Defense contractors ranking echoes declining business; TRW unit leads List as it actually increases contracts.

Los Angeles County's Pentagon research funds have been cut by almost 60 percent since 1987, according to this week's List of the 25 largest defense contractors in the county.

The List figures, based on research, development and testing contracts from the U.S. Department of Defense, show that among the 25 largest contractors, total local project grants have dropped from $3.2 billion in 1987 (the last time the Business Journal compiled this List) to $1.87 billion in 1992.

The latest figures indicate the county has been hit hard not only by declines in defense spending for weapons production, but also for research and development. Most industry analysts and experts have predicted that the county's research contracts would remain fairly stable.

The List, based on contracts to single company facilities, is topped by TRW Space & Electronics Group in Redondo Beach, a division of Cleveland, Ohio-based TRW Inc. TRW, according to The List, actually increased its Pentagon R&D contracts from just under $300 million in 1987 to $374 million last year.

In 1987, TRW was No. 4 on The List of the county's 25 largest defense contractors, which then was topped by Douglas Aircraft Co. in Long Beach with $865 million in Pentagon contracts for research, development and testing.

Last year, McDonnell Douglas Aerospace in Long Beach, an affiliated company of Douglas Aircraft, received $368 million in R&D contracts and placed No. 2 on the current List.

The third largest Pentagon R&D/testing facility both in 1987 and last year was Aerospace Corp. in El Segundo. It is tied to the nearby Los Angeles Air Force Base, a research facility.

Despite the cuts in overall military spending that have reduced overall Los Angeles County contracts from $11 billion in the late 1980s to about $6 billion in 1993, TRW continues to see a future in R&D.

"The military space budget so far has remained fairly constant and we anticipate it will continue to be stable. We're going to stay in military work and see a future there," said Susan Brough, a TRW spokeswoman.

The military R&D done in Los Angeles County has produced some of the country's most sophisticated and advanced weapons systems. Some of the nation's most advanced military aircraft have been developed in Los Angeles County.

Northrop Corp., for example, developed the B-2 stealth bomber at its Los Angeles County facilities (Nos. 6 and 24 on The List). The bomber is now being produced at Northrop's Pico Rivera facility.

At TRW, current projects include research into space-based missile detection systems and interceptors, and development of smaller military weapons systems.

A major part of any discussion of military R&D is the so-called "black budget" for secret projects. The List does not include R&D contracts for such secret work, which in many cases can be a significant figure and could radically change the List's rankings.

All of the major contractors have a certain amount of black budget work. One local company that is not included on The List but probably would be if secret contracts were revealed is Lockheed Corp.

The Calabasas-based company operates the famous Skunk Works research facility that recently moved from Burbank to Palmdale. Many defense industry experts said Lockheed is now involved in secretly developing a high-speed, high-altitude aircraft for the military.

The List also does not include production contracts, which until recently fueled a local industry that in 1990 employed close to 300,000 people. Today the industry employs about 200,000 and only two major production programs remain -- the B-2 and the C-17 cargo plane produced by Douglas Aircraft.