Business as usual at United Defense

August 29, 1997

By LISA GRAYBEAL

Staff Writer, Chambersburg

CHAMBERSBURG, Pa. - The production division of United Defense at Letterkenny Army Depot will continue to operate as usual under its new owner, a Washington, D.C.-based investment firm, according to a United Defense spokesman.

"United Defense will continue to operate as United Defense," said Herb Muktarian, adding that the same management team will remain in place and the approximately 75 workers at the Chambersburg production plant will retain their jobs.

The Carlyle Group, an investment firm headed by former U.S. Defense Secretary Frank Carlucci, agreed Tuesday to buy United Defense for $850 million.

The division at Letterkenny manufactures M109A6 Paladin self-propelled howitzers, tank-type weapons used to fire projectiles at relatively high angles, Muktarian said.

"The direction we've been given is that we're going to stick with what we're doing, which is to put outstanding products out to our soldiers in the field," he said.

Letterkenny spokesman Alan Loessy said officials there are "comfortable" with the sale because it represents the best of government expertise combined with the best of private industry.

"Letterkenny has always been enthusiastic about the dynamic partnership we've had," he said.

United Defense was formed in 1994 by FMC, a Chicago-based manufacturer of heavy machinery, and Harsco, an industrial services and products company headquartered near Harrisburg, Pa.

The deal would put the joint venture of FMC Corp. and Harsco Corp. in the hands of Carlyle Group which has other holdings in the defense industry.

FMC owns 60 percent of United Defense and is managing general partner; Harsco owns the remaining 40 percent. The joint venture is based in Arlington, Va.

The sale is expected to close within 90 days.

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