Douglas to Move 2,000 Jobs to Long Beach

Douglas Aircraft Co., giving Long Beach’s beleaguered economy a boost, is expected to move the production of fuselages for its MD-11 jetliners to Long Beach next year, which could provide jobs for as many as 2,000 people, sources said Saturday.

The decision would mark the first time in several years that Douglas--a McDonnell Douglas Corp. unit whose current Long Beach work force of 10,000 performs final assembly of the MD-11 and Douglas’ other jetliners--has added a project of this size to its sprawling operation near the Long Beach airport.

As recently as early 1990, the work force totaled 43,000. But Douglas, which is based in Long Beach, has been forced to lay off tens of thousands of workers in recent years because of slumping orders for its commercial aircraft.

“We are tickled pink,” said City Councilman Alan Lowenthal, whose district includes parts of the downtown business area and the port. “We’ve spent a great deal of time as a city trying to encourage Douglas to stay in Long Beach, to increase their business here. It seems some of that work has paid off.”

The announcement of the fuselage work--which is currently done by a Douglas subcontractor in San Diego--is expected to be made Tuesday morning by Douglas President Robert Hood and Gov. Pete Wilson. Spokesmen for both men declined comment.

But sources familiar with the plans said the men are expected to praise the cooperation of company, union, city and state officials in assembling a package of incentives, valued at more than $100 million over several years, that helped persuade Douglas to place the work in Long Beach.

The decision is especially welcome for Long Beach, whose economy has been battered recently by much more than layoffs at Douglas and other local aerospace and defense contractors.

The city lost a bid for a proposed $3-billion Walt Disney Co. theme park. The Long Beach Naval Station closed last year and Long Beach Naval Shipyard has been threatened with closure.

Even the city’s famed behemoth Spruce Goose aircraft exhibit was shipped to Oregon in 1992, ending an era that began 50 years earlier when the plane built by Howard Hughes took about a one-mile flight over Long Beach Harbor.

In addition, Douglas last November picked an outside firm in Dallas, rather than Long Beach, to handle final assembly of its newest proposed jetliner, a 100-seat aircraft called the MD-95.

The MD-11 announcement also comes just as Douglas and the United Aerospace Workers’ Local 148 in Lakewood--which represents about 9,000 workers on Douglas’ jetliners and C-17 military transport aircraft--begin negotiations Monday on a new contract.

But recent developments could temper the enthusiasm surrounding the work’s expected arrival.

New orders for the MD-11--a three-engine, 300-seat wide-body airliner that carries a price tag of $100 million to $125 million--have been sliding for several years and remain scarce today.

Douglas, in fact, disclosed last week that it is weighing whether to halt MD-11 production for six months in 1996 because of the dearth of new orders. Douglas emphasized that such a halt was a worst-case scenario and just one of several contingency plans if more orders didn’t materialize soon.

Nonetheless, such a halt would mean the furlough of thousands of Douglas workers, undercutting the local economic benefits of the fuselage work.

The MD-11 fuselages are currently built in San Diego by the Convair division of General Dynamics Corp. But the company announced last July that it was getting out of the business and turning the component’s manufacture back to Douglas. At the time, Convair employed about 1,900 on the work.

Douglas had considered several other sites for the fuselage production, including Italy, where the aerospace firm already has major subcontractors. Douglas also had considered a facility in Tooele, Utah, that was being closed by the Defense Department.

Lowenthal said Long Beach worked hard to convince Douglas that the city was friendly to business.

“We have skilled workers and we have the infrastructure,” he said. “They don’t have to go to other states or to foreign countries. We said the city and the state will work with them.”

Recent statements by UAW Local 148 had indicated that Long Beach stood a strong chance of getting the work. Local President Douglas Griffith, in the union’s current newsletter, took the unusual step of praising Hood and other Douglas management for working to explore any avenue to bring the fuselage jobs to Long Beach.

The MD-11 has also been plagued recently by questions about its safety. The Federal Aviation Administration has ordered airlines worldwide to inspect all 130 MD-11s in service for possible cracks in their pylons--which hold the engines to the wings--after such a crack was found on at least one MD-11.

The FAA did not regard the problem as serious enough to ground the fleet, and officials from various airlines have said the plane is safe.