By W.J. Hennigan, Los Angeles Times
Published: 25 August 2011
In another blow to Southern California’s defense industry, aerospace giant Northrop Grumman Corp. said it is cutting 500 jobs in its aerospace division in anticipation of a slowdown in Pentagon spending.
The company began offering a voluntary buyout program Thursday but said layoffs would ensue if fewer than 500 people agree to leave before Oct. 28.
This is the second time in less than a year that Northrop’s operations in Southern California — home to the vast majority of the 23,000 employees in its aerospace division — has experienced job losses.
The news comes the same week Northrop moved its corporate headquarters from Century City to Falls Church, Va., sending 300 of its employees and high-ranking executives to the East Coast in the process.
“This action is being taken because of defense budget uncertainties and pressures on current and projected business,” Northrop spokesman Jim Hart said in a statement. “We must adjust our budgets by the end of this year to be prepared to meet the challenges of what shapes up as a demanding 2012. This is a necessary step to address the affordability that will allow us to effectively compete in a very cost-conscious marketplace.”
The broader aerospace industry has been downsizing to reflect new budget realities in Washington, where Congress has tightened purse strings on the Pentagon.
After growing by double digits every year since the Sept. 11, 2001, terrorist attacks, military spending is now expected to be reduced by hundreds of billions of dollars over the next decade.
The new budget realities have especially stung Southern California’s aerospace industry.
Last September, Northrop eliminated 500 jobs in its aerospace division. In January, Boeing Co. said it was cutting 900 of the 3,700 jobs at its sprawling Long Beach plant, where it builds C-17 cargo jets. In June, Lockheed Martin Corp. announced that it was cutting about 1,500 positions across its aeronautics business, including jobs in California.
“Those are very good, well-paying jobs being lost,” said Nancy Sidhu, chief economist for the Los Angeles County Economic Development Corp. “The workforce can expect these sort of nips and tucks around the edges until specific programs are singled out and canceled.”
Northrop has 23,000 employees in its aerospace division; about 18,000 of them work in California. The company’s engineers and technicians are located primarily in the Southland, where they design and produce center fuselages for F/A-18 fighter jets in El Segundo and satellites in Redondo Beach.
The company also has a large operation in Palmdale, where it built the B-2 stealth bomber. That’s where it now builds center fuselages for the upcoming radar-evading F-35 fighter jets, which will be used by the Navy, Marine Corps and Air Force.
The company has aerospace workers in Mojave, Rancho Bernardo and Goleta, Calif., as well.
Northrop has about 75,000 employees scattered across the globe, developing and building weapons and high-tech equipment that touch practically every aspect of U.S. military and intelligence operations.