Lockheed to Cut 800 Palmdale Jobs, 2,000 Others in Nationwide Action
In another blow to the Southland aerospace industry, Lockheed Martin Corp. said Thursday it will cut more than 800 white-collar jobs in Palmdale and another 2,000 nationwide as part of a corporate reorganization.
Lockheed Martin, the nation’s largest defense contractor, said most of the cuts will be divided evenly between facilities in Marietta, Ga., Fort Worth, Texas, and at its famed Skunk Works in Palmdale.
As part of the move, the Skunk Works--officially known as Advanced Projects Development--will no longer be a separate operating company within Lockheed Martin.
Instead, it will have a general manager but will take direction from a newly created Lockheed Martin Aeronautics Co. based in Fort Worth, spokesman James Fetig said.
The Skunk Works has a long history developing top-secret aircraft for the U.S. military, including the U2 and SR-71 spy planes and the F-117 stealth Fighter.
Historically, the semiautonomous nature of the Skunk Works was credited with allowing it to keep a tight lid on development costs. But Fetig insisted the change would not be detrimental.
“It’s going to continue to do what it’s always done in terms of advanced development initiatives,” Fetig said. “Its mission will not change.”
Among the jobs targeted by cuts are positions in engineering, administration and procurement, Fetig said.
Lockheed Martin operations in Palmdale include development of the Joint Strike Fighter prototype, the X-33 VentureStar rocket plane, the Joint Air-to-Surface Standoff Missile and upgrades to existing aircraft including the C-130 transport and the F-117. The moves are expected to save Bethesda, Md.-based Lockheed Martin $200 million and are aimed at streamlining operations and making the firm more competitive, Fetig said.
“This is related to becoming agile in a rapidly changing marketplace,” Fetig said. “It’s to reduce and eliminate bureaucracy.”
Lockheed is expected today to report fourth-quarter earnings of 59 cents per share, matching analysts’ estimates. A year ago, it earned 81 cents. Its shares have fallen about 50% in the past year and closed Thursday at $19.44, down 63 cents.
Before the layoffs, Lockheed Martin had 4,800 workers at five sites at Air Force Plant 42 in Palmdale. The company cut 600 jobs at the facility last year, according to Skunk Works spokesman Gary Grigg. Nationwide, the company trimmed more than 5,000 jobs in 1999.
Antelope Valley officials said the silver lining to Thursday’s announcement was that it would put Lockheed on a stronger financial footing.
“This is not unexpected,” said Danny Roberts, economic development director for the city of Palmdale. “In the long run it puts them [Lockheed] in a better position to compete and get future business. That’s good for Palmdale.”
Roberts noted that state and city officials have been working to generate other business, such as a recent deal with Swiss aircraft firm SR Technics to build a maintenance facility that will create 6,000 jobs in Palmdale over the next five years.
The larger effort is to attract business to what state officials call “Aerospace Valley”--a cluster of military and industrial sites that stretch from Point Mugu Naval Air Station and Vandenberg Air Force Base on the California coast, through the Santa Clarita and Antelope valleys, and to the China Lake Naval Weapons Center near Death Valley.
“This is a disappointment but not a major one,” said Jack Kyser, chief economist for the Economic Development Corp. of Los Angeles County. “It also means we have to be alert and we have to be compelling when we are telling our story--quality labor force, availability of training programs, low cost and access to the amenities of the Los Angeles area.”
From 1988 to 1998, the state Legislative Analyst’s Office said, California lost 220,000 aerospace-related jobs while the industry’s share of the overall state economy dropped to 4% from 9%.
Lockheed is locked in a high-stakes competition with Boeing Co. for the contract to build the Joint Strike Fighter. Boeing is developing its own prototype at its Phantom Works--also based at Plant 42 in Palmdale.
The Defense Department has characterized the competition as winner-take-all. But on Thursday it said it wanted to make sure that the loser remains competitive and will convene a special panel to help it chart a future course.
Some aerospace industry analysts have said they believe the government will ultimately give a share of the work to the losing company.
In any case, both Lockheed and Boeing said they intend to build the fighter at plants outside California.
Bloomberg News contributed to this report.
