Local News in Brief : Tax Effects of Northrop Layoffs

Northrop’s layoff of at least 700 electronics employees may have a minimal effect on Hawthorne finances by possibly reducing revenue from retail sales taxes, according to City Manager R. Kenneth Jue.

But the cutback will not affect Northrop’s $50,000-a-year business license tax because it is based on gross receipts rather than the size of the work force, Jue said.

The layoffs will primarily affect engineers and white-collar support staff at Northrop’s electronics division in Hawthorne. The division produces a variety of secret aircraft navigation systems, as well as a key guidance device for the MX nuclear missile, officials said.

Jue said it is difficult to predict the impact of the layoffs on area service, food and retail stores.

Northrop’s behind-schedule performance in the MX program has led to a shortage of guidance systems for missiles and was the subject of four congressional hearings last year.

About 700 jobs will be eliminated over the next seven months. As many as 1,200 out of a work force of 3,800 at the Hawthorne plant could eventually be affected, officials said.