Report Dims Hopes for Defense Conversion : Study Finds Aerospace Firms Are Ill-Suited for the Manufacture of Trains, Buses

Southland aerospace firms are ill-suited to venture into the surface transportation industry, often touted as their brightest hope for moving away from defense work, according to a report issued Monday by the Economic Roundtable.

The aerospace and transportation industries differ dramatically in the number of workers required, kinds of skills needed and types of products produced, the nonprofit research group said. Its study is the first exhaustive review by an outside group on what has been considered the centerpiece of the conversion plan for the Los Angeles defense industry.

The report said unemployed aerospace workers are unlikely to find work in surface transportation industries anytime soon, will frequently be forced to leave skilled manufacturing and will see their standard of living decline.

And because it takes lower-technology products and materials to build trains and buses than it does to build missiles and military aircraft, the hundreds of California manufacturing firms supplying the aerospace industry are ill-suited to convert their existing capabilities to meet the needs of surface transportation.

To salvage the Southland’s declining industrial strength, the Economic Roundtable report concludes that public and private investment must be directed at a long-term plan to expand and upgrade Southern California’s surface transportation systems to increase the opportunities for using aerospace design and manufacturing capabilities.

And the study, which surveyed more than 1,500 of the region’s aerospace companies, found a strong entrepreneurial base of hundreds of small- and medium-size firms ready and anxious to adapt themselves to serving commercial markets. Nearly one-quarter of the 544 companies that voiced a desire to explore surface transportation manufacturing were headed by a woman or minority.

“It won’t be easy, but we have a desperate need to do it,” said Daniel Flaming, president of the Economic Roundtable. “There is a significant mismatch between what we can do with aerospace and the requirements of surface transportation manufacturing. But we don’t have much choice, and I think in time, if we move quickly and intelligently, we could have equivalent industrial capabilities in these new markets as we have in aerospace.”

Flaming cites fuel cells, which are used in the space shuttle and could be used to power zero-emission vehicles, as an example of a transportation product that would utilize the competitive strengths of California’s aerospace firms.

Others include the production of light composite materials, electronic components, instruments and software for surface transportation control, communication and information systems.

The problem is that there’s no market yet for such products, and aerospace firms are hurting now. The rail car industry, for example, employs a total of 35,000 nationwide, while in Los Angeles County alone there are more than 200,000 aerospace workers.

George Velasquez, president of Arcadia-based Velbros Engineering Co., which had a thriving business machining structural components out of titanium and aluminum for General Dynamics before the A-12 contract was canceled a few years ago, voices a sentiment typical of the hundreds of others in a similar spot.

“People say, ‘Why don’t you just start making something different?’ It’s not that easy. We’ve been to a lot of different meetings and talked to a lot of different people about the transportation industry. The bottom line is, it’s easier said than done.”

Velasquez admits that even if he did manage to subcontract some rail car work, for instance, he might not need the full capabilities of his expensive computer-controlled machinery. “But hey, it’s still work--and that’s why we want to go after it.”