General Dynamics Unit to Cut 1,500 Jobs : * Aerospace: The cutbacks at its air defense group are in addition to the loss of 2,500 workers announced earlier.
General Dynamics Air Defense Systems Division will eliminate 1,500 jobs--mostly in the Southland--in 1992, compounding the steep 2,500 job losses at the missile operation this year, the company announced Thursday.
The division, which produces tactical missiles and Navy guns in Pomona and Rancho Cucamonga, employed 12,700 workers at the peak of the defense build-up in the late 1980s. But employment levels have been falling sharply for several years; the division currently has 5,700 employees--4,700 in California and 1,000 in Arkansas or Arizona.
The additional cutbacks, which will take the division’s total employment down to 4,000, will fall most heavily on the California operations because they represent the biggest pool of workers, company officials said.
Dave McPherson, the division’s vice president and general manager, said the slowing pace of the cutbacks shows that the operation is leveling out from its precipitous downturn in recent years.
Beyond the job reductions, the operation is selling equipment and recently put up for sale two of its three facilities in Rancho Cucamonga. Previously, to help curb costs, General Dynamics consolidated two divisions to create the current operation.
Company officials said the job cutbacks reflect both a shrinking market for tactical missiles and a declining share of that market held by General Dynamics.
“We are currently in a position where we are losing market share,” McPherson said in an interview. “But we have a plan to remedy that, and the evidence that it is working is the recent Stinger missile award and the award on the Phalanx.”
The Stinger is a hand held anti-aircraft missile made for the Army; the Phalanx is a large multibarrel gun used to defend Navy ships from missiles.
Last week, the Army awarded General Dynamics a $114.2-million contract for 4,413 Stinger missiles, eliminating its competitor, Massachusetts-based Raytheon, from future competitions. Raytheon experienced difficulty learning how to build the missiles and never formally qualified to supply the missiles.
In addition, General Dynamics two weeks ago won 70% of the Navy’s orders for Phalanx guns, eclipsing its competitor for that award, General Electric.
Those two contracts have precluded much deeper cutbacks, but did not change plans for the cutback of 1,500 jobs next year. A spokesman said the jobs would be eliminated through attrition and layoffs.
The tactical missile market has been sharply reduced by Pentagon cutbacks. Hughes Aircraft has had massive layoffs at its operations in Tucson, Ariz., as well. Raytheon had emerged as the tactical missile leader by becoming a second supplier on a variety of missiles, but has experienced a number of recent setbacks, including the Stinger loss.
General Dynamics said that laid-off employees would receive counseling, training and help searching for new jobs. The employees will receive the standard 60-day notice when the layoffs begin next year.
