One Giant Leap : Shuttle Deal Brightens Southland’s Prospects

The announcement Tuesday that Lockheed Martin landed the coveted government contract to build a prototype model of a reusable space shuttle launch vehicle was widely viewed as a critical step toward the resurrection of the beleaguered regional aerospace industry--once the driving force of the Southern California economy.

“The message will go out that the aerospace industry is still here,” said Jack Kyser, chief economist of the Economic Development Corp. of Los Angeles County. ‘It’s probably not going to ever get back to where it was. But the technology base has hit bottom and it’s started back into a growth mode.”

The news was particularly significant for Palmdale and the Antelope Valley, where the experimental spacecraft known as the X-33 will be produced. But it was bad news in Orange County, where officials at Rockwell International in Seal Beach and McDonnell Douglas Space and Defense Systems in Huntington Beach received word that their proposals had lost out.

While that kills hopes that the program would bring hundreds of new jobs to Orange County, neither of the companies expects its loss to lead to layoffs.

McDonnell Douglas Space Systems spokeswoman Anne Toulouse said none of the several hundred workers who have been assigned to the X-33 program would lose their jobs.

“We’ll be transferring people to our Delta 2 and 3 expendable rocket programs and to the new competition for an expendable launch vehicle for the Air Force,” Toulouse said. “This was a tough loss, but there’s still plenty of work to do and we’ll be around to do it.”

Rockwell, which has had 300 workers assigned to the project, is “reassessing staffing requirements” but believes most of the X-33 project workers can be reassigned to other programs, spokesman Alan Buis said.

Rockwell fared much better than McDonnell Douglas because Rockwell’s Rocketdyne subsidiary in Canoga Park has the contract to provide engines for Lockheed Martin’s proposal. And that is worth $240 million--slightly more than 25% of the total value of the X-33 program.

Buis said Rockwell will keep operating four programs developed for the X-33 project because the technology can be transferred to the existing space shuttle fleet, which Rockwell continues to maintain and upgrade.

Lockheed Martin will build the X-33 at its fabled Skunk Works division, developer of many top-secret military aircraft. The $1-billion government contract is intended to produce a fully reusable rocket that can launch payloads into space as frequently as twice a month.

The hope is that the X-33 prototype will eventually lead to a workable rocket that will require thousands of workers to produce, test, launch and service.

“We’re still reeling,” said Palmdale Mayor Jim Ledford, noting that the X-33 contract comes on the heels of Lockheed Martin’s recent announcement that it was moving 1,000 jobs from its aircraft services division in Ontario to the Skunk Works facility in Palmdale.

“It gives our work force here something to look forward to, our business community here something to feel good about. Aerospace was born here and it’s going to stay here.”

Vice President Al Gore, in announcing the contract at the Jet Propulsion Laboratory in Pasadena, said the X-33 program could eventually lead to the creation of 2,000 jobs. Skunk Works President Jack Gordon noted the contract would mean 600 to 700 new jobs in the next six months.

But Kyser noted that for every aerospace job added for the X-33 work, another 2 to 2 1/2 jobs could be created because of the ripple effect throughout the economy.

The aerospace industry has lost more than half its jobs in the last 10 years in California, with most of that loss in Southern California, said Tom Lieser, associate director of the UCLA Anderson Business Forecast.

But recent employment trends suggest that the major job cutbacks have ended, he said, adding: “The industry seems to be nearing some critical mass, and maybe this is a big step along the way.”

But some observers were more modest in their assessments of the X-33’s economic impact. Dwayne A. Day, a policy analyst at George Washington University’s Space Policy Institute, called attempts to label the X-33 contract a major economic boost “tremendously wishful thinking.”

Day said the X-33 program has been surrounded by a huge amount of hype. The amount of money being provided by NASA is relatively small, and it remains to be seen how the rest of the funding will be secured, he said.

“I think it’s important that we not oversell this,” Day said. “This is a prototype vehicle. You build it, fly it and maybe even break it. Then maybe you build a production vehicle.”

Meanwhile in Orange County, the pain won’t be limited to only Rockwell and McDonnell Douglas. Scores of subcontractors throughout the county that have had long relationships with the two companies were counting on picking up work on the relaunchable vehicle program.

At American Automated Engineering in Huntington Beach, President Kenneth Christensen said news of Lockheed Martin’s selection was a blow.

The company has been a subcontractor for McDonnell Douglas on its X-33 program and developed a composite valve and rocket nozzle parts for the Delta Clipper.

“We had quoted a lot of different components for McDonnell Douglas, and naturally we’d have been a lot happier if they’d got the contract,” Christensen said.

Times correspondent Jill Leovy contributed to this report.

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