Aerospace 'job shops' anxiously await decisions on key contracts.

The thousands of aerospace "job shops" in Los Angeles County are undoubtedly holding their collective breath as they await some key political decisions on government-related contracts.

Local job shops, which are the small companies that supply component parts to large aerospace subcontractors, such as McDonnell Douglas Corp., are busily lobbying Congress to continue funding for the C-17 and F-18 aircraft programs. The shops are also anxiously awaiting a decision by the Saudis on a large order of commercial jetliners and further decisions by Congress on the fate of the space station. Each of these decisions could translate to lucrative windfalls for local job shops.

The Air Force has said it wants 120 of the C-17s, a U.S. Air Force cargo plane, which would mean $40 billion in business for Douglas Aircraft Co. of Long Beach and the job shops that supply it. With current production of the F-18 winding down, subcontractors and job shops want Congress to fund two new versions of the aircraft, the F-18 E and F, through the end of the century. Northrop Corp. makes the tail section of the F-18, a fighter aircraft, in El Segundo and Hawthorne.

While the Saudis have expressed interest in buying a large order of commercial jetliners -- rumored at 60 to 80 -- they have yet to make any actual commitments.

Saudi King Fahd has told President Clinton he would purchase the jetliners from America, but he has not said how many or what kinds of jetliners would be purchased.

The $2.1 billion fiscal 1994 appropriation for the redesigned space station, which has been seen its total estimated budget cut by 40 to 50 percent, was approved by the Senate last week.

"Many of these programs are political hot potatoes," said Pat Scott, president of the L.A. chapter of the National Tooling & Machining Association. "Although we've been assured that much of the funding is going to happen, it hasn't been verified."

He said an estimated 2,500 to 3,000 job shops -- businesses with 50 or fewer employees -- are at stake over these decisions.

With the defense industry going through such a radical downsizing, however, these pending projects are expected to just keep many of the existing job shops afloat, said defense experts.

"Even with these programs, you're not going to avoid continued layoffs in Southern California," said Richard Bitzinger, an analyst for the Defense Budget Project, a nonprofit think tank in Washington, D.C. "These things will help cushion the blow."

He referred to the comments of the Deputy Secretary of Defense William J. Perry at a press conference earlier this month: "We have already lost hundreds of thousands of jobs and there are that many more ahead of us to lose," Perry said.

To put in perspective to what degree the defense spigot has been turned off, the United States was building about 80 F-18s a year during the late 1980s, Bitzinger said. Under pending funding decisions, he said, production would be cut in half, to somewhere around 36 or 48 a year.

As for commercial aircraft, McDonnell Douglas has gone through two very slow years. In 1992, the company had orders for 57 Md-80s -- the intermediate-size jetliner--and eight MD-11s -- the wide-body jumbo jet, said company spokesman John Thom. In 1993, orders have dropped to three MD-11s and four MD-80s, he said.

In a good year, he said, Douglas would have orders for a "couple hundred" planes.

Here's how the various defense projects are sizing up in Congress:

F-18

The F-18 is considered the single biggest military program in Southern California, said defense experts.

Northrop, which builds the fuselage for the fighter, has about 40 percent of the value of the contract, said Bitzinger.

The prospects for continued funding of the project look very good, according to those in the industry. Bitzinger said the F-18E and F-18F are the U.S. Navy's "plane of choice," and Congress has been pretty favorable to the project. He said the Navy has indicated it would like to purchase 1,000 of the F-18s. Although 1,000 planes is considered a high-end figure, Bitzinger said, 600 is probably more likely.

C-17

The future of the C-17, which is assembled at Douglas Aircraft's facility in Long Beach, is a bit more uncertain than the F-18, said industry experts. News of cost overruns and structural problems have further added to the plane's woes.

The Department of Defense, however, has made it clear that it needs a "modern flexible airlift," said Bitzinger.

"Their words really ring C-17," he said. "My feeling is that the C-17 iS probably going to be built."

Originally, the U.S. Air Force wanted to buy 210 C-17s, he said, but that order was scaled back to 120, which translates to roughly a $40 billion program.

Aerospace experts said the Air Force is likely to ultimately order anywhere from 30 to 80 C-17s.

Space station

This beleaguered program, which is intended to provide an orbiting platform to conduct research in a weightless environment, has gone through so many changes that subcontractors said they've been mainly mired in paper work with resubmitting bids.

NASA is cutting development costs from $25.1 billion to $16.5 billion and operating costs from $25 billion to $13.5 billion.

Although the exact impact of Boeing Co. being named as prime contractor is unclear, the overall perception is that it will definitely hurt L.A. County companies.

Boeing spokesman Elliot Pulham said most of Boeing's subcontracting will occur in the Southeast, close to its missiles & space division in Huntsville, Ala.

Under the current plan, Boeing holds $2.6 billion worth of contracts, Rockwell International Corp.'s Rocketdyne division in Canoga Park has $2.4 billion and McDonnell Douglas Corp. in Huntington Beach has $4.3 billion.

McDonnell Douglas spokesman Tom Williams said all he knows about McDonnell's current contract is that it's going to change.

"There's a lot of shaking going on and once the dust settles we'll have a significant role," he said. Compared to the C-17 and F-18, the space station is a relatively minor deal for area subcontractors, said industry experts.

Scott, of the machining and tooling trade group, said space work represents just 3 to 5 percent of the work at his company, NC Dynamics Inc. in North Long Beach.

His company, which has 40 employees, manufactures complex parts and tooling for the aerospace industry.