Diversification. Practically no other subject was as much a topic of discussion inside the board rooms of the nation's major defense-related companies during the latter half of 1980s and into the next decade.
1988 was a time of change for the Link Flight Simulation Division, which was a part of the Singer Company. By the end of the year the organization had been acquired by CAE Electronics and renamed CAE-Link.
The CAE-Link organization could trace its heritage back nearly 60 years and point to recent achievements including building the first AH-64 combat mission simulator, F-117A stealth fighter simulator and operating the C-130 Aircrew Training System.
At the same time, Hughes Aircraft Company's senior management was beginning to take a look at growing the defense electronics company by expanding into new markets. A new strategy that focused on acquiring key defense contractors became a strategy that the company would exercise when the timing was right.
The timing was right in May 1988 when Hughes Aircraft Company acquired Rediffusion Simulation Ltd., which included U.S.-based Rediffusion Simulation Incorporated, from BET for $283 million. Through this move, which represented more money than Hughes Aircraft Company had spent on all of its previous acquisitions combined since the 1930s, the diversified electronics company immediately became a major player in the training and simulation market.
Prior to the acquisition, Hughes Aircraft Company had designed and developed advanced training equipment, including F/A-18 weapons tactics trainers and F-14 mission trainers for the U.S. Navy. But, in the scope of things, up until the acquisition Hughes Aircraft Company had been considered a niche player in the training and simulation market.
In regard to the acquisition, Hughes Aircraft Company's Chairman and CEO Albert Wheelon was quoted as saying, "Hughes expects that simulators will be used increasingly by military customers to train pilots and operators as defense budgets flatten out." He went on to say that the "military simulator market will materially strengthen both organizations and make Hughes a major factor in the training field."
Wheelon's optimistic view was based on the fact that Rediffusion Simulation already had a strong share of the world's military training and simulation market. But Hughes Aircraft Company wanted an even larger share of the market.
To achieve this goal, the company chose to grow its training and simulation business by making yet another major acquisition as 1988 came to a close.
This time Hughes Aircraft Company acquired Honeywell Inc.'s Training and Control Systems Division, one of the country's leading providers of electronic simulation-based military training systems. The Honeywell organization was an industry leader in the supply of maintenance trainers, operator trainers and flight simulators to the military in addition to other types of training systems to major U.S. aerospace companies.
This new training and simulation powerhouse met with immediate success, capturing programs such as the U.S. Air Force's C-141 Aircrew Training System, UPS's DC-8 flight simulator, and winning visual system programs for NATO's E-3A AWACS flight simulator and U.S. Navy's S-3B weapons systems trainer.