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S.D. Aerospace Sector Brings Home Business and Good Jobs

The number of aerospace workers in San Diego County has snowballed over the last decade to slightly more than 12,000, according to a new report.

General Atomics Aeronautical Systems Inc., Northrop Grumman Corp., UTC Aerospace Systems and ViaSat Inc. all appear in the new study jointly released by the Los Angeles and San Diego economic development corporations.

Those big companies and many smaller players helped the sector gain 4,820 jobs between 2004 and 2014. San Diego drew employment from both Los Angeles and Orange counties, study authors said. During the same time period, Los Angeles and Orange counties lost one quarter of their jobs. In greater Los Angeles, 2014 job counts were 78 percent of 2004 levels (the closure of Boeing Co.’s C-17 plant in Long Beach played a role in that). In 2014, Orange County had 73 percent of the aerospace employment it had a decade earlier.

Study authors noted that Southern California companies benefit from the presence of SPAWAR — the U.S. Navy’s Space and Naval Warfare Systems Command — along with Los Angeles Air Force Base and Jet Propulsion Laboratory. Also helping are topnotch universities and nearby military training ranges.

Southern California, from the Mojave Desert south, employs 85,000 aerospace workers.

Salaries for aerospace workers are well above the average Southern California annual wage of $53,597. In fact, there is quite a range. At the low end is $70,575 — the average wage in the aircraft parts industry. At the high end is $130,428 — the average wage in guided missiles and space vehicle manufacturing.

As in many industries, the study said, greater efficiency is driving down the number of workers.

The recent award of the Long Range Strike Bomber (now known as the B-21) to Northrop Grumman “will lead to significant increases in activity across the state,” the report said. Though Northrop’s competitors protested the award, they were not successful.

The aerospace employment report is available online at http://bit.ly/1LNpEmx.

GA-ASI is an affiliate of privately held General Atomics. Northrop Grumman stock trades on the New York Stock Exchange as NOC. UTC Aerospace is part of United Technologies (NYSE: UTX). ViaSat trades on the Nasdaq as VSAT.

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Planning for Obsolescence: When a business sets out to make a complex machine with thousands of parts, it’s a good bet that some of those parts will go obsolete, and the business will have to find substitutes. The Defense Department plans for that.

The Navy recently placed a $15.2 million order with Northrop Grumman to deal with obsolete parts on the Triton unmanned aircraft. The Navy version of the Global Hawk high-altitude surveillance aircraft is transitioning from the engineering stage to early production.

The Triton contains thousands of parts. Sometimes a supplier will discontinue a certain part, component or processor, a Northrop spokeswoman said. At that point, company representatives have to hunt down an equivalent and test it to make sure it meets Navy requirements. “We don’t have a list of parts that do change, because it is a constant cycle in development,” said spokeswoman René Freeland.

In the official contract award notice, the Pentagon said it was spending its $15 million “to procure mitigation requirements to address diminishing manufacturing sources/material shortages issues and obsolescence.” Northrop will split the work between San Diego and Maryland, with 7 percent going to Salt Lake City. Work will last through October 2017.

• • •

Two U.K. Deals: The U.S. Navy awarded BAE Systems San Diego Ship Repair a $28.2 million contract modification for work on the Arleigh Burke-class destroyer USS Higgins. The program of depot-level maintenance, alterations and modifications will run through November. The Southwest Regional Maintenance Center awarded the work in early March.

The BAE shipyard, just south of the San Diego-Coronado Bridge, is part of U.K.-based BAE Systems PLC. The corporation reported 2015 sales of about $26.5 billion. Shares trade on the London Stock Exchange under the symbol BA.

Meanwhile, Serco Inc., the U.K. company with its local office on Kearny Mesa, was awarded a no-bid contract to manage hazardous materials for the Navy. The one-year deal with Fleet

Logistics Center San Diego has a $9.4 million ceiling, but could stretch to five years (and $47 million) if the Navy exercises all of its options. Serco says it has done such work for the Navy for 14 years. Its employees will buy, track, stock and provide “hazmat” items on request across the Navy’s Southwest Region, with 60 percent of the work expected at San Diego County bases. Serco staff will also identify substitutes for hazardous materials where possible. The Pentagon said that there was only one responsible source for the contract; therefore there was no competitive bidding. Parent Serco Group PLC had $5.9 billion in revenue.

Britannia may no longer rule the waves but it nevertheless gets a piece of the Pentagon budget.

• • •

Short Takes: Lockheed Martin Corp.’s F-35 Lightning II fighter aircraft surpassed 50,000 flight hours in February. Northrop Grumman builds software-defined radios for the program in North County. … Finally, an item for San Diego’s large cybersecurity workforce. The Defense Department will soon offer a “bug bounty” under its Hack the Pentagon program, set to begin in April. Yes, it really is inviting white hat hackers to search Defense Department code for software bugs. Yes, there will be rewards. No, it will not involve testing the department’s critical, mission-facing systems. Interested? The Pentagon promised more details soon. You will need to register and submit to a background check.

Send San Diego defense contracting news to bradg@sdbj.com.

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