Jet Maker’s Having Lots of Good-Air Days

Gulfstream Aerospace Corp. is launching a major expansion of its Long Beach finishing plant, which reflects not only the corporate-jet maker’s own comeback but also the industry’s cautious optimism about higher sales generally.

The Savannah, Ga.-based concern uses the plant for painting, furnishing and otherwise putting the finishing touches on its new corporate planes, and for servicing existing aircraft.

Now, as part of the expansion, Gulfstream is adding a 64,000-square-foot paint facility to the site. In turn, the company expects its 460-member Long Beach work force to jump 43% over the next eight months as it hires an additional 200 workers, plant manager Ken Kelley said.

Gulfstream is gearing up in large part because it’s now selling its newest, most capable and most expensive business jet ever: the Gulfstream V, a $35-million airplane that can seat up to 19 people.

The plane also can fly up to 6,500 nautical miles nonstop, which, at a time when business is becoming more global, Gulfstream hopes will appeal to executives who need to fly from New York to Tokyo or from Los Angeles to Moscow.

The company expects to double annual production of the Gulfstream V and its other major product, the Gulfstream IV-SP, to a combined 60 airplanes by 1999. That’s because the company’s order backlog as of Dec. 31 totaled 94 planes valued at $3.1 billion, up from 57 planes a year earlier.

The program got an added boost last week when Executive Jet Inc., a major operator of business jets, placed orders for an additional 11 Gulfstream IV-SPs valued at about $275 million.

All of which means the plant has work booked through at least the next 2 1/2 years, Kelley said.

“That’s a position we’ve never been in before,” he said.

Gulfstream’s Long Beach workers aren’t the only ones in Southern California with a vested interest in the company’s growth. Los Angeles-based Northrop Grumman Corp. makes wings and nacelles, or engine coverings, for Gulfstream’s jets, and AlliedSignal Aerospace in Torrance produces the auxiliary power system and other components of the Gulfstream V.

It’s also a boon to AirFlite, a Long Beach subsidiary of Toyota Motor Corp. that provides crews and maintains Gulfstream jets on behalf of the planes’ owners.

But the success of the Gulfstream V, and its manufacturer, is by no means guaranteed. The company faces a host of rivals in the market for expensive business jets, including the Global Express, built by Bombardier Inc., and the Citation X, made by Textron Inc.’s Cessna subsidiary.

It also appears that the market for such expensive planes will continue to grow only modestly, even though the plane makers have worked hard to erase the public’s perception that the planes are little more than corporate perks and unnecessarily take a slice from shareholders’ returns.

Although Gulfstream’s backlog is growing, overall deliveries of general-aviation turbojets last year slipped to 243 planes from 246 in 1995, according to the General Aviation Manufacturers Assn., a trade group. In the early 1980s, the industry sold more than 300 business jets a year.

Moreover, unit sales of corporate planes are expected to keep averaging meager 1.2% annual growth through 1999, according to a forecast by the aircraft-lending arm of CIT Group, a financial services concern.

But Gulfstream clearly is in better shape than in the early 1990s, when the company was losing altitude fast.

The investment banking firm Forstmann Little & Co. in New York bought Gulfstream from Chrysler Corp. in 1990 and later had to inject more cash into the company, change its management and otherwise restructure the operation to keep Gulfstream afloat amid a dearth of orders.

Then last October, with Gulfstream’s fortunes improving and the Gulfstream V about to debut, Forstmann Little took the company public by selling 42.5 million shares at $24 apiece, or a total of $1 billion.

Since then, though, the stock has not advanced and still trades around $22.50 a share, reflecting Wall Street’s cautious outlook for Gulfstream’s prospects.

Times staff writer James F. Peltz can be reached at james.peltz@latimes.com