O.C. Firms Say A-12 Cancellation to Bring Layoffs, Reshuffling

IRVINE —  Several Orange County companies said Thursday that the Pentagon’s surprise cancellation of the Navy’s A-12 attack plane this week will result in layoffs or the reassignment of employees to other jobs.

The loss of the $57-billion project comes as many local aerospace contractors are facing cutbacks because of reduced defense spending and are struggling because of the slumping economy.

McDonnell Douglas Corp. in St. Louis and General Dynamics Corp. in Fort Worth were the project’s primary contractors. The companies said they will immediately begin laying off up to 9,000 workers in St. Louis, Fort Worth and Tulsa, Okla.

In Orange County, Parker Bertea Aerospace, an aircraft parts manufacturer, confirmed that its business will be affected. In a statement, however, the Irvine subsidiary of Cleveland-based Parker Hannifin Corp. said it foresees no “large layoffs” or plant closings in the “near term” because of the cancellation.

Parker Bertea did subcontracting work for the A-12 program and will try to reassign some workers from that program to other jobs. The company declined to comment on the extent of its A-12 work, the number of jobs tied to the program or whether layoffs would result from the cancellation.

Secretary of Defense Dick Cheney on Monday canceled the A-12 program, saying the aircraft’s builders had so badly mismanaged the program that they could never live up to their contract terms. It is the biggest Pentagon program ever to be canceled.

The government had already spent $3.1 billion on the program, but cost overruns on the fixed-price contracts could have forced a government bailout of the contractors. The prime contractors plan to appeal the decision and to try to recoup their costs associated with program development.

Because the program never entered full production, much of the work lost represents future business. Parker Bertea had been working on the highly classified program since its inception.

“This could have a long-term effect” on Parker Bertea, said Cheryl Morosco, a company spokeswoman. In the last year, the company cut 10% of its work force in anticipation of a decline in military contracts. It now employs 3,000 people.

Morosco said the cancellation will affect business that Parker had anticipated from the A-12 program. The radar-evading A-12 was designed to replace the Navy’s aging fleet of A-6 Intruders as the Navy’s main carrier-based attack aircraft.

Tom Newell, vice president of sales and marketing for Aluminum Precision Products Inc. in Santa Ana, said his company will reassign several workers who had been building machine tools for the program, but he said the real damage will be in lost potential.

“This won’t mean any layoffs,” he said. “At some point, we could have supplied tools to do some of the work they were planning, but the program was never big enough.”