European Stars and Stripes (Newspaper) - July 30, 1990, Darmstadt, Hesse                                An Electron assembler puts together a circuit Board for the m1a1 Battle tank at Hughes aircraft in Burbank Calif. By the mid 90s, Hughes will have 40 percent non military business. The pea c e defense cutbacks Zap . Aerospace Industry by John Barbour associated pressuring world War Al there was serious talk of moving americans aviation Industry 200 Miles Inland away from the ominous shadows of japanese submarines one of which already had fired some shells at the California coast. Now 50 years later Mikhail Gorbachev is doing what the fear of japanese subs failed to do. By quelling cold War anxieties the threat of imminent attack he has shaken the National commitment that made the . Aerospace Industry the most advanced in the world. In California the Bank of America estimates projected defense cuts will Cost the state 38,000 defense jobs a year. In fact the state has been losing about 25,000 jobs a year since the late 1980s. Today s descendants of Rosie the Riveter used to the fickleness of government contracts May have to face the fact that Many War jobs will be lost forever. The defense giants Are looking belatedly to direct their expertise to new More peaceful products and services from rebuilding commercial aircraft to producing subway cars. Meanwhile in cooperation with the state they Are working out a computerized Job Bank and retraining program to relocate the skilled hands that Are idled and can draw As much As $144 a week in unemployment compensation. Lockheed faced with the abbreviation and the completion of defense contracts from the stealth fighter to the Orion anti submarine patrol plane has let go More than 10 percent of its 22,500 plane builders. More to follow. Almost across the Board the aerospace giants Northrop general dynamics Rockwell Mcdonnell Douglas and Hughes aircraft now part of general motors have been feeling the Pinch since the defense department began cutting Back programs in 1985. And not just the aerospace giants but the myriad Little subcontractors that feed them parts. One estimate is that some 80,000 Small firms in California have either folded or shifted to non defense business in recent years. Defense does no to offer much immediate help for most of them. Lockheed is a Case in Point. It sees nothing new on the defense horizon until 1996. So it is shifting much of its plane building capability to Georgia closing a factory Complex in Burbank Calif., that has been producing planes since world War ii. By 1994 that will leave Barren some 325 acres of prime land it owns in the los Angeles suburb which probably will sell for about $1 million an acre. The current crisis is reminiscent of defense cutbacks after the korean and Vietnam wars and the space program cutbacks in 1968, when the Man who designed the system that kept Mercury and gemini astronauts alive in space found himself pumping  in a los Angeles sen ice station. Lockheed has Only one aircraft contract in House after four reached completion or were Cut Back although it has ample contracts in missiles and space Agency work As it has since 1962, it still turns out c130 Hercules transports at the Marietta ga., Plant a at the rate of 40 or so a year a and that will continue through the decade. But gone is the Navy s p3 Orion anti submarine patrol plane although it is building six More for foreign buyers. Last april Lockheed built the last of 50 c5b transports for the air Force and last october the last of 35 air Force reconnaissance planes. By the Middle of this summer it will Complete the last of 59 air Force stealth fighters. So Lockheed As other aerospace companies is looking for new business some of it in areas in which it has never ventured. Quot change is not new in the Industry Quot says Alan Chase in charge of a Small group charting Lockheed a future a but this cyst is probably going to take us to the deepest Valley that we be seen in a Long time. Quot As the Cycle has gone up and Down from Korea to ,4fiere s always been a perception of a soviet threat. The cold War was always there. In this Cycle there is the feeling in Congress that the cold War is Over and the soviets and the Warsaw pact Are no longer much of a  Lockheed is planning to stay in the defense business Chase says but the mix will change from 75 percent defense and 25 percent civilian Effort to 65-35. Quot the prediction of the department of defense Quot Chase says Quot will be to emphasize the instability in the world but its going to be hard to sell expensive programs based on instability As opposed to a real threat from the soviet  Hughes aircraft is somewhat More fortunate than most since no single contract constitutes More than 5 percent of its sales Dollar. But it too is looking for a More equitable mix Between military and civilian business now running 80 percent military. It will eventually become 40 percent non military by the mid-1990s. Quot companies need to make their own judgments Quot says Hughes president Kenneth Richardson. Quot it seems to me the whole nature of the defense business is already changing very rapidly. I think it was going to do that whether or not Gorbachev did what he did. It was going to have to take new approaches for various complicated reasons there Are probably too Many people in the Industry with a lot of overlapping capability and excess capacity. Quot one thing the Public fails to appreciate is that the defense budget has been in actual decline for the last five years. Most of the change comes out of the procurement part new hardware which is what we  roughly a third of the defense budget goes to pensions for retired people. Quot you can to decrease that or you d have a revolution Quot Richardson says. Another third maintains present forces including troops committed overseas. Quot and that s subject to a lot of emotions. You have a lot of people who Are committed to a career in service so you have to sort of pay them off Quot he says. There is an expense in that too Richardson agrees but what happens if you carry them to retirement you can pay them now or pay them later. Catch 22, the irony is that the defense establishment has been a Reservoir of Opportunity for military men seeking a second career after their service. Now that Reservoir is drying up although Many former military officers among them Alan Chase and James Abrahamson Are already in the corporate ranks of the aerospace Industry. Chase was a West Point graduate who found his Way into the air Force and served in Vietnam and in research and development in the Pentagon. He is currently looking for peaceful outlets for Lockheed s expertise. Abrahamson a retired air Force lieutenant general and a Veteran of 33 years has a similar Job As executive vice president for corporate development at Hughes. He was head of the strategic defense initiative or Star wars. A further irony in the game of peace catching up with War is that Japan airlines has Given Mcdonnell Douglas a $2.2 billion contract to build 10 md-11 airliners with an option for 10 More. It also contracted with Boeing for 20 747-400 aircraft added to 20 already in production and an option on 20 More in All a $12 billion Deal hard on the heels of those orders China booked 33 commercial jets from Boeing world $2 billion and took options on 36 More. So the Industry that grew to maturity after Pearl Harbor is finding some new markets for its peacetime products monday july 30, 1990 the stars and stripes Page 13