Defense industry gets reinvigorated.

The sleeping defense industry that once dominated L.A.'s economy is slowly awakening.

In Redondo Beach, Northrop Grumman Space Technology (formerly TRW Inc.) anticipates adding 400 workers to its 8,500-employee satellite and space laser making businesses.

In El Segundo and Palmdale, the number of Northrop Grumman Corp. employees making the center fuselage of the stealthy next-generation F-35 Joint Strike Fighter will double from 770 by the end of this year.

And at smaller shops like Gardena-based Brek Manufacturing Co., machine parts bring in $950,000 for each C-17 Globemaster III cargo plane manufactured by Boeing Co. Brek plans on adding eight workers to the 35 already making trap doors, floor planks and other parts.

After years of cutbacks, work on major defense programs such as the F/A-22 Raptor and the F-35 are bringing much-needed job growth to Southern California's aerospace industry. (Both have Lockheed Martin Corp. as their prime contractor.)

In Los Angeles County, an estimated 2,200 new aerospace jobs will be created this year, bringing the total to 108,600, according to the Los Angeles Economic Development Corp.

That's nowhere near the 1986 peak of 289,900 jobs. But it does mark the first year-to-year increase since 1996-1997.

"Aerospace-defense is back but in a different way," said Jack Kyser, chief economist with the Los Angeles County Economic Development Corp. "We've lost most of the assembly lines. But in terms of subcontract work and advanced research and development, we're still incredibly strong."

Industry shift

L.A. is no longer a hub for prime contract work on military aircraft. The C-17 and smaller Global Hawk unmanned aerial reconnaissance plane are the only two planes assembled here. The 13,000 workers that once toiled on Northrop's 21 B-2 Bombers in Palmdale has dwindled to 1,000 maintenance workers.

But after fighter jet programs by Lockheed Martin in Burbank and Rockwell International in El Segundo dried up, what remained were research facilities: Cal Tech, the Los Angeles Air Force Base, NASA's Jet Propulsion Laboratory. In Palmdale, Lockheed Martin's Skunk Works and Boeing's Phantom Works also were kept on.

The decade-long transformation into an R&D hub has shown dividends.

"It's hard to say somebody planned it," said Philip Coyle, a senior advisor for the Washington-based Center For Defense Information, a research and policy group. "It just evolved that way. It's the result of decades of investment in defense science and technology."

Since the Sept. 11, 2001 terrorist attacks, there's been a massive increase in defense spending -- $382.2 billion for the year ending in September 2003 vs. $328.9 in fiscal 2002.

For political reasons, defense program work is notorious for being spread out across the 50 states. But other factors have given Los Angeles an outsized share of the pie, offsetting losses on the commercial side of the business.

One factor is the presence of Northrop Grumman, the major defense player that's been winning significant roles in virtually every new defense program.

The other is an infrastructure that, despite lean times, never really went away.

"There's a unique aerospace manufacturing capability that exists here in the Southland and always has," said Gene Price, chief executive of Brek, which draws 70 percent of its $24.8 million in annual revenues from defense and aerospace work.

"Most of the service-related support services -- painting, parts processing, metal cutting, metal forming -- is here. If my company was in Nevada or Arizona, I'd have to come to L.A. because those types of services are not readily available there," Price said.

The Raptor will employ 250 L.A.-area subcontractors and suppliers, accounting for 65 percent of the plane's contents.

Plans call for 18 Raptors to be constructed this year, up from seven last year, while the first Joint Strike Fighter test model will begin production by the end of the year while systems engineering and design work is in full steam.

The Raptor's common integrated processor, a super computer that controls all the plane's functions, is under development at Raytheon Co.'s El Segundo unit under an overall $2.5 billion contract for what the Air Force estimates will buy 325 planes. (Company officials had no employment figures specific to the program.)

"That part of the country is home to the largest concentration of F/A-22 suppliers and it is where the largest percentage of F/A-22 funding is spent," said Greg Caires, a Lockheed spokesman. "The rich aerospace heritage around Los Angeles continues and is of significance to the F/A-22 program."

Another 1,500 Northrop employees in El Segundo are building the center and aft fuselage for Boeing Co.'s F/A-118 Super Hornet. The Navy has ordered production of 45 of the attack-jet fighters this year, up from 40 in 2002.

Space and maintenance

Northrop Grumman Space, the former TRW unit, is riding the crest of contract awards in the past two years worth billions of dollars to produce low-orbit satellites, airborne lasers and ground-based lasers for the nation's missile defense program.

Northrop is also developing a next-generation military satellite system and a weather satellite for NASA.

"We're continuing to hire strongly right now," said Jack Prichett, a Northrop spokesman.

Moderate gains are expected in the lesser known $3.1 billion airplane maintenance and repair sector -- at best, 500 positions on top of the 10,300 existing jobs, said David Myers, president of the Greater Antelope Valley Economic Alliance.

"It's not going to a huge increase," said Myers.

The Hawthorne-based Carlisle Group still makes parts for Boeing's 747 jet, for instance. But those parts are shipped to Seattle.

And Boeing's beleaguered 717 program, which began production in 1995, is too young to require heavy maintenance.

As far as production goes, the Long Beach plant scaled back deliveries from 24 per year to 12 amid massive layoffs of its entire commercial plane workforce following the terrorist attacks. At least 1,500 of 3,500 717 workers have already lost their jobs.

Asked if Boeing planned any more layoffs this year, Boeing spokesman Warren Lamb said, "I can only say that (the workforce) is going to be stable."

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RELATED ARTICLE: Big Tickets

Large defense programs aid local aerospace industry.

F/A-22 Raptor

Type: Attack-fighter (Air Force)

Prime Contractor: Lockheed Martin Corp.

Projected Orders: 325

Cost Per Plane: $99.7 million

Main Assembly: Marietta, Ga.

Local Subcontract Activity: Common integrated processors, Raytheon Co., El Segundo; environmental control systems, Honeywell Aerospace, Torrance

Local Employment Impact: NA

F-35 Joint Strike Fighter

Type: Next generation fighter jet (Air Force, Marines, Navy)

Prime Contractor: Lockheed Martin Corp.

Projected Orders: 3,000

Cost Per Plane: $37.3 to $48.3 million

Main Assembly: Fort Worth, Texas 

Local Subcontract Activity: Center fuselage, Northrop Grumman Corp., El Segundo and Palmdale

Local Employment Impact: 1500 (Northrop only)

C-17 Globemaster III

Type: Oversize cargo plane (Air Force)

Prime Contractor: Boeing Co.

Projected Orders: 180

Cost Per Plane: $198 million

Main Assembly: Long Beach

Local Subcontract Activity: Structural aircraft parts, Brek Manufacturing Co., Gardena

Local Employment Impact: 7,000 (Boeing only); 43 (Brek Manufacturing)

F/A-18 Super Hornet

Type: Attack-fighter jet (Navy)

Prime Contractor: Boeing Co.

Projected Orders: 548

Cost Per Plane: $48.5 million

Main Assembly: St. Louis

Local Subcontract Activity: Center and aft fuselage, Northrop Grumman Corp., El Segundo

Local Employment Impact: 1,500 (Northrop only)

Boeing Pushes Military Technology

Boeing Co., the No. 2 Pentagon contractor, will use contracts for the design of two Army warfare systems to showcase technology to other military branches that plan to rely more on computer integration.

Boeing merged its space and military businesses last year.

The strategy won it the job of devising the Future Combat System, a U.S. Army program to design new tanks and troop carriers and to integrate them with robotic ground vehicles and unmanned spy planes in a centralized-command computer network.

The Defense Department plans to spend $239 billion through 2009 to make its forces swifter and more lethal, and communicate more easily. Boeing's management of the Future Combat System and the ground-based part of a missile-defense system will help it win orders from other military branches, said Senior Vice President Roger Krone.

"The other services are still in the formulation phase," said Krone, who heads Boeing's work for army systems. "They are watching the Army to see how it goes, and what benefits the Army has obtained."

The Future Combat System has a potential total value of $23 billion, and Boeing's 1998 missile-defense award could be worth as much as $55 billion. The Pentagon's investment in bringing its fighting forces into a high-tech realm comes as Boeing, the world's largest maker of jetliners, begins to rely more on defense contracts for sales.

Sales in Boeing's Integrated Defense Systems unit, the product of the merged space and military businesses, rose 9.4 percent in 2002 to $25 billion while revenue from selling planes fell 20 percent to $28 billion. Total sales last year were $54 billion.

"Right now their military division is doing well while the commercial airline business is in a decline," said Brian Eisenbarth, fund manager at Davidson Investment Advisors, which has 225,000 Boeing shares. "The commercial drag will stop this year and the military business will provide more sales and earnings."

The Pentagon is seeking $1.7 billion in the fiscal 2004 federal budget for the Future Combat System, Krone said. Boeing and its partner in designing the program, San Diego-based Science Applications International Corp., expect to perform work valued at 30 percent of that amount and to hire subcontractors for the rest, he said.

Boeing Chief Executive Phil Condit's push into defense contracting has included more than $25 billion in acquisitions since 1996, notably the purchase of McDonnell Douglas Corp. in 1997. Boeing's military-related sales will increase by 10 percent to 15 percent in the next three to five years, Eisenbarth said.

Boeing's rival defense contractors, including Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co., are on the same path: Designing integrated-electronics and data systems that do half the fighting for the military.

Los Angeles-based Northrop is counting on "transformation" work involving technology enhancements to help increase sales by more than 10 percent through 2006, said Chief Executive Kent Kresa.

"We have focused on this whole issue of transformation -- on surveillance, precision strike, information warfare, cyber war, all those things that are important," Kresa said. "We're looking at double-digit (percentage) growth because of programs we're involved in today and new programs that are coming along."