BUSINESS WATCH : Bye-Bye, Bad Times?
The signs are that the bust in the aerospace and defense industries that has so punished Southern California’s economy may be coming to an end. It was disclosed Tuesday that the Pentagon is likely to order 80 more C-17 airplanes from McDonnell Douglas. The cargo jet is built by Douglas Aircraft in Long Beach.
The $16-billion contract certainly would be good news for Long Beach, which has been hit hard by the closure of its naval station and hospital and the planned phase-out of the Navy’s shipyard there. Under the C-17 deal, an additional 8,500 Douglas workers would be employed in Long Beach through the year 2005 at least.
In another boost to the area’s economy, Douglas is rebuilding its commercial business, recently snagging hefty orders for MD-95 passenger jets from the Atlanta-based regional airline ValuJet, for MD-90 craft from EVA Air of Taiwan and for other passenger jets from Saudi Arabia. Meanwhile, Northrop Grumman has persuaded the Pentagon to order more Southern California-built B-2 bombers.
Cynics will say that all this has something to do with President Clinton’s need to win the 1996 electoral votes of California, which has lost nearly three-fifths of its aerospace jobs in a painful recession. But there is evidence that California plants have begun to overcome their high-cost competitive disadvantages through more efficient operations, more amicable management-union relations and a changed attitude among local governments. Either way, the economic news is good for once.