Boeing declares big cuts

Dave Brooks

As many as 1,100 engineering jobs could blast off from Huntington

Beach and touchdown near Denver, marking another significant shift in

the city’s economy.

Officials with Boeing, the largest employer in the city, announced

plans this week to combine its Delta rocket program with aerospace

rival Lockheed Martin into the new “United Launch Alliance,”

following a merger agreement with government officials to lower

manufacturing costs.

That means the Delta program will no longer be headquartered on

Bolsa Avenue in Huntington Beach, and the 1,100 employees working at

the center could be transferred to Denver, moved to different

positions in the company or see their jobs eliminated.

The announcement is another push of the Huntington Beach economy

away from the aerospace industry into tourism, action sports,

technology and smaller-scale manufacturing. In April, aerospace

consultants GST Industries announced plans to move operations from

Huntington Beach to Mesa, Ariz., citing the prohibitive costs of

doing business in this area.

Boeing’s reasoning is slightly different, explained company

spokesperson Robert Villanueva. He said the Pentagon and NASA

officials had been pressuring the company to work with rival Lockheed

Martin to lower production costs. Both companies were already seeing

a drop in demand for commercial launch opportunities and have become

more reliant on government contracts.

“Over the years the commercial market has vanished and both

companies were really in need for government revenues,” Villaneuva

said, adding the merger would save the government about $150 million.

“This deal makes it easier for the government to get a rocket,

purchase a rocket and launch a rocket,” he said.

What will happen to Huntington Beach employees working on the

rocket program remains unclear, but Villanueva said the remaining

5,000 Surf City employees will continue to design weapons for the

army, work on the space shuttle program and develop global

positioning systems technology.

Delta employees might be shifted to one of Boeing’s 35,000

positions in Southern California, Villanueva said.

“If the employees don’t want to transfer to Denver or Alabama

(where the rockets are manufactured), there’s a good possibility that

there are opportunities elsewhere here in Southern California,” he

said.

The effect of the potential loss of 1,100 high-wage, high-skill

jobs remains unseen. Former Huntington Beach Economic Development

Director David Biggs said the move of Boeing manufacturing jobs in

Huntington Beach to a plant in Decanter, Ala. several years back

caused a similar loss in jobs, but fears about an economic downfall

largely didn’t materialize, he said.

“Unless they totally eliminate their campus, they’ll likely be

able to backfill most of the positions,” he said.

The Orange County economy is diverse enough to compensate for any

major manufacturing shift, Biggs added, pointing out that many

technology firms and light industrial groups are looking to expand in

the area and absorb new opportunities. Orange County is also seeing

its presence as a tourism destination increase, while the popularity

of surf companies like Quiksilver continues to grow.

“We also have to remember that while Boeing is the largest

employer in Huntington Beach, they’re not a huge percentage of the

local employment base,” Biggs said.

Huntington Beach business development director Jim Lamb had

similar sentiments, saying that many former industrial sites in

Huntington Beach like the old McDonnell Douglas headquarters have

been redeveloped into thriving business centers.

“It’s not a bad silver lining to an otherwise dark cloud,” he

said. “It’s an opportunity to take industrial land and diversify our

industrial base.”

* DAVE BROOKS covers City Hall. He can be reached at (714)

966-4609 or by e-mail at [email protected].