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Boeing Plans to Cut Nearly 6,000 Jobs in Southland

Aviation: Almost a third of firm's work force in Long Beach will be affected. End to production of two jetliners is blamed. Company will reassess other manufacturing plans.

March 21, 1998|ELIZABETH DOUGLASS and RALPH VARTABEDIAN | TIMES STAFF WRITERS

In a damaging blow to the region's once-thriving aerospace industry, Boeing Co. on Friday announced plans to cut nearly 6,000 jobs in Southern California in the next 18 months, including nearly a third of its work force in Long Beach.

The company said it will eliminate 8,200 jobs nationwide, with more than 70% of the cutbacks in Long Beach, Monrovia and Downey. Facilities in Seal Beach and Palmdale will be reorganized. The Seattle-based aerospace firm blamed the reductions on its previously announced plan to end production of the MD-80 and MD-90 jetliners at the former McDonnell Douglas operation in Long Beach.

Officials said that 1,000 workers in Boeing's military aircraft program will be transferred from Seal Beach to Long Beach, where other military programs already are based.

That loss will be offset by the transfer of 1,100 space systems jobs to Seal Beach from Downey, where the company has a large amount of excess space. A company spokesman in Seal Beach said that no layoffs are anticipated in the reorganization.

Boeing moved into the Seal Beach facility--former headquarters of Rockwell International Corp.--when it acquired Rockwell's space and defense operations last year. The company made Seal Beach the headquarters for its space transportation units last year after adding McDonnell Douglas Corp. to its stable.

The Seal Beach complex has about 3,000 employees.

As part of that deal, Boeing also acquired the McDonnell Douglas space systems facility in Huntington Beach. None of the nearly 6,000 at the Huntington Beach plant will be affected by the cuts, a Boeing spokesman said.

The scale of Boeing's cutbacks was unexpectedly large--among the worst aerospace retrenchments since the early 1990s--and comes as the region is still reeling from the elimination of 5,200 Raytheon jobs, announced earlier this year.

The latest action dashed hopes that Boeing would lend its golden touch to the sprawling aerospace operations it has acquired in the state. It also signaled that Southern California faces serious economic damage from the still consolidating aerospace industry.

Boeing, which acquired McDonnell Douglas in August 1997, rejected transferring production work to Long Beach from its overloaded Seattle factories, despite hinting of such a plan to California state officials and union leaders in recent months.

Moreover, Boeing raised warnings of even worse news later this year, saying it will reevaluate its decision to continue producing the MD-11. About 3,000 workers in Long Beach work on that program.

"We are strategically realigning the use of our facilities," Boeing Chairman Phil Condit said. "These actions are in addition to ongoing initiatives to improve productivity and reduce costs."

The restructuring announced Friday will result in the closure of the company's Monrovia electronics manufacturing facility, which employs 1,000 people and supplies the Long Beach plant with aircraft parts. The firm also will shutter portions of its Downey operation and reorganize the work force in Seal Beach.

When completed, the plan will leave about 37,000 Boeing jobs in Southern California.

Boeing insists that most of the payroll cuts will be made through retirements and attrition, but the region will nonetheless feel the loss of thousands of high-paying manufacturing jobs.

"It is very disheartening for the county, because those jobs are just the kind of high quality blue-collar jobs that we need to hang on to," said Dan Flaming, president of the Economic Roundtable, a business research group. "A lot of people thought there was a light at the end of the tunnel at McDonnell Douglas with Boeing coming in. . . . Now to find that we are losing 6,000 jobs, I feel let down."

Flaming said the cutbacks would more than wipe out the progress Los Angeles has made in the nascent aerospace recovery since the industry bottomed out in 1996.

Disappointment, Except on Wall Street

The county had 61,200 aircraft jobs in February, a gain of 2,700 since August 1996. Similarly, job growth over the past two years in missiles, spacecraft, electronic components and electronic equipment will take a big hit from the Boeing cuts.

While Orange County's growing aerospace employment won't take a direct hit in the cutbacks, many subcontractors in the county are likely to feel pinched if work from Boeing operations in Long Beach drops off.

"It is disappointing," said David Goodreau, chairman of the Small Manufacturers Assn. of California. "It is going to have a big effect on the subcontracting industry. You may be looking at 1,000 subcontractors in the Southern California region that this will affect one way or another."

Boeing officials tried to soft-pedal the cutbacks in calls Friday morning to California politicians, saying that the losses could be more than offset in future years as the space business grows.

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