Douglas Aircraft to Trim Up to 3,800 More Jobs : Aerospace: The cuts--which are on top of 2,200 layoffs last month--are far deeper than analysts had expected.
McDonnell Douglas Corp. said Monday that it will eliminate up to 3,800 jobs over the next 18 months at its Long Beach-based Douglas Aircraft division because of a downturn in the aircraft industry and the division’s lackluster financial performance.
The announced cuts--which were much deeper than previously anticipated--come hard on the heels of the layoff of 2,200 workers only two weeks ago.
The company would not say whether it was targeting particular positions or individual plant locations. However, spokesman Don Hanson said most of the job losses would come in so-called touch labor--among the people who actually design and build the company’s planes.
Douglas Aircraft has seven production facilities, including three large plants in Long Beach, Carson and Torrance.
The jobs will be eliminated through both layoffs and attrition, the company said in an internal memo released to The Times. Overall, between 1,800 and 3,800 jobs will be lost, the company memo said.
Despite the news, Douglas President R. H. Hood Jr. said the company is “moving in a positive direction.”
But Hood added: “Our financial performance compared to Boeing and Airbus is still poor and leaves us at a competitive disadvantage. This means it’s critical we continue our cost control efforts--unfortunately, including layoffs--as we further reduce aircraft unit costs, span times and overhead expenses.”
The news came as a crushing blow to both union leaders and officials of the city of Long Beach, which boasts Douglas Aircraft as its largest employer. Douglas has already said its next jet, the proposed MD-12, will not be built in Southern California.
“If there are continued layoffs, the impact will be very serious--not only on the city of Long Beach, but on Lakewood and Orange County cities as well,” said Robert Paternoster, the city’s director of planning and building.
Union officials said they had been notified of the job cuts but had not yet been told which jobs would be affected. Nevertheless, the news left some seemingly embittered.
“They are shifting work out of here left and right and telling us that it’s good for us,” complained Karl Fees, an official with United Auto Workers Local 148, which represents about half of the employees at Douglas’ plant in Long Beach. “They are a heartless multinational corporation that does not care about the community.”
Fees would not say whether the union would attempt to fight the cuts, but noted that some local officials were scheduled to testify today at a congressional hearing that will examine Douglas’ proposed sale of 40% of its commercial aircraft business to Taiwan Aerospace.
Sen. Jeff Bingaman (D-N.M.) called for an examination of the impact of the sale on the aerospace industry.
The cutbacks are just another in a series at Douglas, which has been losing business to competitors Boeing and Airbus for a number of years. Additionally, American Airlines, one of McDonnell’s best customers, recently decided not to exercise options to buy 11 of McDonnell’s new MD-11 jets--trimming about $1.1 billion in future Douglas sales.
The combination has been devastating to Douglas’ work force. In the past year, the company has eliminated roughly 11,000 jobs, dropping from a total of 53,000 employees to its current staff of 41,800.
Meanwhile, McDonnell said it had settled a long-running tax dispute with the Internal Revenue Service for less than anticipated and expected to post a one-time gain of up to $100 million in the current quarter.
