Auction Marks End of Era at Once-Top-Secret Plant

It once was renowned as the nation’s biggest top-secret defense plant, an operation employing more than 12,000 people developing a revolutionary aircraft that could elude detection by enemy radar.

But on Thursday that complex--Northrop Grumman Corp.’s facility in Pico Rivera, former headquarters of the B-2 stealth bomber program--was a symbol of the descent of the aerospace industry in the Los Angeles area.

Northrop Grumman began dismantling the plant in earnest, holding an industrial auction where bidders snapped up, at bargain prices, equipment used to build B-2 warplanes costing about $2 billion each.

The auction dovetailed with a recent economic report showing that employment in Los Angeles County’s aircraft and aircraft parts manufacturing industries sank to 59,200 in August. That is the lowest monthly total in the 50 years that such records have been kept--and less than half the peak reached in 1987.

Aerospace executives and economists forecast further cutbacks, with some of the biggest layoffs due at Northrop Grumman.

Northrop Grumman officials say the Pico Rivera shutdown, to be completed within a year, and other reductions will slash the company’s defense-related employment locally from 7,300 now to 4,500 by the end of next year.

The new retrenchments in aerospace mark “another transition in the economy of Los Angeles,” said Jack Kyser, chief economist with the Los Angeles Economic Development Corp.

Kyser said the cutbacks, which have hit many engineers and other skilled workers, “represent a dissipation of our talent pool, the people who designed and assembled aircraft. Where have they gone?”

Still, aircraft production--the heart of Southern California’s aerospace business--remains second only to apparel as a local manufacturing employer.

But the industry began shedding jobs again a year ago, even while other aerospace sectors, such as commercial satellites, have remained healthy.

For Northrop Grumman veterans, the dismantling in Pico Rivera is part of a drawn-out farewell to a program that sparked enormous controversy over high costs and other problems--but also, ultimately, garnered praise for the B-2’s performance in combat this year in Yugoslavia.

Northrop Grumman operated the windowless plant with such strict secrecy that trucks made their deliveries in the middle of the night and Air Force officers avoided wearing their uniforms there.

“It was a once-in-a-lifetime experience to work on this kind of program,” said Robert Soikkeli, manager of the Pico Rivera site and a Northrop Grumman employee since 1982, when the company opened the Pico Rivera complex.

For the bidders representing the 115 equipment dealers and manufacturing firms at Thursday’s auction, it was a much less sentimental affair. They were trying to snare bargains on everything from file cabinets to a pressurized oven that fetched nearly $300,000.

It wasn’t the sort of stuff likely to attract foreign agents. Northrop Grumman had already destroyed or modified the most sensitive equipment, such as computer hard drives and sophisticated controls for industrial machinery.

In keeping with the downturn in Southern California’s defense industry, such auctions in recent years “have been pretty constant,” said Scott Rouse, president of Max Rouse & Sons, the Beverly Hills-based firm that ran the Pico Rivera auction. “Some of the major aerospace companies are running liquidation sales.”

Rouse, noting the industrial gear on sale at Pico Rivera, said that “most of this equipment will be put back to work, but most of it not in the aerospace industry. . . . Aerospace is soft, but generally the economy is doing well.”

One of the bidders, Phillip Friedman, president of Gardena-based Nasco Aviation, expressed concern about the future of aerospace in Southern California.

“There’s still a lot of technology and talent here,” he said. “There’s infrastructure--that’s the advantage here. But, slowly, the disadvantages of the high costs are outweighing the advantages of the infrastructure.”

For that reason, Friedman said, his company handles as much work as it can at its plant in Wichita, Kan., rather than at its higher-cost Gardena facility.

Thursday’s auction, held most of the day inside the hulking Northrop Grumman buildings, stood in dramatic contrast to the tradition of extraordinary secrecy.

During most of the last two decades, few visitors got past the lobby. If you were invited to the company cafeteria, you needed a security escort. Much of the inside of the main building is a maze-like network of walls and pathways intended, in part, to prevent employees from seeing more than they were meant to see.

Even Thursday, some of the old habits were hard to break. The company barred anyone from bringing in cameras, tape recorders, cellular phones or even pocket calculators.

Security personnel kept the bidders clustered together, preventing them from wandering around the building, even to inspect equipment that would be up for auction later in the day.

“Air Force rules,” explained one security official.

When B-2 development began in Pico Rivera on the grounds of an old Ford Motor Co. factory, the Pentagon had grandiose plans to buy 132 of the aircraft. The project, however, came to be mocked by critics as a gold-plated boondoggle as costs mounted to $44 billion, and production was halted after just 21 aircraft.

Backers of the B-2, however, won vindication after the bat-winged bomber’s debut in combat this year in the air war against Yugoslavia. The six B-2s used in the fighting overcame the bad weather that hindered other aircraft, using special technology that enabled them to employ satellite guidance to direct low-cost iron bombs to their targets.

Despite that performance, analysts say there is virtually no chance that more will be built.

Northrop Grumman will continue to perform maintenance on the B-2. As of next year, it expects to employ about 1,400 people on that work in Palmdale at a plant owned by the Air Force.

That total may include a few of the 2,000 still working for Northrop in Pico Rivera, but the vast majority at Pico Rivera are expected to lose their jobs over the next year.