California Still Leads Nation in Defense Awards
California, continuing a long-running postwar trend, topped the nation in winning defense contracts last year, as defense firms in the state tallied $23.5 billion in Defense Department awards, the Pentagon announced.
But financial documents released Wednesday show that the 1988 figure for California was down 4.3% from the fiscal 1987 total of $24.5 billion.
As defense budgets experienced a third year of decline, so did the amount coming to California. The state got $27.7 billion in fiscal 1986 and $29.1 billion in fiscal 1985. Overall, Defense Department procurement fell 3.4% in 1988 from its 1987 level.
In all, California companies garnered 18.9% of the nation’s military procurement contract awards in the year that began Oct. 1, 1987.
Trailing California were Virginia, Texas, New York and Massachusetts, which won contracts totaling $10.2 billion, $9 billion, $7.7 billion and $7.2 billion, respectively. Virginia’s share rose 31.1% over last year’s level to bring the state into the No. 2 spot.
In recent years, the San Diego and Sunnyvale areas have snared the largest share of Defense Department expenditures in California, followed by Los Angeles, Long Beach and El Segundo.
Southern California is home to such defense manufacturing giants such as Lockheed and Rockwell International, the nation’s fourth- and 12th-largest defense contractors in 1987, as well as Litton Industries and Northrop Corp., which ranked number 14th and 23rd in the nation, respectively.
Between 16% and 23% of the nation’s aerospace work force lives in the Los Angeles area, according to a report by the state’s Commerce Department.
Joseph Campbell, an aerospace analyst with the New York-based financial firm of Paine Webber, said the state’s declining claim on defense dollars is probably temporary. As an example, Campbell said Rockwell International’s production of 100 B-1 bombers ended in January, 1988, and millions in B-2 stealth bomber production funds will begin to flow to Northrop in the coming year.
“We’re kind of betwixt and between,” said Campbell, who added that several planned modernization efforts that affect California defense contractors are in a similar trough.
CALIFORNIA FOR THE DEFENSE The states that received the most defense contracts over the past two years. Figures in billions of dollars. 1988
State ’88 1. California $23.46 2. Virginia 10.24 3. Texas 9.00 4. New York 7.70 5. Massachusetts 7.21 6. Missouri 5.56 7. Florida 5.33 8. Ohio 5.06 9. Connecticut 4.91 10. Maryland 4.27
1987
State ’87 1. California $24.51 2. New York 9.62 3. Massachusetts 8.68 4. Texas 8.65 5. Virginia 7.81 6. Missouri 6.00 7. Florida 5.79 8. Connecticut 5.03 9. Maryland 4.75 10. Ohio 4.55
