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TRW to Launch Hiring Effort

Firm plans to hire more than 1,000 engineers during the next year to meet the need at its Redondo Beach space and electronics unit

September 16, 2002|PETER PAE | TIMES STAFF WRITER

In a boost to Southern California's economy and its long-suffering aerospace industry, TRW Inc. plans to hire more than 1,000 engineers over the next year as a result of winning four major satellite contracts.

TRW's Space and Electronics unit in Redondo Beach over the last nine months has scooped up government contracts potentially worth more than $14 billion. The achievement vindicates TRW's strategy of focusing on advanced research, and it will help reverse the region's long slide in aerospace hiring.

"We are going to go into an aggressive hiring mode," said Timothy W. Hannemann, chief executive of TRW's Space and Electronics unit in Redondo Beach.

In addition to the engineering jobs, hundreds of others are likely to be hired in support roles.

And Hannemann said even more jobs could be created as the programs begin in earnest over the next year or two.

"I feel pretty good about the future of this place and for the industry in Southern California."

TRW's resurgence is leading a turnaround for the region's defense industry after nearly two decades of retrenchment, economists said.

For the first time since 1988, economists are predicting sustained growth in aerospace jobs in the region.

"People think aerospace has gone away, but if you look at Southern California in the last few months, there has been an impressive string of contract wins," said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. "The decline in aerospace since 1988 has been pretty relentless, but we're now looking at an uptick that should last for a while."

The TRW contract wins were among the latest in a batch of major awards given to Southern California aerospace firms this year.

Last month, Boeing Co. won a $9.6-billion Pentagon contract to build 60 more C-17 military transport jets at its Long Beach plant. Boeing's Seal Beach operations also garnered two defense contracts, one to design next-generation weapons for the Army, worth about $6 billion, and another to field a new radio system for about $4 billion.

Elsewhere, Century City-based Northrop Grumman Corp. is hiring 1,500 people to work on the Joint Strike Fighter in El Segundo and Palmdale.

The growth in jobs is not likely to come anywhere close to the industry's heyday in the 1940s and 1950s, but the quality of the new jobs is expected to add significantly to the economy.

Historically, most of those jobs were in manufacturing, but the new jobs are largely for high-wage engineers.

The spacecraft contracts, which overnight doubled TRW's backlog from $4 billion to $8 billion, will require the immediate creation of hundreds of high-paying engineering jobs.

About 8,000 people work in Redondo Beach, with an additional 1,000 scattered in other offices throughout the Southland.

Last week, TRW won a high-profile $825-million contract from NASA to build the next-generation space observatory to replace the Hubble Space Telescope.

Three weeks ago, TRW won its largest satellite production contract when it was selected to build weather-monitoring satellites for both military and civil use, potentially worth $6.5 billion.

In April, TRW was tapped to oversee a $6-billion satellite system to track enemy missiles, and earlier in the year it won a $1.3-billion contract to build instruments for a communications satellite system.

And there probably are other contracts that TRW has won but can't disclose because they involve classified Defense Department work, according to aerospace experts. Company officials declined to discuss this possibility.

"TRW is winning more contracts than we know about," said William H. Alderman, an aerospace mergers and acquisitions specialist. "With the Bush administration's current focus on bolstering military space programs, and Congress willing to fund those programs, TRW is in a very good position to win them. What they do fits really well with what the administration wants."

That's good news for hundreds of engineers who have been laid off from Boeing's commercial satellite operations in El Segundo in recent months. The division has been hit hard by the slump in the telecommunications industry.

TRW's hot streak appears to justify Northrop's logic for acquiring TRW. Northrop agreed to pay $7.8 billion for Cleveland-based TRW after a six-month battle that required Northrop to raise its bid three times.

Northrop has been eyeing TRW's space business in Redondo Beach for nearly a decade. TRW also has a major automotive parts business and an aircraft parts operation, both of which Northrop wants to sell.

TRW's space business will be one of Northrop's crown jewels, said Jon B. Kutler, president of Quarterdeck Investment Partners Inc., a Century City-based aerospace investment bank.

Northrop officials have declined to talk about the integration plans pending government approvals, but analysts anticipate that the company will not impose much change at TRW since there is little redundancy in operations.

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