Job Loss Likely in Lockheed-Northrop Deal

While Lockheed Martin and Northrop Grumman work to quell Pentagon objections to the companies’ planned $11.6-billion merger, an Irvine economist fears that post-merger consolidation could affect many of the 50,000 jobs at the firms and affiliated businesses in Southern California.

Peter Navarro, an economics professor at UC Irvine, is urging state and federal lawmakers to intervene to prevent another large-scale aerospace job exodus.

“Aerospace is an important part of the region, and there are some big things at stake here,” Navarro said. “But there doesn’t seem to be any inclination by the politicians to do anything proactive to protect the job base.”

Northrop Grumman employs more than 15,000 workers in its Southern California plants, most in aircraft production. Lockheed Martin is also a formidable airplane maker, and between them, the companies operate seven major assembly plants.

The companies, which announced the deal last summer, say the merger would save about $1 billion in costs per year, much of it by combining computer and other corporate functions. But the savings would also probably come from plant consolidations and job cuts.

In particular, industry watchers have speculated that Northrop Grumman’s F/A-18 fighter production, with about 3,000 workers in El Segundo, could be combined with Lockheed Martin’s fighter operation in Texas.

Few see any savings in moving Northrop’s 747 fuselage program, which employs about 2,200 people in Hawthorne, because the company is rushing to step up production rates and recently spent $100 million on new equipment.

The two companies have given few details about their post-merger plans.

“The only thing we’ve said is that, if the merger is completed, then the [Northrop] corporate office would close,” said Jim Taft, a Northrop spokesman. The rest, he said, would be disclosed 90 days after the deal closes.

Northrop’s corporate staff includes about 320 employees at its Century City headquarters and about 110 employees in El Segundo, Taft said, adding, “It’s fair to say that those people would be subject to layoff . . . but not all those people will be laid off.”

With or without the merger, more than 4,000 workers in Pico Rivera and Palmdale will be laid off by 2001, as production winds down on the B-2 bomber. The remaining 2,000 to 2,500 employees would stay on a few more years, Taft said.