Personal Communication Industry Association. New PCS technologies will get one fith of the growing market, while pagers will keep their half-share of the market.

Except for the recession year of 1990, shipments of semiconductors and PCs have grown rapidly, with semiconductors clocking 30 percent growth rates in 1993 and 1994.


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