Boeing Co. said Monday that it is cutting back production at its Delta II rocket-manufacturing facility in Huntington Beach in an effort to cut power consumption as Southern California's aerospace industry continues to struggle with the energy crisis.
The world's biggest aerospace company said it may cut 400 to 500 jobs as it also combines various programs for its Delta rockets into a single unit. The cuts would follow a plan Boeing announced last year to lay off 900 people in shutting some production in Huntington Beach and consolidating manufacturing of the Delta rockets in Pueblo, Colo., and Decatur, Ala.
The company expects that few people will actually lose their jobs because many probably can be shifted to other roles in Boeing's Southern California space division, Boeing spokesman Walt Rice said.
In cutting power consumption, company officials said they reviewed the financial numbers and figured keeping production on schedule was getting too expensive. As a result, Boeing decided to cut back to one work shift from three. About 8,000 people work at the Huntington Beach facility, which shut down at 4:30 p.m. Monday because of a Stage 3 power alert.
Many aerospace companies in California signed an agreement under the interruptable customer program to voluntarily reduce electrical consumption during a shortage in return for a break in rates under normal conditions. In a shortage, the companies are asked to reduce the load or pay a higher rate.
"We're paying a substantial premium," said Anne Eisele, a Boeing spokeswoman. "It became economically too expensive, so we had to move to a single shift."
At Boeing's nearby Long Beach operations, where about 14,000 workers assemble the 717 commercial aircraft and C-17 military transport, the company has been trying to shed as much office electricity consumption as possible to keep production from being interrupted.
A spokesman said air conditioning has been turned off, office lights dimmed and some elevators shut down, leading to some "discomfort" for employees but providing just enough savings to enable the company to keep to its production schedule.
"We have chosen not to [curtail production] because of the commitments we have with our customers," said John Thom, a Boeing spokesman. "We're shedding as much as we can and paying the difference."
Northrop Grumman Corp. also chose not to curtail work on F-18 fighter planes at its El Segundo plant, electing rather to shut down non-production areas earlier than usual. Since the first of the year, it has been sending workers home at 4:30 and shutting down power to its offices by 5 p.m. when an alert is issued.
Bloomberg News was used in compiling this report.