The aerospace business in northern Utah will be on its own again after a seven year stint as part of a salt and chemical company.
Next July it will be back to Thiokol Corp. for the Ogden-based aerospace firm, following an announcement Monday that Morton Thiokol Inc. will spin off the aerospace company it acquired in 1982.The move creates Morton International Inc., a salt, chemicals and airbag manufacturer. And the aerospace company will return to independent Thiokol Corp., the status and name it held before it was acquired by Chicago-based Morton-Norwich.
The new Morton International will maintain a presence in Utah. The company will keep its longtime salt manufacturing facility at the Great Salt Lake and an Ogden plant where it employs about 350 people manufacturing inflatable airbags for automobiles.
The plan to split the chemical and aerospace operations is expected to be finalized July 1 pending shareholders' approval and a ruling by the Internal Revenue Service that the transaction will be tax-free to Morton Thiokol and its shareholders.
Under the plan, stockholders will receive a share of Morton International and a share of Thiokol Corp. for each share of Morton Thiokol.
Wall Street appeared optimistic about the plan. Morton Thiokol rose $3.50 to $43.50 in late-morning trading Tuesday on the New York Stock Exchange.
Analysts praised the company's move to unload the aerospace operation, which became a drag on corporate earnings.
"People bought Morton Thiokol stock because of the chemical business not aerospace," said James Spencer of Kidder Peabody & Co.
The space shuttle Challenger disaster, where solid rocket boosters manufactured at Thiokol's plant in Tremonton caused the craft to explode after takeoff in January 1986, cast Morton Thiokol in an unfavorable light.
But, Morton Thiokol's aerospace group believes the move will be good for its side of the business too.
"We will miss their (Morton International's) management expertise, but we will be able to devote all of our attention to the aerospace business," said Ed Garrison, president of the aerospace group in Ogden.
Garrison will stay on as president and chief operating officer of Thiokol Corp. He said Morton Thiokol officials in Chicago will begin searching for a chairman and chief executive officer soon.
"We should have one in place before the transaction is completed in July."
Garrison said the aerospace operation is healthy with a 40 percent share of the solid rocket propulsion market. He noted the company is negotiating a $2 billion contract to continue supplying solid rocket boosters for the shuttle program into 1996.
"Sales are expected to be more than $1 billion for 1989," Garrison said. "We will wind up with a very strong company."
He said employment should remain at 7,500 at operations in Tremonton and Ogden, where Thiokol located in 1957.