BOEING PLANS TO CONSOLIDATE, BUT SPARE JOBS DEFENSE, SPACE TO MERGE.

Byline: Gregory J. Wilcox Staff Writer

Boeing Co., the world's largest airplane manufacturer, said Wednesday that it will combine space and communications operations with those of defense, government and intelligence into one unit.

The move will create Boeing Integrated Defense Systems, a $23 billion operation based in St. Louis and headed by Jim Albaugh, formerly president of Canoga Park-based Boeing Rocketdyne Propulsion & Power, the company's rocket engine building business.

No job cuts are planned, company officials said. The new unit will have 78,000 employees worldwide, more than double the number of workers at Boeing's commercial jet business.

The new unit will have operations across the country, including Southern California, where the space and communications division is headquartered in Seal Beach. Albaugh most recently led this unit.

During Albaugh's tenure, the business became a world leader in several key markets - including commercial and government communication satellites, airborne surveillance and reconnaissance, human space flight, and missile defense.

``Integrated military air, land, sea and space-based platforms is the direction modern defense systems are moving,'' Boeing Chairman and Chief Executive Officer Phil Condit said in a statement. ``The platforms our government customers are buying today will be more and more integrated in the future.''

Analyst Paul H. Nisbet at JSA Research Inc. in Newport, R.I., said that while the move is surprising, it makes sense.

``It is probably a good move on their part. They will end up being the largest aerospace company with the fewest product sectors,'' he said.

This realignment should help sharpen Boeing's internal and external communications, too.

``It strengthens the company and creates a better ability for the defense and space part of the business to integrate and exploit new opportunities,'' Nisbet said.

Few changes are expected at Rocketdyne, said company spokesman Dan Beck. ``We'll keep building rocket engines and growing the business, '' he said.

Boeing has been a major player this year in the defense field, winning contracts valued about $2 billion each to build the next-generation tactical radio system and combat system for the U.S. armed forces.