Northrop Will Lay Off 350 Workers at Electronics Unit

Northrop said Wednesday that it will lay off 350 workers beginning next week at its Northrop Electronics division, an action affecting more than 7% of the unit’s work force of 4,800.

A Northrop spokesman said the layoffs are the result of a changing mix of the work force at the Hawthorne facility, partly as a result of the division’s work on the MX missile.

The layoffs will be partly offset by the addition of 75 to 100 newly hired workers at the division by the end of the year, the spokesman said. He added that Northrop is trying to place some of the laid-off workers at other company divisions.

The electronics unit has had layoffs earlier this year, and employees at the division said they have been told by management that there will be another major round of layoffs before the end of the year. However, the Northrop spokesman said the employees are mistaken.

The division’s largest program involves a contract to build a key part of the MX missile’s guidance system, known as an inertial measuring unit. The program is just completing its full-scale engineering development phase and moving into production. Such transitions often involve changes in the labor force.

But some employees speculated that the layoffs are occurring because the company is four months behind schedule in delivering guidance systems to the Air Force and cannot economically justify keeping a full work force on its payroll.

One employee said work has become so scarce in some areas of the facility--often called NED for its initials--that employees have joked: “We call it Club NED, come vacation with us,” a reference to the resort chain that operates under the name Club Med.

The division has been among Northrop’s fastest-growing units, contributing significantly to the sales of the firm’s electronics group, which includes more than just NED. In 1985, electronics operating earnings were $84 million on sales of $1.1 billion; in the first six months of 1986, electronics earned $39.4 million on sales of $526.6 million.

It posted those earnings despite the fact that the Air Force is withholding $11.25 million in contract payments because of Northrop’s delays in delivering the inertial measuring units.