The machines at True Form Industries, a Cerritos aircraft parts manufacturer, are running full time these days, and the company is preparing to add seven workers to its crew of 63.
Amid an aerospace bust, with subcontractors dropping dead every week, True Form and a few dozen similar shops stand in sharp contrast: They expect a surge in orders.
The influx of business is coming from Northrop and other large aerospace contractors that are closing down their internal machine shops and subcontracting work to lower-cost small companies.
Northrop estimates that about 90% of its parts production--or roughly $35 million annually--will remain in Southern California. Others, such as McDonnell Douglas, are also shutting down their machine shops and sending work to smaller contractors.
These new subcontracts won't reverse the misfortune of the machining industry, which is going through a difficult contraction. But while the shutdowns at Northrop and McDonnell will result in layoffs at the big aircraft firms, the subcontracts are casting a safety net for one segment of Southern California's manufacturing infrastructure.
"We think we can make it in Southern California," said True Form Vice President Mike Janisch. "It is still the major aerospace area in the nation and will be for quite a while."
The survival of the region's machine shops--which represent the largest concentration of industrial machining in the United States--is critical to maintaining Los Angeles as an integrated and robust aerospace center, according to consultants, industry executives and government officials.
Eventually, machine shops could also be a foundation for other manufacturing--ranging from mass-transit rail cars to electrical vehicles--that may partly replace the aerospace industry that is collapsing in Southern California, the experts say.
Although crime and high costs have badly tarnished the region's appeal, a diverse network of suppliers remains a real strength in retaining big industry, according to John Harbison, head of the aerospace practice at consultant Booz Allen & Hamilton.
"Having a vendor a few blocks away rather than a thousand miles away will be increasingly important," Harbison said. "The whole trend in aerospace is to reduce the cycle time of turning out products."
Job shops, as the firms are widely known, often are not much more than oversized garages run by men and a few women who dream of being industrialists. With a small down payment on a $150,000 computerized machining center, an experienced machinist can go into business. Many small shops are linked by computer with their prime contractors, exchanging production data continuously.
A single job shop also helps support a huge cast of related businesses that perform heat treating, plating, specialized painting, non-destructive testing, deburring and metal stretch forming.
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HBI, another machine shop getting a boost from Northrop business, occupies a section of a nondescript industrial building along Alondra Boulevard in Paramount. The streets surrounding the plant are chockablock with aerospace firms, such as Carlton Forge, Aerocraft Heat Treating and Savon Plating.
Los Angeles has an estimated 30 heat-treating shops alone, according to Roland Cobert, general manager of Industrial Steel Treating. By contrast, Seattle--home to Boeing--has one or two shops, Cobert said. Much the same is true in other exotic metal trades. The Los Angeles Basin has an estimated 24 companies that can stretch-form metals for aircraft or rocket skins.
A survey several years ago by the Paramount Chamber of Commerce found that the city had about 500 manufacturing companies, mostly aerospace. There are similar enclaves in Gardena, Torrance, Inglewood, North Hollywood, Chatsworth, Long Beach, Santa Ana, Anaheim and Hawthorne, among other cities.
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The Business Roundtable, a private research group, estimated in 1991 that there were 4,080 metal fabrication, processing and machinery companies in Los Angeles County employing 95,000 workers--more than the Hollywood studios combined. That included roughly 838 companies primarily doing machining work.
But this industry has been hit hard by the aerospace downturn.
Every week, a machine shop is shut down and its assets put up for auction. Among the latest victims was Riclan Dynamics, a small shop opened in 1982 by Richard Clancy, a Boston transplant who came to Los Angeles to ride the defense boom.
Clancy, who has degrees in engineering from MIT and business from Harvard University, gave up earlier this year after receiving no new order in five months, he said. Clancy plans to leave California soon.
The problem facing Riclan and the rest of the industry is the deep aerospace drought, in which new aircraft production has plummeted.
