Defense subcontractors search out work in other areas, including commercial aviation.

Defense subcontractors search out work in other areas, including commercial aviation

Facing government spending cutbacks and defense-related projects moving out of the state, San Fernando Valley aerospace/ defense subcontractors are searching out work for other industries, including increasing subcontract jobs in commercial aerospace.

New business in defense-oriented aerospace subcontracting, according to managers and owners of these shops, has been sluggish for those who supply and make parts for aerospace companies across the Southland. Customers include Hughes Aircraft Co. in Los Angeles, Calabasas-based Lockheed Corp., McDonnell-Douglas Corp. in St. Louis (which manufactures the C-17 for the Air Force in its Douglas Aircraft facility in Long Beach), Century City-based Northrop Corp. and Rockwell International in El Segundo.

"As far as getting new orders and so forth, it (the military aerospace subcontracting industry) really has slowed down," said Brad Hart, president of the San Fernando Valley chapter of the National Tooling & Machining Association, an organization whose membership includes many subcontractors.

However, there are no exact figures on how much business has dropped off over in recent years as the government has reduced spending on defense weapons, and as projects like the Advanced Tactical Fighter - which Lockheed announced earlier this year will be manufactured in Georgia - have moved away from California.

Jim Ashworth, vice president of Eagle Precision Industries Inc., a Van Nuys-based tool and die making company, stated the obvious scenario: Reduced international tensions means reduced government demand for defense products. "No wars," he said, "we need wars."

The Persian Gulf War was no help either, according to spokesman Robert Knapp of Litton Industries Inc. in Beverly Hills.

Litton Guidance and Control Systems in Woodland Hills and Litton Data Systems in Van Nuys, both prime and subcontractor divisions of Litton Industries, did not post any increase in orders as a result of the war, said Knapp. As newspapers chronicled, the war largely was fought "out of inventory" as the military used weapons that had been stockpiled.

News, too, is gloomy on the home front, with California losing projects to other states.

"California (is) really tough on the platters," said the tooling association's Hart. "Workers (compensation) is so expensive here, taxes are so high. Other states are just (better) organized."

Hart, who is also a manager at Northridge-based Roberts Tool Co., a precision components manufacturer, said California has to be a competitive alternative to Georgia, Utah and Missouri.

Sharpening the stakes in the interstate rivalry is the fact that the total military aerospace pie is dwindling.

"As far as (military) aerospace, I'd say it's about 70 percent of what it was" three years ago, said Chris Ingram, operations manager with J.M. Precision Inc. in Chatsworth, which makes and supplies precision parts to major aerospace companies.

And Mark Maki, vice president of N C Dimensioning Inc. in Chatsworth, said parts-making for military aerospace projects has dropped to 25 percent of the firm's business from 75 percent five years ago.

Similarly, Henry Smith, president of Canoga Park-based Quest Engineering & Design, said his company has reduced making tools for defense-oriented aerospace companies from 30 percent to 15 percent of its total business. Now, 85 percent of the engineering and design company's business comes from making hardware for computers.

Manufacturing computer hardware "maintained quite well" during recent tough economic times, Smith said.

Quest is not alone in moving away from doing jobs for defense-oriented aerospace companies. Other subcontractors are manufacturing tools and parts for other industries in order to survive.

"We've been getting into automotive. . . . It's holding up a lot better than aerospace," said Ingram, adding that J.M. Precision now mostly manufactures hydraulics for cars.

Tom Munday, president of North Hollywood-based Superior Threadrolling, said his company hasn't strayed from the aerospace industry entirely. Rather, he said, it's tilting a bit more toward related business.

"Most of our work is now commercial," supplying tools and parts to aerospace companies that make commercial airliners, Munday said. Superior has adjusted its workload balance to 80 percent commercial aerospace subcontracting and 20 percent military aerospace, compared to a 60-40 split in the past.

But everyone else in aerospace subcontracting is trying to do the same thing.

"Yeah, I expect to see some more competition," said Munday.

But the fact is, subcontractors don't have any choice but to weigh into the rivalry for commercial work.

"We better (diversify) or we'll be out looking for a job too," said Eagle Precision's Ashworth.

PHOTO : Change: Military contractors see work in commercial aviation