Northrop to Close Hawthorne Site, 3 Other U.S. Plants

Northrop Grumman Corp. said Wednesday it plans to close its defense electronics site in Hawthorne and three other U.S. plants, and eliminate 755 jobs, to further streamline its operations and rid itself of 2.5 million square feet of excess factory space.

The moves come even as Los Angeles-based Northrop is reportedly competing against Raytheon Co. and bidding more than $9 billion to buy the sprawling defense assets of cross-town rival Hughes Electronics Corp.

Both actions illustrate the relentless consolidation of the defense industry in the face of shrinking Pentagon spending, as the field’s remaining players try to enhance their surviving positions in the market.

The actions also are a reminder that more layoffs are likely at Hughes’ defense group, regardless of which company buys it, because the mergers are designed to eliminate the partners’ overlapping functions, wring out their excess production space and cut costs.

Northrop, the nation’s fifth-largest defense contractor, will cut 530 jobs in Hawthorne alone, or 3% of its total California work force of 16,000, by the end of the year. They’re unlikely to be the company’s last. Its Pico Rivera plant, which employs nearly 5,000, is scheduled to close by 1999 when Northrop’s production of the B-2 Stealth bomber ends.

That would only exacerbate what is already a severe economic problem in southeast Los Angeles County that was triggered by the aerospace bust, according to a report being released today by a local civic group.

The group--called the Southeast Los Angeles County Economic Development Alliance, and including not only Pico Rivera but also Long Beach, Lakewood and 24 other communities--said its region has lost 60% of its aerospace jobs since 1988, making it one of the areas hardest hit by the industry’s downturn.

The group’s report says the region must adopt a variety of public and private initiatives to relocate workers and rebuild its economy, such as export-assistance programs and improved job training and business development programs.

Only about 240 of Northrop’s 770 workers at the Hawthorne site will be offered transfers, the company said. Most of the work at the plant, which makes aircraft guidance and navigation systems, advanced antitank weapons and other defense electronics, will be shifted to plants in Rolling Meadows, Ill., and Benton Park, Pa.

The Hawthorne workers who lose their jobs will be offered job placement assistance, the company said.

“We regret that these actions will result in the loss of jobs, but they are necessary if we are to meet the affordability demands of our customers and win new business,” Northrop Chairman Kent Kresa said in a statement.

Northrop continues to operate other plants in Hawthorne--the largest of which builds fuselages for Boeing Co.’s 747 commercial jetliners--and those sites still employ about 2,800 people.

The other plants to be closed by Northrop include a defense electronics plant in Great River on Long Island, N.Y., by midyear; a commercial-aircraft plant in Stuart, Fla., by the end of 1998; and a similar plant in Perry, Ga., within two years. Production at all those sites will be transferred elsewhere.

Northrop, which employs 46,600 worldwide, said the plant closures and job cuts would require the company to take a pretax charge of $90 million against its earnings for the fourth quarter of 1996.

After the announcement, the company’s stock closed at $77.625 a share, down 50 cents, in New York Stock Exchange composite trading.