Boeing Co. Imports Seattle Workers for Palmdale Jobs : B-2 program: The firm says it can’t find enough people in the Southland despite aerospace layoffs here.
About 450 Boeing Co. aircraft workers from Seattle have taken up residence in Palmdale hotels and apartments--many equipped with spas, swimming pools and racquetball courts--under an unusual assignment in the B-2 Stealth bomber program.
Boeing, a B-2 subcontractor to Northrop Corp., transferred the production workers to temporary assignments in Palmdale from its Seattle plants because, the company said, it was unable to locate and hire enough qualified workers in Los Angeles County--even though thousands of aerospace workers have been laid off in Southern California in the last 12 months.
The cost to station the 450 Boeing workers in Palmdale, estimated at more than $10 million a year, is billed to the Air Force under Boeing’s contracts. Although that is a minuscule part of the $62.8-billion B-2 program, the practice demonstrates one reason why the B-2 has become so costly, critics contend.
The future of the B-2 program will be debated on the House floor this week amid efforts to kill the program. At roughly $840 million each, the bomber is the most costly weapon in U.S. history and is straining the Pentagon budget at a time when weapons spending is being cut sharply. One overriding question raised in Congress about the B-2 is, what makes it cost so much?
“When you fly somebody into California from Seattle to build an airplane, that is a very expensive proposition,” said Rep. John R. Kasich (R-Ohio), a leading B-2 opponent. “Nobody has focused yet on the management problems in this program. These bombers are going to cost $1 billion each.”
Rep. Jim Slattery (D-Kan.), another B-2 critic, added, “It is just another incredible example of inefficiency in the production of this airplane. I can’t imagine how it would make economic sense for Boeing to move people from its Seattle operation to Southern California and pay them per-diem, transportation and rent them vehicles. From my perspective, this is a program that should definitely be shut down.”
However, the Air Force said it supports Boeing’s decision to import workers to Southern California, and government contracting experts said the cost falls within the guidelines of federal acquisition regulations. Critics such as Kasich, who serves on the House Armed Services Committee, said the charges reinforce their belief that the structure of the B-2 program builds in high costs.
Boeing spokesman John Kvasnosky said that the expense of moving workers to California is reasonable and necessary given the alternative of holding up production work. He confirmed that the cost of transporting and housing the workers in Palmdale is being borne by the government, saying, “Certainly the expense we incur building the B-2 is incurred by taxpayers. That is a given.”
The per-diem expense payments that Boeing workers receive are based on whether they are on short- or long-term assignments. For short-term assignments, they are given free suites at local hotels, free rental cars and up to $34 a day in spending money. For long-term assignments, they receive a flat $60 a day and must provide their own living quarters and cars, Kvasnosky said.
The number of workers on assignments has fluctuated for a few years, but just recently grew to its current level. The per-diem payments, along with air transportation provided monthly for workers wishing to visit their families in Seattle, can amount to $25,000 to $50,000 per employee annually. Boeing employs 860 workers in Palmdale, including the 450 from Seattle. As a subcontractor to Northrop, Boeing produces a section of the B-2 wing and completes that work at Northrop’s plant in Palmdale.
Kvasnosky added, “We have made every effort to hire locally. We have resorted to bringing people from Seattle for only those skills which we could not find down there.” He described those special skills as involving work with composite materials, which are reinforced plastics that make up a great deal of the B-2 bomber.
Northrop spokesman Tony Cantafio backed Boeing’s assessment that aircraft mechanics are in short supply, noting that Northrop has 60 open jobs for aircraft mechanics in Palmdale and that company representatives have made recruiting trips to Texas and Missouri. Cantafio said experienced aircraft mechanics wanting jobs should contact Northrop.
Several experts familiar with the Southern California aerospace job market disputed Boeing’s assertion that it could not find qualified workers in Southern California.
“Based on the talent pool in Southern California, that is absurd,” said Sandy Lechtick, president of National Recruiters, a Canoga Park aerospace recruiting firm.
Arnold Garlick, owner of the recruiting firm Pacific Search Consultants in Orange County, agreed: “It seems ridiculous. It seems like a real waste of taxpayers’ money to be importing people into an area with a glut of aircraft workers. But Boeing is the king of the Northwest, and they probably want to nurture their own work force.”
Garlick noted that Boeing has been recruiting Los Angeles aircraft workers at job fairs in recent weeks for positions in Seattle.
Lockheed recently laid off 2,750 aircraft workers in Burbank, many of whom had extensive skills in building exotic composite aircraft. Don Nakamoto, a spokesman for the International Assn. of Machinists District 727, which represents Lockheed workers, said, “I don’t see how Boeing could have a shortage of aircraft mechanics. We have had a lot of aircraft mechanics with composites experience who have been laid off.”
Kasich, the Ohio congressman, remarked, “It would be hard for me to believe. With all the California congressmen I know talking about the devastating effects defense cuts are having on their economies, it comes as a shock to me that Boeing has to bring in people from Seattle because there are no skilled workers in Southern California.”
A Boeing employee in Palmdale said he has no doubt that the company could recruit more local workers, even if the local job market in Palmdale is tight, as Boeing contends. The employee, who asked that his name not be published, said many of the Boeing workers from Seattle are relatively young and inexperienced and that there is an abundance of such aircraft mechanics in Los Angeles County.
The reason for the importation of workers, he said, is that Boeing sees parochial advantage to employing workers from its home base, especially because the cost can be billed to the government.
“There is a lot of animosity between the Boeing and Northrop workers,” this source said. “The Northrop workers feel like (the Boeing people) should all go back to Seattle. But the Seattle workers think the only right way to do something is the Boeing way.”
The Boeing way, the source said, is to import large numbers of workers from Seattle. The source noted that nearly all of the Boeing supervisors at Palmdale are on per-diem and that they favor importing their own work force rather than hiring local workers.
For its part, the Air Force said all of Boeing’s charges will be audited and that B-2 contracts contain incentives to cut costs.
“We constantly review the necessity for Boeing to send workers to Palmdale,” said Capt. Ginger Jabour, spokeswoman of the Air Force’s B-2 program office. “While it would be nice if that were avoidable, the alternative would be for Boeing to hold its structural pieces in Seattle until they were totally complete. That alternative would be much more expensive for the Air Force because it would cause breaks in the production process when a needed piece isn’t available.”
Meanwhile, Northrop has only 18 workers receiving living allowances during temporary assignments in Palmdale, Cantafio said. Until two years ago, Northrop also was spending massively on B-2 employee per-diems, he said.
Northrop had hundreds of workers from its Pico Rivera plant on temporary assignment in Palmdale, providing $11 million annually for their living expenses, according to Michael Green, a former Northrop B-2 Division investigator.
Green said he participated in an audit of per-diem expenses submitted by 300 Northrop workers in July, 1988, that documented extensive abuses and lax management.
“The employees were supposed to live in Palmdale, but a lot of people were just driving from their homes in Los Angeles and putting in for per-diems,” Green recalled. “The end result was that we found that several hundred people were doing it and could not provide receipts to back up their per-diems.”
Green said the audit found that many employees had never signed required contracts to receive the per-diems and that supervisors had failed to enforce regulations that employees provide receipts.
One Northrop B-2 worker earned so much money from per-diems that he purchased a boat and named it “Miss Per Diem,” according to another investigator who looked into the issue.
Cantafio confirmed that an audit was performed after the company received a tip on a fraud hot line. The audit did uncover abuses that led to the firings of three workers and an effort to tighten management controls, Cantafio said. The workers signed promissory notes to pay back the per-diem money and are continuing to repay Northrop, he said.
