Aerospace nosedives into the post-Cold War as 15,000 jobs disappear in defense cutbacks.

Aerospace nosedives into the post-Cold War as 15,000 jobs disappear in defense cutbacks

Los Angeles County's largest manufacturing employer, aerospace, which averaged an estimated 260,700 workers during the year, nosedived into a 1990 tailspin with the gut-wrenching loss estimated at an average 15,000 jobs.

Local aerospace employment has been losing altitude since soaring to a high of 291,000 in July 1987 when the industry accounted for about 32 percent of the county's total manufacturing employment. But aerospace's 1990 loss here exceeded the combined total of the two preceding years' average declines - 1988's 7,900 and 1989's 5,400 - reported Jack Kyser, chief economist at the Los Angeles Area Chamber of Commerce.

Moreover, Kyser lamented, "the aerospace job decline here picked up momentum during the year." In fact, the '90 job loss cut aerospace's share to below 30 percent of total manufacturing employment in L.A. County - the first time in recent memory that has happened.

Among the big aerospace employers that cut employment here: Long Beach-based Douglas Aircraft Co., L.A.-based Hughes Aircraft Co., Beverly Hills-based Litton Industries Inc., Calabasas-based Lockheed Corp., Century City-based Northrop Corp., El Segundo-based Rockwell International Corp. and TRW Inc. with sizeable operations in Redondo Beach.

Of course, more than the prime contractors are affected by aerospace industry woes and cutbacks. Kyser referred to: 414 firms, 279 with fewer than 50 employees, in L.A. County producing electronic components and accessories; 220 firms, 143 small ones, manufacturing aircraft and parts; 31 firms, 18 small ones, manufacturing guided missiles and space vehicles; 68 firms, 41 small ones, making search and navigation equipment; 211 firms, 161 small ones, turning out measuring and controlling devices.

As mentioned, aerospace employment has been in a decline here since the July 1987 peak, as doves in Congress strove to cut Defense Department spending in favor of domestic social programs. Then came 1990, which sent aerospace employment into a steep nosedive here.

"The dominant event (in 1990 for the aerospace industry) clearly was the ending of the East-West confrontation," declared Wolfgang H. Demisch, director of equity research at New York-based UBS Securities Inc. "It's a different environment, and the United States will have to find its role in that environment."

Peace indeed did break out - at least between the Cold War's primary adversaries, the United States and the Soviet Union - agreed Lawrence M. Harris, senior aerospace analyst at Bateman Eichler, Hill Richards Inc. here. That softened demand for L.A.-area aerospace products.

On top of such woes came more whistleblowing lawsuits and awards against local contractors. Lockheed, for example, was stunned by an award against the company for more than $45.5 million in a whistleblower lawsuit filed by three former employees.

However, a number of other events also affected L.A.'s aerospace industry, Harris added:

* Douglas was rocked by a series of layoffs and reorganizations as top management of the company's St. Louis-based parent, McDonnell Douglas Corp., struggled to regain control of cost overruns in Long Beach. They included the C-17 transport under development for the Air Force and the MD-80 commercial jetliner.

Douglas late in the year did get initial certification and make the first delivery of the MD-11 commercial jetliner. But some analysts termed it a "warmed-over" DC-10 that looks more and more like a third-place finisher in a two-way race between Seattle's Boeing Co. and Europe's Airbus Industrie.

* Lockheed announced it was leaving Burbank, the long-time center of the company's aircraft production, and hereafter will produce virtually all of its planes in Georgia.

Lockheed is continuing limited production in L.A. County on a few remaining foreign orders for Lockheed's venerable P-3 antisubmarine patrol aircraft, and the company's famed Skunk Works appears to be working on some secret projects. But the Navy in '90 terminated Lockheed's contract for the cost-plagued P-7A, planned as a new long-range antisubmarine warfare aircraft.

Striving to remain an independent corporation, Lockheed earlier in 1990 won a costly proxy fight against Harold Simmons, a Dallas-based corporate raider. However, as the year waned, Simmons returned with a renewed offer to buy control of Lockheed, which the struggling company's management again rejected.

* Northrop and Lockheed each completed manufacture of two Advanced Tactical Fighter prototypes during 1990 and began test flights in the winner-take-all competition for the successor to McDonnell's F-15 Air Superiority Fighter. Those test flights were to be wrapped up by year-end '90 so the results could be submitted on schedule to the Air Force for its final selection, perhaps in 1991, between Lockheed's YF-22 and Northrop's YF-23.

If the production award is won by Lockheed, the company said it will manufacture the ATF in Georgia. If won by Northrop, that company presumably will produce the ATF in L.A. County.

Another major event occurred in '90 at Northrop when its long-time chairman, Thomas V. Jones, stepped down as chief executive officer and was succeeded by President Kent Kresa. Besides trying to win the ATF competition, one of his primary tasks has been to keep production rolling on the B-2 Advanced Technology (Stealth) Bomber despite intensified opposition from doves in Congress.

Northrop rolled out its second B-2 this year and began test flying it while making modifications on the first B-2, which began flying in July 1989. The controversial B-2 constitutes the majority of Northrop's sales, Harris remarked; so, continued government funding for the B-2 is critical for the company.

* Rockwell, which slashed its airplane employment several years ago here as the company neared the end of its contract to produce 100 B-1B bombers for the Air Force, continued manufacture of spare parts in 1990 but at a declining rate.

The company's major aerospace forte since the end of B-1B production has been in space projects - rocket engines by the Rocketdyne division in Canoga Park and assembly in Palmdale of another Space Shuttle. It will be the replacement for the Space Shuttle Challenger that exploded during its disastrous launch Jan. 28, 1986.

Striving to keep at least a toehold in manned aircraft, Rockwell in '90 rolled out and began test flying the X-31, an experimental fighter that is designed to have enhanced maneuverability by using thrust vectoring, Harris said. The X-31 is a joint project with MBB, a German company, he observed.

Also during '90 Rockwell was named the leader of the team (among other members are McDonnell Douglas, General Dynamics Corp. and Rocketdyne) that is working on the National Aero-Space Plane. It has been proposed as a long-range program to develop a demonstration model that will fly between L.A. and Tokyo in an hour.

PHOTO : Taking on passengers: The MD-11 commercial jet was one of the few bright spots in the aerospace industry

PHOTO : Cutting back: Lockheed plans a departure while Rockwell looks to space