General Dynamics Unit Plans to Lay Off 450
Citing the poor outlook for defense contracts, General Dynamics said Friday that it will lay off 450 employees at its Electronics division, a 15% cut in jobs at the San Diego-based unit and one of the biggest single layoffs in San Diego this year.
The division’s principal line of business is making test equipment for military aircraft such as the F-16 fighter, the C-17 military cargo aircraft and the B-1 bomber. As aircraft orders have fallen off, so has demand for General Dynamics’ test equipment, hence the decision to cut jobs, spokeswoman Julie Andrews said. The division employs 3,000 workers in San Diego.
The layoffs will be across the board, from salaried executives to hourly workers on assembly lines. The cuts will take effect starting at the end of January. The individuals losing their jobs will be notified after the Thanksgiving holiday.
Earlier this year, the Electronics division was hit with severe cost overruns related to its SINCGARS hand-held radio used by U.S. Army ground troops to communicate with airborne units. The overruns caused General Dynamics to take a $50-million writeoff, a charge that contributed to the defense firm’s $240-million second-quarter loss, the largest in its history.
General Dynamics’ Andrews said the troubled radio contract had no direct bearing on the company’s decision to reduce its payroll, however. “We are seeing the reality of the defense downturn at General Dynamics. . . . Layoffs in our industry have not been that infrequent lately. We are downsizing to meet what we expect will be declining revenues.”
The layoffs are the latest of a succession in the state’s aerospace industry this year, as contractors have been buffeted by defense spending cutbacks. As of last month, total aerospace employment in California was 335,000--down 18,000 from the start of 1990, according to the UCLA Business Forecast Project. Another 17,000 aerospace jobs will be lost in the state next year, UCLA projects.
General Dynamics also said Friday that it was laying off 60 of its 8,910 Convair Division employees over the next two months. San Diego-based Convair, which makes the Tomahawk Cruise missile, laid off 40 employees earlier this year.
