Lockheed Secret Unit to Cut 10% : Employment: Not immune after all to defense cutbacks, the celebrated Skunk Works will lay off 400 workers.
Lockheed will lay off about 400 workers at its Skunk Works facilities in Palmdale and Burbank over the next three months, cutting about 10% from what was expected to be among the few stable aerospace work forces in Southern California, the company disclosed Friday.
The Skunk Works, officially called the Lockheed Advanced Development Co., said the layoffs were required to hold down costs amid a drop in business during the first six months of this year and the dimming prospects for the new Navy AFX attack jet program.
Lockheed said layoff notices would be issued by mid-June, with salaried workers absorbing about two-thirds of the job cuts and hourly workers the rest. The unit now has 4,330 employees, about half of whom are in Palmdale and half in Burbank.
Although Lockheed drastically cut its local aircraft work force in the late 1980s, the Skunk Works was believed to have reached a stable plateau. At the firm’s annual shareholders meeting earlier this month, Lockheed Chairman Daniel Tellep said that prospects for the operation were “great.”
But “realities of the short-term business situation” forced the firm to make the cutbacks or risk becoming uncompetitive in bidding for new contracts, according to Skunk Works President Sherman Mullin. Most of the unit’s work is cloaked in secrecy, making outside estimates of its future employment and sales often inaccurate.
The Skunk Works is among the most advanced aircraft development and production companies in the U.S. Its jet planes have included the F-117, SR-71 and U-2.
Although overcapacity in the U.S. aircraft industry is forcing a tough consolidation, few experts expect the Skunk Works will be closed because of its unique position in U.S. aircraft technology.
Tellep has said that while the Skunk Works does not have an existing production program, it is involved in early development work of at least one secret aircraft. The Skunk Works also performs modifications and maintenance on the F-117 fighter jet and U-2 spy plane.
In addition, Skunk Works spokesman James Ragsdale said Friday that the firm plans to bid on several secret programs this year that “could turn long term into major pieces of business.” The unit is also working on three industry teams bidding for the proposed AFX Stealth aircraft, but recent Pentagon efforts to cut costs have raised the serious possibility that the program will be either canceled or delayed.
Mullin also blamed the layoffs on a drop in funding for existing programs and a lower rate of new business so far in 1993.
