Hughes to auction defence and aerospace divisions

Hughes Electronics, founded by the legendary eccentric Howard Hughes and now part of General Motors, may shed its heritage as America's one- time leader in defence innovation by auctioningits military systems and aerospace divisions for a price that could reach $8bn (pounds 5bn).

Such a sale would give fresh impetus to the consolidation process that has transformed the defence industry in the US since the end of the Cold War. Companies seen as the most likely bidders for the Hughes businesses include McDonnell Douglas, Northrop Grumman and Raytheon.

Michael Armstrong, chairman of Hughes, was reported yesterday to have decided to seek buyers for the units to allow his company to concentrate on its expanding telecommunications satellite division. The move would also fit GM's desire to prune its peripheral businesses and get back to its car-making roots. There was no comment yesterday from either Hughes or GM.

A possible obstacle to any large divestiture are the tax implications. Hughes could be persuaded to abandon any auction if the tax burden promised to be too heavy and could not be avoided by way of some tax-free stock transaction.

The loss of the defence and aerospace units would radically alter the character of Hughes, which was founded by Mr Hughes in a hangar in California before World War II. In the public mind it remains famous as the company that invented miracle military technologies ranging from the world's first laser to night-sight infra-red targeting systems. It also produced the landing modules for Nasa's moon programme. At its peak in the mid- 1980s, Hughes had a world-wide payroll of 82,000.

The company has recently had its shares of woes, however, culminating in its failure to land a contract with the Pentagon for a missile-satellite system that was won instead by Lockheed Martin. Its expansion in the satellite field was marked by its purchase of PanamSat for $3bn. Neither Boeing, which is overstretched meeting jet orders, nor Lockheed Martin are considered likely suitors.

Start your day with The Independent, sign up for daily news emails
News
peopleNational cycling charity CTC said he 'should have known better'
News
i100
Life and Style
The fashion retailers have said they will now not place any further orders for the slim mannequin
fashion
Arts and Entertainment
Ugne, 32, is a Lithuanian bodybuilder
tvThey include a Lithuanian bodybuilder who believes 'cake is a sin' and the Dalai Lama's personal photographer
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

The Green Recruitment Company: Graduate Energy Analyst

£20000 Per Annum: The Green Recruitment Company: Summary: The Green Recruitm...

Ashdown Group: Finance Accountant - Financial Services - Central London

£30000 - £35000 per annum + benefits : Ashdown Group: Finance Accountant - Fin...

Ashdown Group: Chief Technology Officer (CTO) - Glasgow

£90000 - £98000 per annum + benefits : Ashdown Group: A truly exciting opportu...

Day In a Page

Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash
I would never quit Labour, says Liz Kendall

I would never quit party, says Liz Kendall

Latest on the Labour leadership contest
Froome seals second Tour de France victory

Never mind Pinot, it’s bubbly for Froome

Second Tour de France victory all but sealed
Oh really? How the 'lowest form of wit' makes people brighter and more creative

The uses of sarcasm

'Lowest form of wit' actually makes people brighter and more creative
A magazine editor with no vanity, and lots of flair

No vanity, but lots of flair

A tribute to the magazine editor Ingrid Sischy
Foraging: How the British rediscovered their taste for chasing after wild food

In praise of foraging

How the British rediscovered their taste for wild food