With more military cuts on the horizon, local defense contractors are offering no guarantees that they won't need to reduce employment further on top of the widespread reductions they have made since 1989.
A survey of the major aerospace and defense companies in the San Fernando, Conejo and Santa Clarita valleys and in Ventura County shows that most have slashed their work forces by at least 20% over the past two years.
The companies, whose local plants make or design everything from missiles (Hughes Aircraft Co.) to radar systems (ITT Corp.) to battlefield radios (Datron Systems Inc.), have cut employment by consolidating divisions, leaving vacant positions unfilled or by laying off workers outright.
The contractors hope that employment will now stabilize, particularly if they are able to land more commercial or foreign work. But the outlook could get worse this week, when President Bush unveils his proposed fiscal 1993 budget.
As the first defense spending plan to be proposed since the end of the Cold War, the budget is expected to include more substantial cutbacks in military outlays--which probably will mean more employment cutbacks by the contractors through the mid-1990s.
"We have to adjust employment on a continuing basis to the business environment, which is not positive at this time," said Robert Knapp, spokesman for Litton Industries Inc., which has facilities in Woodland Hills, Van Nuys and Agoura Hills.
Moreover, the Pentagon has proposed an initiative to freeze virtually all future defense programs after the research and engineering stage, avoiding production of the weapons until they are needed and thereby saving money. If enacted, the plan could remove the need for local defense companies to maintain large forces of skilled production workers.
And a new book released last week, "Building a Peace Economy," by Betty G. Lall and John Tepper Marlin, says California is among the 10 states that will be hit hardest as the defense downturn continues.
"The best we can hope for now is level employment" over the next year, said Rod Hanks, vice president of human resources at HR Textron, a Valencia-based unit of Textron Inc. that makes controls and other aircraft components. HR Textron's employment stands at about 1,000, down 20% from two years ago.
The cutbacks aren't unique to the local region, of course. Some big defense companies, such as Hughes Aircraft (a unit of General Motors Corp.), Litton, Northrop Corp. and Rockwell International Corp., have plants throughout Southern California and all have been forced to slim down.
But the San Fernando Valley and surrounding regions comprise one of the industry's largest centers, and so they, in particular, are reeling from the defense slowdown. And the effect is being felt by large and small suppliers alike.
Hydraulics International Inc., a Chatsworth builder of trucks, lifts and other aircraft support equipment, is "anticipating layoffs in the next year" once its 230 employees' current production begins to wind down, President Nicky Ghaemmaghami said. That's because "there's no new inquiries coming in for us to bid on," he said.
At ITT's Gilfillan radar equipment unit in Van Nuys, where employment has tumbled 44% over the past two years to 875, the outlook "is reasonably stable, assuming no further defense cuts that would impact our programs," spokesman Brian Eden said.
But Eden cautioned that "the Bush administration is still in the process of firming up their future defense budgets. That's an unknown." ITT Gilfillan's defense orders are down 30% to 40% from two years ago, he added.
In some cases, large defense operations have simply disappeared from the local scene.
Two years ago, Lockheed employed about 14,000 people in the area. But in a major restructuring, the company has shifted nearly all of its aerospace production lines that were in Burbank to its facilities in Marietta, Ga. The company still maintains its headquarters in Calabasas, and its famed advanced development unit--the top-secret "Skunk Works"--still employs about 5,000 in Burbank and Palmdale.
Northrop Corp. had one local operation, a missile plant in Newbury Park that employed 2,000 people. But Northrop closed the facility last year and transferred its work to plants in Hawthorne and Pico Rivera, eliminating 800 jobs in the process.
Some companies are hoping to offset part of the drop in defense spending with additional contracts from commercial customers or foreign clients, or with contracts to retrofit existing Pentagon equipment.
But it's unclear how much those contracts--if won--will boost local employment.