Aerospace-defense cutbacks expected to continue.

Aerospace-defense cutbacks expected to continue

The recent string of job cuts at Southland aerospace and defense companies probably will continue well into next year, industry and economic researchers said.

They said employment could drop by more than 15,000 in the next 12 months, continuing the industry slide that began two years ago in the Los Angeles aerospace and defense industries.

"We expect the declines to continue well into the 1990s, despite what is happening in the Persian Gulf," said Brad Williams, an economist with the California Commission on State Finance, an economic research and forecasting agency of the state legislature.

The major aerospace and defense companies would not project specific employment levels over the next year. But those that responded to questions said they expect to continue to tighten operations.

"It depends on what programs we will be involved in in 1991 but we do continue to streamline our operations to operate the company in the most efficient manner," said Ron Owens, a spokesman for Century City-based Northrop Corp.

John Booth, a spokesman for the Space and Defense Sector of TRW Inc. in Redondo Beach, said, "We are not making any projections but we have also said that we expect continued declines, even though we are always on the lookout for people with certain skills."

For instance, he said, TRW is always looking for certain types of engineers and other highly skilled workers.

In recent weeks, both Northrop and TRW have eliminated jobs, either through attrition or layoffs.

In the case of Northrop, which has about 30,000 employees in Los Angeles County, the company closed a facility in Ventura County. Earlier this year, Northrop announced it was cutting its workforce by 3,000.

TRW acknowledged last month that it has eliminated about 1,600 jobs in its space and defense division nationwide this year, including about 950 in the Los Angeles area.

Other Los Angeles-area defense and aerospace companies that have recently acknowledged job cuts are Beverly Hills-based Litton Industries and rockwell International Corp., which is headquartered in El Segundo. The two companies together have eliminated about 750 jobs.

Richard Dore, a spokesman for Hughes Aircraft Co. in Los Angeles, which has about 32,000 workers in the county, said the company is not projecting employment levels because of the "fluidity" of the defense industry. "We just don't know. But right now we don't see the end of any major projects."

A year ago, Hughes eliminated 9,000 jobs.

The Los Angeles region has been hit hard in its aerospace, defense and high-technology sector. According to the Los Angeles Area Chamber of Commerce, employment fell from 423,500 in 1987 to 375,000 this year.

The California Employment Development Department said that in January, employment in the aerospace and high-technology sector of Los Angeles County was 270,300 and in October it was 254,500. In January 1989, employment was 277,600, said Jay horowitz, a research analyst in the labor market information division.

"Every quarter has shown a decline in the number of jobs. We don't make projections but I think you can say that, with peace with the Soviet Union and the budget deficit, there will continue to be a big push to reduce defense spending," said Horowitz.

McDonnell douglas Corp., which operates Douglas Aircraft in Lond Beach and is the largest military contractor in the country, in June announced it would eliminate 17,000 jobs, including about 9,000 in Southern California, as a $700 million cost-cutting measure. McDonnell douglas Space Systems Co. has placed a hiring freeze on its 2,000-employees workforce.

Officials from Douglas Aircraft, which employs more than 30,000 workers in Long Beach, did not return a phone call for comment on employment levels in 1991. Some Wall Street analysts, however, have recently begun speculating that McDonnell Douglas is heading for more serious financial problems.

Those problems include cost overruns on major fixed-price contracts, like the C-17 transport aircraft being built for the Air Force, and a growing debt load which, according to Aviation Week & Space Technology, is now $2.97 billion.

Adrian Sanchez, a regional economist for Security Pacific Bank in Los Angeles, is one researcher who predicted that Los Angeles County could lose in excess of 15,000 aerospace, defense and high-technology jobs next year.

"We made those projections a couple of months ago and we are standing by those numbers, even with the Persian Gulf situation. The situation there may have stabilized the industry somewhat but I don't think it's been a major boost. We still think the industry is going to continue to be flat and there will be continued job losses," he said.

Sanchez predicted there will be more cuts in the defense budget and that more military contracts probably will be awarded outside of Southern California.

"There seems to be a trend toward moving contracts to other places in the country. With (President) Reagan in office, there might have been a bias toward Southern California," he said.

The forecasters noted that as recently as five years ago, the defense and aerospace industries accounted for about 15 percent of Los Angeles' gross economic output. The industry now makes up between 8 percent and 9 percent of the county's economy and is expected to shrink further in the next year or two, the forecasters said.