Even while companies have announced out-of-state expansions, they have elected to make major investments in the state. Lockheed, for example, has just invested $100 million in new facilities for its Skunk Works operation in Palmdale that produces top-secret aircraft for the Air Force.
During the 1980s, Northrop invested $1.2 billion in facilities in Pico Rivera to produce the B-2 stealth bomber. Rockwell International is building the nation's most advanced hypersonic wind tunnel in Ventura County.
While Southern California is losing labor-intensive production in the aircraft industry, it is retaining very high-value production work in spacecraft and electronics. The infrastructure of hundreds of small shops that forge, cast, plate and heat-treat metal is a powerful magnet to industry.
And Southern California remains a center of technology and design. Although Lockheed will move its aircraft operation to Georgia, it will rely on a research facility in Rye Canyon near Valencia that employs 1,000 engineers and scientists.
Hughes Aircraft agonized two years ago whether to move its Missile Systems Group to Tucson, but finally decided that the scientists and engineers at the Canoga Park facility were too valuable a resource to attempt to move or re-create elsewhere.
The state has not had any defections of the six major producers of spacecraft. All manned spacecraft in current production or under development, for example, are being led by prime contractors in Southern California.
"Spacecraft are more of a white-collar product and aircraft are more of a blue-collar product," Paulson said, noting that the blue-collar work is leaving.
But the aerospace industry is facing a new business environment that is threatening California's dominance. As the Pentagon slashes its budgets, defense companies will face additional pressure to cut costs.
The companies leaving Southern California have varying reasons for doing so. In Lockheed's case, company officials say that consolidating excess space and reorganizing divisions will save $75 million annually. At the same time, however, they deny that lower wages in Marietta prompted their decision.
"Labor rates are slightly lower in Georgia," acknowledged Kenneth W. Cannestra, president of Lockheed Aeronautical Systems Co., the operation that is scheduled to leave Burbank and relocate in Georgia. "It is not significant. It was not one of the factors in the decision. The primary purpose is to consolidate what little work we have and get some efficiencies of scale."
And yet aerospace companies that have left Southern California seldom go anywhere but to lower-wage areas of the country, and quite often to the South.
In the 1980s, Hughes Aircraft set up small plants in Foley, Ala.; Jackson, Miss.; Orangeburg, S.C.; La Grange, Ga., and Eufaula, Ala. Northrop is setting up a missile plant in Perry, Ga. McDonnell Douglas went to Salt Lake City and Mesa, Ariz.
Times Staff Writer Dean Takahashi contributed to this report.
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