300 to Be Laid Off by McDonnell Douglas Space Unit

HUNTINGTON BEACH —  McDonnell Douglas Space Systems Co., manufacturer of the Delta II rocket, said Friday that it will lay off about 300 employees by early February because of a decline in the commercial space business.

The layoff totals 2.5% of the McDonnell Douglas Corp. division’s 11,959 employees and includes 200 workers in Huntington Beach. The reduction is intended to streamline the company’s operations as Space Systems prepares to compete for a dwindling number of rocket-launching contracts in the future, said Tom Williams, a company spokesman.

The Delta rocket, which launches military and communications satellites into orbit, has been the mainstay of the compa ny’s business for years. More than 200 Delta rockets have been launched since 1960.

Williams said the company expects to launch only eight Delta II rockets during 1991, down from an expected 11 launches during the year. He said the company will also make fewer fairings--the rocket tips that carry satellite payloads--for other aerospace companies.

After shutting down its Delta production line in 1984 because of a shortage of contracts, McDonnell Douglas reopened the line in 1987 after winning a $316.5-million contract to launch Air Force navigation satellites.

Hoping to take advantage of an expected boom in commercial space launches after the space shuttle Challenger disaster in 1986, the company has launched more than 20 Delta rockets since then.

However, the initial boom in commercial space business has faded and the company faces tough competition from lower-cost rocket makers in Europe, China and elsewhere.

Williams said the company will launch five commercial satellites in 1991, but may launch only three Global Positioning System satellites for the Air Force this year. The company had expected to launch five Air Force satellites, he said.

The layoffs will include both management and production workers. Employees will be notified of the layoffs Friday and laid off on Feb. 8, Williams said.

The layoffs are the first at the Huntington Beach unit since 400 employees were laid off last July as part of job cuts by the parent company.

The Huntington Beach unit is also a prime contractor on NASA’s space station Freedom. Williams said the company has not ruled out additional layoffs in Huntington Beach or other sites if federal funding for the space station is significantly reduced.

At the request of Congress, the National Aeronautics and Space Administration has slashed $6 billion from the space station’s $37-billion budget and ordered the agency to design a simpler version of the project.

The redesign is expected to be completed within the next several months.

A contracting team led by McDonnell Douglas holds $4 billion worth of contracts for the space station, mostly related to the construction of a large truss structure that spans the length of the station.