AEROSPACE JOB CUTS; SKUNK WORKS WILL LOSE HUNDREDS.

Byline: Jim Skeen Staff Writer

PALMDALE - Just as the Antelope Valley aerospace employment picture was looking brighter, the Skunk Works announced Thursday that it will lose hundreds of jobs as part of a restructuring that will cut 2,800 workers throughout the Lockheed Martin corporation.

The bulk of the Lockheed Martin cuts - 2,500 jobs - will occur in the corporation's aeronautics business area: the Skunk Works in Palmdale, and companies in Fort Worth, Texas, and Marietta, Ga., which together will be formed into a new Lockheed Martin Aeronautics Co.

The exact number of jobs to be cut in Palmdale was not disclosed, but a company statement said the layoffs would come in approximately equal measures across the three states.

``We recognize this is going to be a challenging time for the new company and the Palmdale site,'' said Skunk Works spokesman Gary Grigg. ``The formation of the new company is going to allow the Skunk Works to focus on its core capabilities of developing new aeronautics systems in response to the nation's needs.''

Lockheed Martin officials in November disclosed that they were reviewing ways to improve the struggling defense giant's financial performance. A month earlier, the company sliced its earnings forecast for the next year by more than half. The company cited, in part, an industrywide lack of confidence inspired by contract delays, rocket launch failures and the loss of long-standing contracts.

The job cuts announced Thursday are expected to take 18 months to complete, with the bulk of the layoffs occurring this year.

They come in addition to previously announced Skunk Works cuts. The company's payroll has declined from 5,300 in January 1999 to 4,600 now.

In November, Skunk Works said it was planning to lay off workers in the coming months as the result of programs wrapping up and delays to the $1.3 billion X-33 program.

The X-33, an experimental aircraft designed to test technologies for a future spaceship, suffered a setback in November when damage was discovered to one of two liquid hydrogen tanks following a day of testing.

Larry Grooms, executive director of the Greater Antelope Valley Economic Alliance, said that while Thursday's news is bad, the revived Antelope Valley economy will keep it from being a devastating blow.

``There's so many other things going on that we're better able to weather this today than we would have two or three years ago,'' Grooms said.

Besides the cuts in the aeronautics jobs in Palmdale, Texas and Georgia, the corporation will pare 300 additional jobs in its space business area, but none in Southern California, a Lockheed Martin announcement said.

``The majority of the savings will be achieved in the Aeronautical Systems business area and will be realized by the streamlining of the management structures, the centralization of core administrative functions and consolidation of selected aeronautics activities in engineering, production and material management,'' the statement said.

The cuts are expected to generate $200 million in annual savings.

``These actions are the direct result of our continuing drive to improve our customer focus, flatten our management structure and enhance our financial performance,'' said Vance Coffman, chairman and chief executive officer of Lockheed Martin.

``They will result in real savings and ensure greater flexibility allowing us to successfully adapt to changing market conditions, maintain the level of program execution our customers expect, while improving our ability to react to new business opportunities,'' he said.

Under the restructuring, the Skunk Works will become part of the Lockheed Martin Aeronautics Co., which will be led by Dain Hancock, a Lockheed Martin corporate executive vice president.

In addition to the primary operating sites of Palmdale, Fort Worth and Marietta, the new company will include subassembly sites in Clarksburg, W.Va.; Johnstown, Pa.; Meridian, Miss.; and Pinellas, Fla.

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Photo: (color -- Ran Business Section only) Skunk Works in Palmdale will lose hundreds of jobs as part of Lockheed's plan to consolidate operations. (F117 Stealth fighter production line.)