Northrop Plans to Consolidate, Will Sell Some Facilities

Northrop will consolidate its aircraft business within the next 60 days, shifting some operations from Pico Rivera to Palmdale and eliminating some surplus facilities at its large complex in Hawthorne, it was learned Thursday.

The company has previously announced that it would eliminate 3,000 jobs this year, but the consolidation holds the potential for further layoffs of an undetermined number. The company employs 41,000, about 75% of whom are in Southern California.

“We are looking at cost reductions across the board,” said Northrop spokesman Tony Cantafio. “We already announced there are going to be 3,000 layoffs. We are always looking at achieving further cost reductions.”

The entire aerospace industry is rapidly falling into a chaotic consolidation, with thousands of workers being laid off across the country and the financial fortunes of major corporations taking a historic battering.

As part of the consolidation, Northrop officials are examining a wide variety of options, including the acquisition of additional facilities in Palmdale. Northrop representatives held a meeting with Rockwell International earlier this week regarding that firm’s surplus capacity in Palmdale, according to well-informed industry sources. Northrop officials said Rockwell, the prime contractor for the B-1 bomber, will not be a B-2 subcontractor, however.

The consolidation at Northrop will fall under the general guidelines set down by company president Kent Kresa at the firm’s annual shareholders meeting last month. Under Kresa’s direction, the company sold its headquarters building in Century City and a manufacturing plant in Anaheim. It is reportedly seeking to sell a Palos Verdes research facility and a number of facilities in Hawthorne.

Northrop’s elimination of 3,000 jobs is already creating some surplus space. And Defense Secretary Dick Cheney in late April cut future production of B-2 bombers from the 132 originally planned to just 75, which may create even more pressure for consolidation on Northrop.

“We intend to take full advantage of the reduced (B-2) program to cut overhead costs, improve inventory management and make better use of our facilities, especially by reducing duplication and increasing the sharing of facilities among various operating center,” Kresa said last month.

Many of the buildings at Northrop’s Hawthorne complex are old and in some cases dilapidated, workers say. One Northrop worker told The Times last week that he was injured when he slipped in a quarter inch pool of water that had leaked through the roof at a facility involved in the production of fuselages for the Boeing 747.

Northrop leases a significant number of buildings in Hawthorne, while it owns its Pico Rivera plant. Lawrence Harris, an analyst at Bateman Eichler, Hill Richards, estimated that Northrop owns 218 acres of land in Hawthorne, worth $410 million.

Kresa said the company was examining 13 different joint projects in an effort to increase efficiency. As part of that effort, the firm’s YF-23 Advanced Tactical Fighter program would be relocated from Hawthorne to Pico Rivera, if the firm wins its competition against Lockheed for a full scale development contract.

If the ATF is moved to Pico Rivera, it would leave Northrop’s Hawthorne operations with just production of fuselage sections for the Boeing 747 jetliner and guidance systems at its electronics division. The firm also produces the F-18 aft fuselage at its facility in El Segundo, which is believed to have a large amount of surplus space.

The F-18 program is winding down, making the El Segundo property a prime candidate for a future elimination. But the 747 production is continuing to build up and Northrop is expected to supply five fuselages per month to Boeing. It is unlikely that Northrop will move production of that program in mid-stream, industry sources said.

Meanwhile, employees at Northrop’s Ventura plant are worried that Northrop will close that facility and send some of the work there to a new plant in Perry, Ga. Northrop has declined to answer questions about the future of the Ventura plant, which is located in Newbury Park.