Profits Up but Layoffs Seen at Aircraft Firms


Aerospace industry sales, profits and exports were at record levels in 1990, paced by a strong commercial aircraft sector, the Aerospace Industries Assn. reported Wednesday. But the sales of $131 billion represented a drop of 3.6% on an inflation-adjusted basis.

Employment dropped 5% to 1.27 million in 1990 and is expected to drop an additional 2% next year, the trade group said. Separately, McDonnell Douglas said Wednesday that it may cut another 2,000 jobs at its Douglas Aircraft unit in Long Beach.

Aerospace industry exports have surged this year to $37 billion, a 14% increase over last year. Imports were up to a record $11 billion, but the overall trade surplus in aerospace reached a milestone $26 billion in 1990.

The outlook for 1991 is for total sales of $133 billion, marking another 3.6% decline in inflation-adjusted sales. Although commercial aircraft shipments will rise, sales of missiles and military aircraft will slump.


Employment will drop another 2%, according to the industry, a decline of 25,000 nationally.

Douglas Aircraft President Robert Hood said Wednesday that the company is currently laying out a business plan for 1991 and may elect to cut another 2,000 jobs, though such plans have not been finalized yet.

If the firm does eliminate those jobs, the cuts would be handled through attrition and not layoffs, Hood said. Attrition runs about 6% of its work force, Hood said, meaning the company would expect about 2,400 of its 40,000 employees to voluntarily leave next year.