Election Section

Fighter work won’t rejuvenate California aerospace sector

By Gary Gentile, The Associated Press
Saturday October 27, 2001

LOS ANGELES — The Joint Strike Fighter program may be the single largest defense project in history, but its impact on California’s economy will be a far cry from what it might have been in the 1980s, when the state was the center of the national aerospace industry. 

Most of the work on the $200 billion fighter project will be done at the Lockheed Martin Corp. plant in Ft. Worth, Texas. 

Friday, the Department of Defense awarded Lockheed the contract to develop the next-generation, supersonic stealth fighter. Lockheed will be the lead contractor, working with Northrop Grumman Corp., based in Los Angeles, and BAE Systems of Great Britain. 

Northrop Grumman said the award will mean a total of 1,600 new jobs for the company across the nation, with 1,200 in California. Officials declined to estimate the financial impact of the award on the company. 

Most of the California jobs will be in El Segundo, where Northrop will design and assemble the plane’s center fuselage. 

Lockheed competed with Boeing Co. for the contract. But no matter which company received the lucrative contract, tech companies in California were expected to benefit from subcontracting work.  

Still, the impact will be nowhere near what it would have been a decade ago, when Southern California was heavily dependent on defense spending. 

“It seems likely this is the beginning of a very slow upturn, but not the beginning of defense dependence or anything like that again,” said Stephen Levy, an economist at the Center for Continuing Study of the California Economy. 

Levy said the 1,200 new jobs in the state must be seen in the context of the 280,000 defense jobs that left California in the 1990s. 

“Getting hotel occupancy back up again will have a far greater economic impact than this,” he said, referring to the current collapse of the state tourism industry. “But it should have some confidence-building impact in terms of Southern California remaining a place to do business for this kind of work.” 

Northrop Grumman is the last big defense contractor with headquarters in California. With a handful of other firms, it will likely benefit from a general increase in defense spending as the country fights its new war on terrorism. 

“We have ongoing expertise in military satellite capabilities and defense systems that might be part of a national missile defense system, which seems to have a head of steam now,” said Tom Lieser, senior economist for the UCLA Anderson Forecast. “The impact on the companies may be more significant than the impact on the economy.”