Air Force’s Spy Satellite Unit Leaving State

The Air Force is planning to transfer its headquarters for designing secret spy satellites--along with at least 800 high-level scientific and engineering jobs--from El Segundo to Washington as part of a major realignment of the nation’s vast intelligence-gathering spacecraft program, The Times has learned.

The move could undermine one of the last healthy sectors of California’s aerospace industry--the military spacecraft builders and hundreds of highly specialized subcontractors that are clustered around the South Bay and in Sunnyvale in Northern California, industry officials say.

The transfer of the special projects office is part of a larger reorganization--prompted by federal budget cutbacks--in which the Air Force and the Central Intelligence Agency are redefining their responsibilities for designing photo and electronic eavesdropping spacecraft.

Although the immediate job losses are relatively small, the potential effect is far more significant. The jobs carry enormous clout in setting the agenda for tens of thousands of engineering and manufacturing positions at firms such as TRW, Hughes Aircraft and Lockheed. More than half a dozen U.S. spy satellites--each costing up to $2 billion to build, launch and operate--are currently in orbit. The majority of the satellites were built in California.

The Air Force plan calls for transferring scientists, engineers and administrators from the secret Secretary of the Air Force Special Projects office and the Aerospace Corp.--both based in El Segundo--according to government and industry sources.

While Defense Department sources estimate that about 800 jobs would be affected, industry sources in Los Angeles said that up to 1,000 Air Force jobs and an equal number of Aerospace Corp. jobs could be lost. A Pentagon official said the lower estimates were based on the assumption that a residual staff will remain to manage old programs.

Since the mid-1980s when the Pentagon budget peaked, California has lost an estimated 100,000 aerospace jobs. Aerospace experts have hoped that while the state loses aerospace manufacturing, it could retain highly paid “intellectual” jobs in science and engineering--the very types of positions the Air Force intends to transfer under its current plan.

Although industry officials are concerned that the move will damage the state’s aerospace industrial base, the Pentagon official contended that it should not have a large effect on major contractors. He noted that many military design and purchasing offices are located away from production sites.

Air Force and Aerospace Corp. spokesmen declined to comment.

In the past, Aerospace Corp. has said that it would move its staff if the Air Force were to leave El Segundo. The nonprofit research corporation was preparing to open a major suburban Washington office last spring when Air Force officials said its transfer plans were too ambitious, according to a key government source.

So far, the function of the special projects office remains an official secret, though it is widely known to design and manage the production of photo reconnaissance and electronic eavesdropping satellites.

The office operates at the Air Force’s Space and Missile Center in El Segundo, commanded by Maj. Gen. Nathan J. Lindsay, which will continue operations. The special projects office will relocate to northern Virginia, close to existing CIA satellite design offices.

Under pressure from Congress, the Air Force and the CIA have been trying to work out a plan to reduce duplication in their roles in an effort to cope with looming budget cutbacks. Congress cut the secret intelligence budget for fiscal 1993 by 6%, virtually assuring that cutbacks will be made in intelligence-gathering spacecraft programs, which comprise the largest part of the intelligence budget.

“It has to be cut,” a senior congressional staff member said. “The intelligence budget has to come down and the big spending programs are the satellites. You are going to see them going down incrementally through the mid-1990s.”

The reorganization comes at a time when the CIA and the Air Force are declassifying for the first time information about the nation’s spy satellite program--although much of the information has been widely known for years. Last month, the Pentagon acknowledged the existence of the National Reconnaissance Office, the umbrella organization that controls the design, production and operation of all spy satellites.

To cope with cutbacks in what has long been the biggest area of national security spending, the Pentagon and the CIA are studying ways to consolidate some of their functions, according to the Defense Department source.

Since the 1960s, the CIA and the Air Force have competed in the design of the spacecraft, according to knowledgeable defense industry sources. But the prospect of tighter military budgets has forced a consolidation.

Under the new arrangement, the CIA at least temporarily has been assigned the lead responsibility for designing satellites that use images, including both photography and radar satellites. Meanwhile, the Air Force has been given lead responsibility for electronic eavesdropping satellites, according to the two industry sources.

In the past, the Air Force and CIA design staffs were autonomous organizations, but now the staffs will be integrated, along with those from other intelligence organizations, including the National Security Agency and the Defense Intelligence Agency.

Intelligence experts and industry officials said the consolidation is long overdue because military satellite designs have matured over the years. Moreover, various contractors had become “captives” of the CIA or the Air Force, resulting in bureaucratic rather than technological competition.

Defense industry officials from California were more pessimistic about what the realignment and the relocations will mean for the state.

“The contractors come in to (special projects) headquarters all the time, because that’s where the customers are,” said one key industry official. “The major contractors are now going to have to move parts of their own operations back to Washington. We have had a very good show operating out here, doing a very good job for a very long time. Too bad.”

Despite the transfers, California is expected to continue as the leading builder of military satellites. But it is unclear how much of the high-skilled work on initial concept and design will remain in the state.

The Air Force for several years has considered shutting down its Space and Missile Center in El Segundo and moving it to either Albuquerque, N.M., or Colorado Springs, Colo. A Pentagon official stressed Thursday that the relocation of the special projects office is unrelated to the larger issue of the closing of the Air Force base.

In the long run, the Pentagon official said, moving the special projects office might free up office space and military housing for other programs at the base, “making it easier for (the Space and Missile Center) to remain in El Segundo.”