Martin Marietta Will Cut 1,800 Positions at Its San Diego Plant : Aerospace: Work on Atlas and Centaur launch systems will be shifted to a production facility in Colorado.

In yet another setback to California’s aerospace industry, Martin Marietta Corp. said Thursday that it will eliminate 1,800 of its 2,100 jobs at its recently acquired space launch business in San Diego.

Martin said it will move the production of Atlas and Centaur launch systems to its Titan rocket plant in Denver, leaving behind in San Diego a small manufacturing and assembly operation employing 300 workers when the consolidation is completed at the end of 1995.

Under its consolidation plan, Martin will transfer 1,400 jobs to Denver and eliminate 400 other current jobs in San Diego, which has been particularly hard hit by defense spending cutbacks.

Martin, based in Bethesda, Md., did not disclose how many workers in San Diego will actually be offered transfers to Denver, though notifications will start soon, according to a letter to employees.

Although the job losses will certainly hurt the state’s economy in the short term, Martin’s move also eliminates another piece of the industrial mosaic that has made California a dominant force in aerospace manufacturing for decades.

The nationwide consolidation in aerospace and defense has nibbled away at California’s industry for years now, reducing employment in the tactical missile, helicopter and aircraft businesses.

To be sure, space booster production was not as crucial to the future of the state’s aerospace business as other sectors such as communications satellites, military spacecraft, bombers, transport aircraft or a host of other multibillion-dollar industries, experts say.

“Space launch is not a particularly high-growth, high-value segment,” said McKinsey & Co. aerospace expert Robert Paulson. “If you told me the last satellite producer was leaving the state, I would be more concerned.”

The departure of the Atlas work was almost predictable after General Dynamics agreed late last year to sell the unit to Martin, which is seeking to cut costs and eliminate excess facilities.

Martin said it will vacate a million square feet of plant space at a facility near downtown San Diego that is still owned by General Dynamics, but it will remain in a government-owned plant in San Diego where rocket fuel tanks and other metal assemblies are produced.

Martin also said it will keep its space magnetics business in San Diego, an operation with just a few dozen employees that has been attempting to apply superconducting magnet technology to fast trains.

Ever since Martin agreed to buy the San Diego unit, it denied that it planned to leave the city, though The Times reported in February that the firm had disclosed such a plan to government officials.

Martin had originally asked the government to share with it half the $500 million in cost savings resulting from the consolidation.

After The Times disclosed the unusual request, the House Armed Services Committee began an investigation and demanded that the Pentagon justify such a major change in policy.

Ultimately, the government agreed to share just half of $60 million in savings.

In a statement, Martin praised San Diego officials for their support, which it said allowed the firm to maintain “a significant presence in the city.”

Martin is studying a further consolidation of its Atlas and Titan launch operations at Vandenberg and Kennedy launch centers, in which hundreds of additional jobs may be eliminated.

Martin has been stung by a series of embarrassing problems and has incurred the wrath of both Pentagon and NASA officials. For example, water was recently discovered in an Atlas tank that was to be filled with helium.

“We are not sure how the water got there,” a Defense Department spokesman said Thursday.

In the letter to employees, the firm said the Denver transition will require employees “to stay focused 100% on mission success.” It said it will set up a duplicate assembly line for Atlas rockets there, then phase out San Diego production.

* JOBS SHAKEOUT: More California companies will trim payrolls, a study found. D2