Boeing acquisition should boost prospects at Douglas, Rockwell.

The major news coming out of L.A.'s aerospace world in 1997 likely will be dominated by Boeing Co.'s pending $14 billion acquisition of McDonnell Douglas Corp.

Although such massive acquisitions typically result in layoffs, a booming commercial aircraft market could defer cuts, at least for awhile, or could even bring new jobs.

But more than that, it signals a milestone in the industry's ongoing consolidation.

Boeing officials have not ruled out layoffs at the post-merged Company, which would surpass Europe's Airbus Industrie as the world's largest maker of commercial aircraft.

But overall, assembly lines at Long Beach-based Douglas Aircraft Co., a unit of McDonnell Douglas, are expected to get a boost from Boeing, which has had problems keeping up with commercial aircraft demand.

The defense and space units that Boeing recently bought from Seal Beach-based Rockwell International Corp. for $3 billion are also expected to do well.

Industrywide, consolidation and down-sizing are likely to continue, particularly within L.A.'s sprawling world of subcontractors.

In that arena, smaller subcontractors are expected to either drop out of sight or be acquired, as major contractors such as Boeing reduce the number of companies they buy from.

Not all the action will be centered with Boeing-McDonnell Douglas. Another key local player is Lockheed Martin Corp.

After a series of major victories in 1996 - winning the contract to build a prototype for the next-generation space shuttle, and becoming a finalist to build the Joint Strike Fighter and to develop low-cost rockets for the Pentagon - Lockheed faces criticism from within the industry for having its hands in too many pots.

The local outlook for Northrop Grumman Corp. and Hughes Electronics Corp. is dependent on whether Northrop purchases Hughes' defense and aerospace divisions.

The Wall Street Journal recently reported that Hughes is looking to sell off those two units, and that Northrop is one of three potential bidders, along with Raytheon Co. and McDonnell Douglas.

With McDonnell out of the running due to its pending deal with Boeing, and with Northrop looking to establish itself as the No. 3 aerospace company after Boeing-McDonnell and Lockheed Martin, Northrop appears a likely candidate to acquire the Hughes divisions.

While the L.A. aerospace industry will not see a return of its Cold War days, the Boeing-McDonnell merger, along with increased demand for commercial aircraft, suggest that the local market is likely to turn the corner from its slump of the last few years.