Northrop Launches Push to Save the B-2 Bomber : Economy: The defense contractor invites 40 area city officials and business leaders to its plant to warn that local economy is at risk.
Northrop Corp. is urging local officials to join the company’s lobbying efforts to save the imperiled B-2 bomber program, the company’s primary moneymaker and the main product of a Pico Rivera plant that employs 9,000.
The defense contractor invited about 40 area city officials and business leaders to its plant recently to deliver the message that a major component of the local economy is at risk. Company executives will repeat the briefing to another group of local officials on May 21.
Northrop needs to look no further than this week’s events in Congress to underscore its point. The House Armed Services Committee voted 45 to 6 Wednesday to authorize no new B-2 bombers for the second consecutive year. Committee Chairman Les Aspin (D-Wis.) said the B-2 price tag--$800 million per plane--is too high.
A subcommittee earlier in the week had voted to scrap the B-2 program, but the full committee approved $1.6 billion to continue B-2 research. President Bush had wanted four new bombers and a B-2 budget of $4.8 billion. The entire House and Senate will debate the bomber in the coming weeks.
Two bombers have been built, and 14 more are in production. The Defense Department would like a fleet of 75.
The B-2’s survival has become all the more critical since Northrop lost the competition to build the Air Force’s new advanced tactical fighter. That $60-billion contract could have secured Northrop’s financial health well into the next century. The B-2 program accounted for about half of Northrop’s $5.49 billion in sales last year.
Had it won the fighter contract, Northrop would have hired 1,300 workers this year and 3,300 in 1992 at the Pico Rivera plant. Throughout Southern California, Northrop would have added a total of 6,000 jobs, spokesman Terry Clawson said.
Instead, the economic bonanza will go to Lockheed Corp., which will build the plane in Marietta, Ga.
Northrop executives told city leaders at the April 30 luncheon that Northrop won the contract on the design table and runway, but lost it in the back rooms of Congress. They noted that Georgia is the home of Sen. Sam Nunn, powerful chairman of the Senate Armed Services Committee.
Some members of California’s congressional delegation failed to get behind the Northrop bid, and the B-2 is in danger of becoming the next political victim, Northrop officials told city leaders.
Rep. Esteban Torres (D-La Puente), who represents the Pico Rivera area, said politics had little to do with Northrop’s loss of the fighter contract. “I don’t doubt that Sen. Nunn’s being from Georgia may have helped a lot,” he said. “But at $100 million per plane, Lockheed had to have a superior proposal to win. Politics may have played a part, but only a small part.”
After the Defense Department announced its choice of Lockheed on April 23, Northrop executives set up the invitation-only gathering to sound the alarm for the B-2. “The purpose of the meeting was to make us aware that their life is dependent on the B-2 bomber,” Pico Rivera Mayor Garth G. Gardner said. “They wanted to make us aware we are the recipient of the benefits and will have to share part of the responsibility if the B-2 fails.”
“This would be the time to call in the chits,” he said.
Among the 10 cities represented at the session, Pico Rivera’s fortunes rise and fall most closely with those of Southern California-based Northrop. More than one of every three people who work in the city punch time cards at the 9-year-old plant.
“It’s the single most important piece of property in the city next to City Hall,” City Manager Dennis Courtemarche said. “It provides the most taxes, the most jobs. I wouldn’t say that how goes Northrop, that’s how the city goes, but they are a major player.”
The aerospace giant has pumped money into the local economy since 1982, when it moved into a 223-acre Pico Rivera site that Ford Motor Co. had abandoned. Although Northrop reduced its Pico Rivera work force by about 1,500 last year to increase efficiency, the company still has about eight times as many people as the city’s next largest employer, the El Rancho Unified School District. About 300 of the workers live in Pico Rivera. About 1,300 live in the surrounding communities, company officials estimated last year.
Annual property taxes from the Northrop plant helped Pico Rivera, a city of 59,000, finance a new shopping district along Whittier Boulevard, Mayor Gardner said. And Northrop’s general store and three cafeterias generate more sales taxes than any other single business in the city. The company and its employees contribute about $150,000 annually in goods and services to local charities.
Torres said he intends to fight for the B-2, adding that it remains a legitimate national defense project despite its cost and the apparent end of the Cold War.
But he warned: “With respect to (saving) the B-2, we have some serious work ahead of us.”
Impact of Northrop Corp. in Pico Rivera
Northrop lost the competition for the $60-billion Advanced Tactical Fighter contract to an out-of-state company. With the contract went thousands of potential jobs. Northrop must now rely on the survival of the company’s B-2 bomber (pictured above). Congress is debating whether to scrap the B-2 program, which has become a major prop of the local economy.
The five largest employers in Pico Rivera:*
Northrop Corp.: 9,000
El Rancho Unified School District: 1,200
Windsor Art Products (frames pictures and mirrors, and sells framed products): 260
Clarklift of Los Angeles (sells and services forklifts and conveyor systems): 241
Engs Motor Truck Company (sells and services Peterbilt trucks and tractors): 189
What the Advanced Tactical Fighter contract might have meant to the local economy:**
Jobs in Pico Rivera: 4,600
Jobs at Northrop: 6,000
Jobs in Southern California: 17,000
Economic impact: $834 million per year
* Source: Pico Rivera Chamber of Commerce and listed employers
** Source: Northrop Corp. and the UCLA Business Forecasting Project
