Cuts in the defense budget are beginning to send tremors through Southern California. Layoffs announced by two contractors last week were the latest blows to one of the economic engines of the region.
McDonnell Douglas said it will lay off 1,000 workers this summer. It had announced last month that 3,000 mostly white-collar jobs would be lost in the Douglas Aircraft Co. division, which lost $84 million last quarter.Also last week, Lockheed announced it would move its Burbank aeronautics unit to Georgia, eliminating 4,500 jobs in Southern California by the mid-1990s. Any new jobs would be moved to other parts of the country, the company said.
Lockheed said the move will save $75 million a year and is necessary to compete for dwindling government contract work.
Aerospace firms, vital here since World War II, will continue to look elsewhere because of the high cost of living and worsening environment in Southern California, combined with defense cuts, analysts say.
Statewide aerospace employment will fall from 361,000 in 1989 to 316,000 in 1992, according to a March report by the UCLA Business Forecasting Project. David Hensley, a UCLA economist, said this week the job figure will probably fall even more.
State Attorney General John Van de Kamp, a Democratic gubernatorial candidate, called for the U.S. government to invest $4 billion a year in "peace dividends" in California to help offset defense cuts.
"The U.S. defense budget is crumbling faster than the Berlin Wall," Van de Kamp said in a speech to the World Affairs Council in Los Angeles.
"We are feeling the first faint tremors in California. And soon the ground will shake beneath our state's economy."