Talks Reportedly Under Way on Convair Sale : Industry: Union leaders say a Taiwanese company is interested in the plant. Thousands of jobs could be jeopardized.
General Dynamics is reportedly negotiating with the Taiwanese company already planning to buy a stake in McDonnell Douglas’ commercial aircraft business toward the eventual sale of a Convair plant that builds fuselages for McDonnell planes.
The sale, if completed, might jeopardize the jobs of 3,500 workers who build MD-11 fuselages at a Convair plant here.
Leaders of United Auto Workers Local 148 in Long Beach said Thursday that General Dynamics has entered preliminary negotiations with Taiwan Aerospace Corp., the company that hopes to acquire 40% of McDonnell Douglas’ commercial aircraft business. The UAW represents about 20,000 employees of McDonnell’s Douglas Aircraft unit in the Los Angeles Basin.
UAW spokesman Floyd Sparks said union leaders learned of the purported negotiations last week through a congressional source in Washington.
General Dynamics spokesman Jack Isabel declined to comment on “speculation” about the Convair plant’s future.
The UAW and the International Assn. of Machinists, which represents about 2,000 employees at the Convair plant, oppose McDonnell Douglas’ plan to create a joint venture with Taiwan Aerospace.
IAM and UAW officials fear that major portions of McDonnell Douglas’ next-generation MD-12 jetliner, which is supposed to go into production later this decade, would be lost to Taiwanese plants if McDonnell completes its deal with Taiwan Aerospace.
UAW officials Thursday said that fuselage production at Convair “is scheduled to go to Taiwan” when McDonnell Douglas eventually puts the MD-12 into production. Union leaders speculated that the Taiwan company would purchase the San Diego plant in order to gain an understanding of how the fuselages are built.
If the local plant’s production were transferred to Taiwan, “it would be difficult to find new positions for people with those particular sets of skills,” said Dan Pegg, president of the nonprofit San Diego Economic Development Corp.
It was uncertain Thursday if a deal between General Dynamics and the Taiwanese company would be concluded. But Pegg noted that “if a foreign country is investing money in the U.S., they’d want to draw as many advantages as possible and employment in their own home country would obviously be one of them.”
The purported negotiations seem to fit with General Dynamics’ recently adopted strategy of selling off some operations--such as Convair--that fall outside of the St. Louis-based company’s main defense businesses.
During a highly publicized speech in early November, General Dynamics Chairman William Anders said the company will sell divisions to other companies, strengthen itself through acquisitions or simply sell off the assets of businesses where it doesn’t have “market dominance.”
Anders said he intends to refocus General Dynamics on three main businesses: army tanks, submarines and military aircraft.
The speech sent chills through the ranks at General Dynamics, which--with about 17,000 workers--is San Diego County’s largest private employer. Those fears were heightened when a newspaper quoted Anders as mentioning the San Diego-based missile and electronics operations, with about 16,000 employees, as operations that might be placed on the block.
On the day before Thanksgiving, General Dynamics announced that Defense Department funding cuts would force the elimination of nearly 300 jobs in Convair’s advanced cruise missile program. In early October, President Bush said that he wanted to yank nuclear-tipped cruise missiles off U.S. Navy surface ships, a move that conceivably could cost more jobs at Convair.
Convair, which is under contract with McDonnell Douglas to produce 200 MD-11 fuselages, has already delivered 61 units. The firm, which turns out about five fuselages each month, expects to continue manufacturing the aircraft bodies for several more years, Isabel said.
The massive, cylindrical-shaped fuselages are manufactured at Convair’s Lindbergh Field plant and shipped to McDonnell Douglas’ Long Beach plant via ocean-going barges. Convair’s MD-11 production facility, along with many other General Dynamics plants, are scheduled to close down Dec. 20 for a traditional year-end break, Isabel said.