Contract Went to South Korea : Lockheed Workers Hold Savings Bond Protest

Lockheed workers, angered over an aircraft parts contract awarded last week by the firm to Daewoo Heavy Industries of South Korea, have organized a protest in which they said they are canceling their participation in a U.S. savings bond drive.

Lockheed said Tuesday that it had signed a contract with Daewoo worth up to $109 million for wing assembly work on the Navy P-7A anti-submarine patrol aircraft, one of the first times that military work has been contracted overseas.

The symbolic protest was organized spontaneously by employees and not formally endorsed by the union, according to officials at the International Assn. of Machinists, which represents workers. The bond drive is part of a regular payroll deduction savings plan.

It could not be determined how many workers had made the protest, but five employees who were interviewed by The Times said it was widespread throughout the Lockheed Burbank plant and was starting at the Palmdale plant.

“I canceled mine the day I read the article (about the Korean award) and so did everybody else in my department,” said Lockheed shipping clerk Carrie Thomas. “We could do that work here.”

Lockheed spokesman Jim Ragsdale confirmed that some workers had withdrawn from the program in protest but said he did not have a count of the participants.

“It is unfortunate that employees would choose to do this as a way of striking back at the company for something they perceive as a problem,” Ragsdale said. “It is not a problem for those employees at Lockheed Burbank.”

But employees said they were outraged that Lockheed would subcontract U.S. military work overseas when it was laying off U.S. workers and had shut down a plant in Watts only last year because of a lack of work.

“A lot of people are really angry about this,” said Leon Washington, a Lockheed production worker, who said he collected cancellations from 67 co-workers in his department. “We want to know why they would send this work to Korea when they shut down the Watts plant and laid those guys off.”

Chris Andrade, a union steward, estimated that 99% of the three dozen workers in his immediate area chose to join the protest.

“We feel this could go on and on, like the automobile industry,” Andrade said. “It upsets everybody.”

But Ragsdale said the wing assembly work to be performed by Daewoo was historically contracted out to a foreign nation, Canada, in the P-3 program, the predecessor of the P-7.

“If anybody is losing work, it is the people in Canada,” he said.

Ragsdale also noted that Lockheed received bids from two other firms and conducted a study of what it would cost the firm to build the wing at its own facilities.

Daewoo was “lower than the other bidders and they were significantly lower than our own studies showed would be the cost of Lockheed doing the work in house in the United States,” Ragsdale said.

But such rationale provided little solace to workers.

“If they think our labor is too high, maybe they should get somebody from South Korea to run our country,” said Thomas, the clerk. “They are crippling our country by sending all of this work overseas. The American people have nothing but poverty. I hate the fact that they are doing this.”

Asked if he thought some workers’ reaction to Korea was different from their reaction had it been Canada, Ragsdale remarked: “I don’t know. That gets into areas of what individual employee’s ethnic prejudices are, and I don’t know what they are.”

Ragsdale acknowledged that Americans are growing concerned about economic competition from low-wage Asian nations, but noted, “Korea does not have an airplane industry. We see no evidence that Korea is developing an industry that would become competitive with this country.”

He also noted that Lockheed must place some of its work in foreign nations if it expects to sell weapons to those countries, an arrangement called an “offset.” But Lockheed officials were careful to note that Daewoo won the contract because it outbid others and not because of preferential treatment.