California Seen as Big Loser in ‘Star Wars’ Spending Cuts : Defense: A shift away from the space-based program will cost many jobs because area contractors got a large portion of the work.
The major scaling back of the “Star Wars” missile defense program will hit Southern California’s aerospace industry hard. It threatens more than $1 billion in annual contracts and thousands of jobs, area economists said Thursday.
Defense Secretary Les Aspin’s announcement Thursday of “the end of the ‘Star Wars’ era” will hurt California more than any other state because about a third of all spending on the Strategic Defense Initiative program went to California contractors, officials said.
Among the top contractors likely to be affected are TRW Space & Electronics Group in Redondo Beach, Rockwell International Corp. divisions in Seal Beach and Anaheim, McDonnell Douglas Corp. in Huntington Beach and Hughes Aircraft Co. in Westchester.
“That is going to have a major impact on California,” said Brad Williams, executive director of the Commission on State Finance. “We don’t know a lot of the details, but it is probably true that we were getting a third of the contracts on SDI.”
Aspin said the $3.8-billion budget request for the Strategic Defense Initiative program won’t change next year, but future requests for funds will reflect the shift away from deploying an anti-missile defense system in space--President Reagan’s vision when he announced the program in 1983--to a ground-based system designed to protect specific troops and military installations.
In 1991, California companies were awarded $331 million in SDI contracts, not including subcontracts to smaller companies or classified military contracts. More recent figures were not available, but Williams estimated that California firms won a third of the $4 billion in SDI contracts awarded by the federal government last year. Since 1985, the Defense Department has set aside about $29 billion for SDI work.
Economists said contractors were well aware that the SDI program was unpopular and that the Clinton Administration was likely to reduce spending on it. Besides the contractors, major research projects at universities in California also stand to lose money.
One company that stands to benefit from Aspin’s decision is Lockheed Corp. In the 1970s, Lockheed decided to focus its resources on ground-based programs, spokesman Jim Graham said.
Last year, that company’s missiles and space division in Sunnyvale won a $700-million contract to build a regional defense system capable of knocking short-range missiles out of the sky. Litton Data Systems in Van Nuys and Rockwell’s Rocketdyne division in Canoga Park are subcontractors on that project.
McDonnell Douglas in Huntington Beach has $200 million in active SDI contracts producing work for several hundred people in Orange County, said spokeswoman Shiela Carter.
Rockwell International employs hundreds of people on SDI projects in Anaheim and Seal Beach. Last year, Rockwell and Redondo Beach-based TRW won contracts worth up to $1 billion to develop the “Brilliant Eyes” system. The companies said at the time that the awards had saved about 1,160 jobs in the area.
“Brilliant Eyes,” a planned multibillion-dollar network of space-based, missile-tracking satellites, is likely to face cancellation also under the priorities.
MAIN STORY: A1
