Boeing cancellation would mark end of era in California

By Gary Gentile, AP Business Writer
Monday November 05, 2001

LOS ANGELES – California’s love affair with the car is rivaled only by its love affair with the airplane. 

From 1910, when the first international air meet was held just south of Los Angeles, to the 1947 flight of Howard Hughes’ “Spruce Goose,” to the design of the next-generation Joint Strike Fighter, California has played a key role in world aviation history. 

So a decision by the Boeing Co. to end production of its 717 passenger jetliner in Long Beach would have an impact far beyond the jobs lost. The Boeing 717 is the last passenger plane built in the state that produced one of the first, the historic DC-1 built by Douglas Aircraft in 1933 for TWA. 

“Since the 1910 Los Angeles County air meet, flight has been a central metaphor for Southern California,” said California state historian Kevin Starr. “It’s part of the DNA code of Southern California economically.” 

Boeing, which inherited the 100-seater airplane program when it acquired McDonnell Douglas in 1997, said last month it is considering scrapping the money-losing line. The company said it will decide the fate of the plane and 4,500 workers at the Long Beach factory that assembles it by the end of the year. 

To be sure, the disappearance of commercial airline manufacturing in the state would not signal the end of the aerospace industry here. Boeing still remains the largest private employer in California, and firms such as Northrop Grumman are hiring as they prepare to manufacture the Joint Strike Fighter, the richest defense contract in military history. 

California also remains a center of research and manufacturing for satellites, the space program and the military. 

The Jet Propulsion Laboratory in Pasadena, Lockheed Martin’s “Skunk Works” research park in Palmdale and the high technology companies in the Silicon Valley are all heirs to a tradition pioneered by such names as Glen Curtiss, Jack Northrop and Donald Douglas. 

Even if 717 production is halted, it might be years before current orders are filled and the last jet leaves the production line. Midwest Express recently placed an order for 20 717s to be delivered one per quarter starting in 2003. The contract also includes an option to order another 30 planes. 

“We’ve been assured by Boeing that they intend to fulfill the contract,” Lisa Bailey, a Midwest Express spokeswoman said. “What that means, I don’t know yet.” 

The end of the Boeing 717 would come at the end of a long decline in aerospace manufacturing jobs, especially in Southern California. 

“The lower end of the defense industry, the metal-bending part, has been leaving over the last 20-30 years,” said Joel Kotkin, a senior fellow at the Davenport Institute for Public Policy at Pepperdine University. 

That exodus reached a high point in the early 1990s, when the Los Angeles area lost more than 200,000 jobs as defense spending was cut. Since then, the area has diversified its economy and is much less dependent on military spending. 

On the commercial side, final production on major planes has been leaving the state for years. In the early 1980s, Lockheed shut down the Burbank assembly line that produced the big L-1011 TriStar airliners. 

The main body section for the Boeing 747, however, is still assembled in Hawthorne. 

The massive aircraft factory in Long Beach was built in 1940 by Douglas Aircraft to build warplanes. After Boeing merged with McDonnell Douglas, the company phased out production of the MD11, MD80 and MD90. The last of the planes rolled off the assembly line earlier this year. 

Today, most of the complex is shuttered, except for those used for final assembly of the Boeing 717. A separate facility is used to assemble giant C-17 cargo planes. 

Analysts say it is more likely than not Boeing will scrap the 717. 

There are more than 60 of the planes operated by regional airlines for flights of between 300 to 500 miles. Earlier this year, Boeing announced the elimination of 1,200 jobs in Long Beach because of lower than expected orders. 

“For Boeing to make a public statement that they’re mulling the future of the aircraft, it’s a fairly strong statement about their intentions,” said Joseph Nadol, an analysts at J.P. Morgan. “It’s a good aircraft and it’s a hot segment. But demand hasn’t materialized as quickly as the company needs.” 

Boeing officials in California say they are awaiting the fate of the program as nervously as workers and city officials. 

“This is a new review and a new process,” said John Thom, a Boeing spokesman. “Down here, we’re keeping our fingers crossed that we can continue production and go on for years and years.” 

The Long Beach plant employs 4,500 workers on the commercial side, about 1,000 of which maintain a service department for older planes. It is not clear whether Boeing would close the plant or convert it to other uses. 

About 8,000 work in Long Beach, Palmdale and other plants building the C-17. That program may expand if the military orders more of the planes as expected. 

During World War II, the complex was camouflaged, as were similar plants in Santa Monica and elsewhere, by placing a mock rural village on the roof. Historical footnotes such as that make the fate of the program more poignant for Californians. 

“It’s like a death in the family,” said Jack Kyser, chief economist for the Los Angeles Economic Development Corp.