465 May Be Cut at General Dynamics

SAN DIEGO — General Dynamics will lay off as many as 465 of its 3,100 San Diego-based employees who design and build Atlas and Centaur rockets that carry defense and communications satellites into space, the company said Wednesday.

The layoffs, which will occur before Dec. 31, are a result of increased competition from domestic and foreign rocket manufacturers, said General Dynamics’ Space Systems Division spokeswoman Julie Andrews. The cuts are needed “to balance the size and skill mix of our work force with the realities of our marketplace,” Andrews said.

General Dynamics’ rocket-building and launch operation faces stiff domestic competition from McDonnell Douglas and state-sponsored operations in Europe, Russia and China. General Dynamics had hoped to dominate the industry that now is saddled with excess manufacturing capacity, analysts said.

General Dynamics has spent up to $1 billion to upgrade its rocket manufacturing and launch business but “it hasn’t really begun to see the return of any funds,” said Wolfgang Demisch,a New York-based industry analyst with UBS Phillips & Drew.”They’ve had some (recent) problems with launches . . . and people have not been breaking down the doors with orders.”

While General Dynamics’ Atlas rocket has been a dependable workhorse since the 1950s, its enviable launch record was blemished Aug. 22 when an Atlas-Centaur rocket failed to place a multimillion-dollar communications satellite in orbit. The failure will be costly if General Dynamics is forced to delay future launches and competitors can snare potential customers, Demisch said.

Andrews denied that the layoffs were driven by the recent failed launch, but Ed Maudlin, an executive with the International Assn. of Machinists, which represents some Space Systems employees, said his union understood that the cuts were “directly related” to the failure. A team of General Dynamics officials is reviewing what went wrong on Aug. 22.

General Dynamics has orders for 41 of its Atlas rockets, including nine from the U.S. Air Force. The Space Systems Division, which is committed to building 60 rockets, has yet to find buyers for the remaining rockets.

The San Diego-based division, which maintains launch facilities in Florida and at Vandenberg Air Force Base in California, also has 15 orders for its Centaur rocket. The Centaur serves as an upper stage for the Atlas and Martin Marietta’s Titan IV rocket.

The layoffs announced on Wednesday, which are in addition to 280 Space Systems jobs that were cut during the past year, is only the latest in a series of cutbacks announced recently at General Dynamics operations, past and present, in San Diego.

Last month, General Dynamics completed the sale of its San Diego-based missiles division to Hughes Aircraft Co., which subsequently said that it will move about 1,200 Tomahawk cruise missile manufacturing jobs to Arizona by April. Another 1,300 local jobs are expected to disappear by mid-1993 as production of the Advanced cruise missile winds down.

General Dynamics also is seeking buyers for its San Diego-based electronics division and an operation that manufactures commercial airliner fuselages for McDonnell Douglas Corp. General Dynamics Chairman William Anders last year said that the space division would not be sold off during corporate restructuring of the Falls Church, Va.-based defense contractor.

Word of the layoffs was “surprising,” given Anders’ commitment to keep the division, said Maudlin of the machinists association, which represents about 675 Space Systems employees. “This was not expected,” Maudlin said. “It seems all we hear from the company is something we’ve not expected.”