Loral Corp., a New York-based defense electronics company, has emerged as the leading candidate for Ford Aerospace and its Northern Virginia subsidiary, BDM International, according to sources close to the negotiations.
While sources said problems could develop during negotiations of the final sales agreement, they said that Ford Motor Co. had selected the bid by Loral over two competing groups for the space and defense division.
One of those groups included Westinghouse Electric Corp., the French aerospace group Aerospatiale and the Carlyle Group, a Washington investment firm where former defense secretary Frank Carlucci is a partner. If the proposal had been accepted, Carlucci was expected to be named chairman of the Ford Aerospace group, while Westinghouse was to assume the major management role.
The other bid came from a group that included Hughes Aircraft Co., owned by General Motors Corp., the French telecommunications firm Alcatel N.V. and Baltimore Orioles owner Eli Jacobs.
Industry sources said that both the Westinghouse and Hughes group had foreign partners, which would have required federal government approval of the deals.
Martin Marietta Corp. of Bethesda also bid for the command, control communications and intelligence sections of Ford Aerospace, sources said. Ford Aerospace said, however, that it was interested in selling the company in one piece.
A company spokesman said that a public announcement of a final deal is expected sometime next week.
Sources said that the winning bid would probably be more than $1 billion, although not all that figure is expected to be in cash. Bidders were asked to assume hundreds of millions of dollars in liability in retiree health benefits and debts related to commercial and foreign contracts.
Wall Street analysts had predicted that the cash received for Ford Aerospace will be lower than the $1.2 billion goal set by Ford's financial adviser, Goldman Sachs & Co., because of the declining defense budgets and prospects for growth.
Loral under Chairman Bernard L. Schwartz has been aggressive in expanding the company through acquisitions, including the purchase of Goodyear Aerospace in 1987 and of Fairchild Weston and Honeywell Inc.'s Electro-Optics division in 1989.
Loral had sales of $1.2 billion in 1989, compared with sales of $1.9 billion for Ford Aeropsace. Because Loral chose to bid without other partners, most defense industry experts said they expected the company to sell parts of Ford Aerospace to finance the deal -- in particular, BDM.
Loral manufactures radar and jamming systems for aircraft and ships, acoustic undersea systems for antisubmarine warfare, guidance and target recognition systems and ground missile support.
In December, Loral pleaded guilty in federal court to conspiracy in an attempt to rig two lucrative Pentagon contracts and agreed to pay almost $6 million in penalties. A few months later, defense consultant William Galvin admitted in federal court that he had paid an Air Force official to influence the outcome of a radar warning system contract sought by Loral.
In an apparent tactical move to win support from Ford Aerospace's 16,000 employees and senior management, Westinghouse issued a statement yesterday afternoon pledging not to dismantle any of the company's operations if its bid were accepted.
Ford received 16 different proposals during the first round of bidding, but most of those were for parts of Ford Aerospace, sources said.