Military contract at Norton Air Force Base creates 1,000 new jobs for Lockheed Corp.

Military contract at Norton Air Force Base creates 1,000 new jobs for Lockheed Corp.

Lockheed Corp. went against the grain of recent aerospace cutbacks last week by announcing it would add 1,000 new jobs to an aircraft-modification program at Norton Air Force Base in Riverside.

The Calabasas-based aerospace giant July 10 signed a three-year, $210,000 lease to maintain and modify commercial aircraft, primarily 747s, in a converted Air Force hangar. The deal could mean at least $150 million in new business for the $10-billion (1989 revenues) company during the next three years.

Lockheed's decision comes after several major Southland aerospace contractors, like Hughes Aircraft Co. and Northrop Corp., have announced plans to lay off thousands of workers because of shrinking military budget. In May, Lockheed itself announced it was relocating its Aeronautical Systems Co. from Burbank to Marietta, Ga., a move that will cost the Southland 4,500 jobs.

Ironically, the availability of the Norton facility was made possible by the Pentagon's belt tightening moves. Norton, located roughly 50 miles east of Los Angeles, is one of 86 military bases scheduled to be closed by 1994.

"We believe there is substantial new business in defense and we are well positioned for it, but we have also seen for some time that there are significant growth activities on the commercial modification and maintenance side," said Lockheed Corp. Vice President H.T. Bowling. "This lease recognizes that the demand for commercial maintenance exceeds the supply."

Lockheed signed the lease with the Inland Valley Development Agency, which is subleasing part of the Air Force facility to Lockheed's Ontario-based subsidiary, Lockheed Aircraft Service Co.

That subsidiary operates a Greenville, S.C. site that works on commercial aircraft, and is building a new facility in Arizona, but neither have the capacity to handle 747s. Lockheed's Norton operation will perform maintenance checks, passenger plane-to-freighter conversions and modification of aircraft interiors on 747s, DC-10s and L-1011s.

"This will provide Lockheed with a buffer against defense spending cuts but it won't provide a major percentage of their sales," said Lawrence Harris, an aerospace analyst with Bateman, Eichler, Hill and Richards. Harris noted that El Segundo-based Rockwell International is doing similar commercial work at its former B-1 Bomber plant in Palmdale.

In addition to the three-year commitment, Lockheed agreed to a 10-year, $20 million lease extension beginning in 1994, with an option for 40 more years. Lockheed's two-phased program, set to begin in December, will add 600 new workers to the Aircraft Service Co by 1991 and 400 more by 1994. Under the deal, Lockheed will occupy about half of the hangar until 1994 when the Air Force moves out. After that, Lockheed will lease the rest of the 192,000-square-foot facility.

Lockheed anticipates awarding a $10 million to $12 million hanger conversion contract in about two months. Part of contract is intended to bring the hangar's paint operations into compliance with stringent air quality rules. Like most defense contractors, Lockheed has been hammered by new edicts from the South Coast Air Quality Management District.

Bowling said the AQMD regulations, generally tougher in Los Angeles County than San Bernardino County, played no part in the decision to locate the modification site outside Los Angeles County.

"If it's possible to take advantage of military bases for commercial work, where we don't have to rebuild, it's ideal," Bowling said.

The Aircraft Services Co. is part of Lockheed's Technology Services Group, providing non-manufacturing work for airports, commercial aircraft and the National Aeronautics and Space Administration. It is considered Lockheed's fastest growing division, accounting for $1.4 billion in sales last year.