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Richard D. Ramirez, a Washington consultant, remembers vividly his first meeting at Wedtech Corp.'s headquarters on Gerard Avenue in the South Bronx. Not the best neighborhood. No posh offices. Principals of the company screaming with Spanish and Yiddish interjections.
"It was like 'Hill Street Blues,'" Mr. Ramirez recalls.
Like the cops on the Hill, Wedtech's diverse managers somehow have gotten the job done. And like the Hill, life never gets any easier.
The company has grown from $10 million in sales in 1981 (when it lost $1 million) to $110 million for 1985. It has become solidly profitable. And it has emerged as a widely praised defense contractor for creating hundreds of jobs in an area of inner-city blight.
But in the next few months, Wedtech will lose its eligibility to compete for Pentagon contracts set aside for minority-owned businesses -- contracts that provided about 95% of the company's revenue during the past two years. "They are going to have to be out there slugging it out with the regular competition," says Peter Gairing, an analyst with Raymond, James & Associates of St. Petersburg, Fla. "They won't be getting preferential treatment."
Wedtech officials acknowledge that graduation from the set-aside program is a significant turning point for the company, but they insist that it is a chance which will give it a better shot at winning big-ticket defense contracts rarely awarded to minority-owned businesses.
"The chances of getting these orders as a mainstream company are much better," says Fred Neuberger, vice chairman.
Concerns about Wedtech's ability to compete in the real world are reflected on Wall Street. When the company sold 1.8 million common shares at $10.13 last month to reduce bank debt, the stock promptly dropped to $9.75 from $10.88 in trading on the New York Stock Exchange.
Also worrying investors are slow progress payments on Pentagon contracts, the company's ability to manage rapid growth and chronic disorganization, its still high $80 million in long-term debt, upcoming labor talks, and disappointing results so far with a patented coating process.
But Wedtech watchers don't expect the...