New York-based L3 Technologies, whose local plant is among Waco’s largest employers, took another step Thursday toward merging with Florida-based Harris Corp. to form what the companies say would be the sixth-largest defense contractor in the country.
L3 stockholders meeting in New York and Harris Corp. stockholders meeting in Melbourne, Florida, on Thursday overwhelmingly approved the proposed stock deal. The votes pave the way for U.S. Department of Justice and European Union consideration, and possible final approval by midyear.
L3’s local plant has been plagued with layoffs in recent years, a flurry of pink slips pushing staffing levels from about 1,600 to 750, according to estimates previously provided by local spokesman Lance Martin.
But a stock swap involving L3 and Harris could put Waco on a new team, L3 Harris Technologies, that would enjoy projected annual revenue of $16 billion and employ about 40,000 worldwide during an era of growth in the U.S. defense budget. About 57 percent of the combined company’s revenue would come from the U.S. military, including 26 percent from the Air Force, 13 percent from the Navy, 10 percent from the Army and 8 percent from other Department of Defense entities, according to a fact sheet the companies published.
The other 43 percent would come from a combination of other U.S. government agencies, foreign governments and commercial customers.
L3 Technologies modifies military aircraft in its 900,000-square-foot facility at the Texas State Technical College airport in Waco, also performing maintenance and upgrades on an array of conventional planes. A companywide shakeup last year put the Waco operation in a newly created Intelligence, Surveillance and Reconnaissance Systems unit, with headquarters in Plano, and new L3 CEO Christopher Kubasik said in an earnings call in 2017 that the company needed to win more work for Waco operations in its competitive bidding.
L3 officials have declined to speculate on employee numbers at specific sites, or whether the merger would create duplication and dictate staff reductions. Martin did not return calls seeking comment Thursday. L3’s national spokeswoman, Jennifer Barton, declined to comment on the merger beyond information the companies have already published or filed with the Securities and Exchange Commission.
Both companies’ next quarterly earnings reports will be May 1, Barton said.
“This vote represents a key milestone in our merger process,” Kubasik wrote in an L3 press release Thursday. “Overall, integration planning is proceeding well as we prepare to capture operational synergies and establish a shared culture of innovation.
“The increased scale of L3 Harris will allow us to deliver comprehensive mission-critical solutions to our customers, while creating value for all of our stakeholders.”
Harris Corp. Chairman and CEO William Brown wrote in the press release that he is “pleased that our shareholders voted in favor of this strategic combination, which will create a premier global defense technology company. … This merger will unlock additional growth opportunities.”
L3 Technologies, with several locations in Texas, including Waco, Plano and Greenville, reported 2018 sales of $10.2 billion. It specializes in products relating to pilot training, night vision, security at airports and weaponry.
Located in Melbourne, Florida, Harris supports government and commercial customers in more than 100 countries and enjoys about $6 billion in annual revenue, the companies reported.
Upon completion of the merger, Harris shareholders will own about 54 percent and L3 shareholders will own about 46 percent of the combined company, according to a presentation on the merger.
In voting Thursday, Harris stockholders controlling 102.08 million shares voted in favor of the merger, owners of almost 380,000 shares voted against it, and owners of about 150,000 shares abstained, according to an SEC filing.
For L3, owners of 64.53 million shares voted in favor of the merger, owners of 1.94 million shares voted against it, and owners of almost 310,000 shares abstained, according to L3’s SEC filing.
When the merger was announced in October, the combined company would have had a value of almost $34 billion, based on the companies’ stock prices, according to information published by the companies.
The driver of a tractor-trailer was killed in a fiery crash off 18th Street and Interstate 35 early Thursday morning, emergency responders said.
Authorities were called to the northbound I-35 access road, near a Cefco convenience store, at about 1:45 a.m. after an 18-wheeler drove through the grassy median and onto the access road.
Police reported the driver hit the Cefco sign and came to a stop near the gas pumps, leaking a small amount of diesel fuel.
Waco fire Battalion Chief Patrick Kerwin said the fuel caught fire, igniting the truck. The 18-wheeler was fully engulfed in flames when officers arrived, Waco police Sgt. W. Patrick Swanton said.
Emergency responders turned the gas pumps off by hitting the emergency shutoff valve. Kerwin said none of the gas pumps caught fire.
Fire crews worked quickly to extinguish the fire as hazardous materials crews were called to the crash.
First responders discovered that a body was in the cab of the truck, and firefighters worked several hours after the crash to extricate the driver.
Kerwin said authorities believe the truck was heading north on I-35, carrying several flat-screen TVs, when the driver traveled off the road for an unknown reason.
The driver’s identity was not available as of Thursday afternoon.
Police said the crash is under investigation.
There were no reports that any other motorists were hurt from the crash.
Lanes were closed at the intersection of 18th and the I-35 access road during cleanup efforts.
McLennan County Sheriff’s Office detectives raided a West Waco massage parlor Thursday after a weeklong investigation uncovered suspected commercial sex trafficking operations.
Authorities early Thursday raided the Rose Spa in Westrock Centre, 1201 N. Hewitt Drive, and executed a search warrant for the property.
The spa, an unlicensed massage establishment in the same shopping center as George’s Restaurant Bar & Catering, Little Land Play Gym & Pediatric Therapy and several other businesses, sat empty after the raid at 9 a.m.
“We rescued two Asian female trafficking victims out of there, who did not speak English well,” Sheriff Parnell McNamara said. “With the aid of UnBound and Mandarin interpreters, we were able to get them to a safe place at this point.”
UnBound is a Waco-based nonprofit dedicated to helping victims of human trafficking.
McNamara said authorities are in the early stages of the investigation and no arrests were made Thursday morning. Detective Joseph Scaramucci said the business has only been open for about a year.
“We are not going to tolerate this kind of activity and we are going to address it as soon as we are made aware of it,” McNamara said.
According to the search warrant, detectives got a tip March 26 about suspected illegal activity at Rose Spa. The tip indicated a client who was in the middle of a massage was offered sex acts for additional money.
After initial investigation, detectives believed at least two of the women were living at the business, Scaramucci said. Detectives witnessed two women leaving through the back exits, at one point collecting towels from a “makeshift” clothes line before they re-entered the business. At one point they noticed a car at the back door at about 4 a.m.
Two undercover officers entered the business March 27 and 28 and received massages. The warrant states both officers were offered sex acts for additional money, in one instance $40 for sex acts, but both offers were declined.
Undercover detectives recorded both massages, the warrant states. The woman giving the massage told the undercover officer she had been in Waco three months and had previously been elsewhere, according to the warrant.
Detectives seized items from the business, including electronic items that will likely undergo forensic analysis for evidence of human trafficking. Scaramucci said detectives collected evidence indicating the women were living at the business.
Detectives have made hundreds of arrests on various charges to combat human trafficking in recent years, including after several raids on local massage parlors. Authorities said victims of human trafficking have been rescued from massage parlors and proprietors of the establishments have been arrested on felony human trafficking offenses.
“You would think these kinds of businesses would learn their lessons, but they don’t,” McNamara said.
The sheriff said the investigation remains ongoing.
Jacob Reese ducked punches and bullets at Twin Peaks almost four years ago, but he dodged another bullet this week when all the remaining charges stemming from the biker brawl were dropped, a week before he was set to plead guilty.
The 33-year-old former Cossack had accepted an offer from McLennan County prosecutors that called for him to plead guilty to Class B misdemeanor rioting. In exchange for his plea, set for April 11 in 54th State District Court, the former Mount Pleasant resident was to have been given credit for the two months he spent in the county jail after the May 2015 shootout.
Neither Reese nor his attorney, Steve Keathley, of Corsicana, objected when they learned Tuesday that McLennan County District Attorney Barry Johnson was dismissing charges against the remaining 24 defendants, including Reese, from the Twin Peaks biker brawl.
“We had negotiated a plea bargain, but I think prevailing wisdom was that dismissing the cases was the just and right thing to do and I was informed that there was no necessity to plead,” Keathley said. “We were mighty tickled. My client was pretty fired up.”
Keathley and McLennan County First Assistant District Attorney Nelson Barnes have varying accounts of Reese’s minor involvement in the melee. However, both agree that dismissing the charges is the right thing to do.
Keathley said Reese was on the Twin Peaks patio when “there were some initial shots that beckoned him outside.”
“As it really started getting down, the video depicts another fellow coming up and engaging him with a swing, and they go down and it all goes downhill after that,” Keathley said. “I would have argued differently if we had gone to trial. I think there are a lot of ways to interpret the nuances of a person standing there and what necessarily was going on. I won’t comment on the specifics of the incident, but certainly self-defense jumped out at me. I think that was pretty plain.”
Barnes said he agrees that Reese’s “culpability was fairly light.” He said it appeared to him that Reese hit a rival biker on the shoulder with an unopened knife.
“We are doing the right thing,” Barnes said. “Barry decided to go in another direction with the cases, and it wouldn’t be right to go ahead with Mr. Reese’s plea deal when we knew we were going to dismiss the other cases. That’s just not how we are going to do business. He didn’t have a gun in his hand. He didn’t have an open knife in his hand. He hit somebody, and the plea agreement we reached was in line with what he did.”
Reese, a laborer, has since moved from Mount Pleasant and is trying to start his life again, Keathley said.
“He has basically tried to stay under the radar since all of this happened,” he said.
Reese was among the remaining 24 bikers with charges pending before Johnson decided to jettison the problematic cases he inherited from former McLennan County District Attorney Abel Reyna.
Reese, like 154 others, initially was indicted on first-degree felony criminal conspiracy charges. After Johnson defeated Reyna in the 2018 Republican primary, Reyna dismissed all but 24 of the cases, which he re-indicted on first-degree and second-degree felony rioting charges.
“We all know there are two sides to the story, and I am not trying to throw rocks at anybody,” Keathley said. “But from my perspective, I thought there was a pretty solid self-defense issue with my guy. The whole issue of individual culpability kind of got lost in this whole swirl of whether they were all there to do ill or whether they were just bystanders.
“Their presence somehow led to the theory that their mere presence fostered the commission of criminal activity, aka a gang, and that is what overshadowed any reasonable review of individual culpability. I think the DA hit the nail on the head when he said we need to put this nightmare to rest, and I think that was the just thing to do.”
Barnes said he also had plea negotiations with several other bikers and their attorneys but no one else besides Reese agreed to accept a deal.
The journey has come full circle for Brandon Cope, a former Riesel student who will become Riesel Independent School District superintendent after the school board named him the lone finalist for the position Tuesday.
Cope, 37, graduated from Riesel School, which serves seventh- through 12th-grade students. He is now principal of the secondary school, but will ascend to superintendent after waiting at least 21 days as required by state law.
A school board must name the finalist or finalists for superintendent at least 21 days before officially voting to employ the person, according to state law.
Current Superintendent Brian Garner will stay until the end of the school year, Cope said. He expects to move into the superintendent role in June.
Cope said his goal when he joined the district in 2015 was to become superintendent if the position ever became available. He has served as principal for the past three years.
“It’s an exciting opportunity for me, having graduated here, and it’s an honor to come back to serve the community,” he said. “We’ve got a great district out here. The biggest thing is to maintain the momentum and keep the good things going and continue to raise the bar. We’re trying to get a little bit better each day.”
Cope graduated from Baylor University in 2004 with a bachelor’s degree in religious studies. He started teaching in 2009 at Cesar Chavez Middle School in Waco. Cope then earned his master’s in education administration from Baylor. He also has served as assistant principal at Waco High School, principal at Crestview Elementary School and director of both the Greater Waco Advanced Health Care Academy and the Greater Waco Advanced Manufacturing Academy.
“My biggest goal is I always want kids to achieve their maximum potential,” Cope said. “We need to be able to give kids opportunities to reach their full potential in whatever they want to do. Kids need to be able to give their best at something and learn that mindset of hard work and doing what it takes to be successful. I want kids to be prepared for whatever life decision they make when they leave us.”
Riesel ISD has about 645 students in two schools: Foster Elementary and Riesel School. The city located southeast of Waco has a population of about 1,000.