General Dynamics to Cut 450 Workers at an S.D. Division
Citing the poor outlook for defense contracts, General Dynamics said Friday 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 Friday. 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.
However, General Dynamics’ Andrews said the troubled radio contract had no direct bearing on the company’s decision to reduce its payroll. “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 just the latest 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’ company-wide employment now stands at about 99,000, down from 103,000 at the beginning of this year, Andrews said.
Southern California has felt the impact of those job reductions: Earlier this year, 800 workers were laid off at General Dynamics’ Air Defense Systems unit in Pomona.
General Dynamics also said Friday 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.
Electronics and Convair are two of four General Dynamics divisions with major presences in San Diego, the others being Space Systems and Data Systems.
All told, General Dynamics is San Diego’s largest private employer, with 17,900 workers.
The biggest contributor to General Dynamics’ second-quarter loss was a special charge of $450 million for cost overruns relating to its A-12 attack aircraft for the Navy.
The problems with the aircraft later resulted in the layoffs of about 1,000 workers at General Dynamics’ Ft. Worth Division.
