Rohr Sees Round of Layoffs Ahead

SAN DIEGO â€”  Having already cut 2,000 jobs over the past 14 months, Chula Vista-based aerospace manufacturer Rohr Inc. said Wednesday that it may lop another 2,000 jobs, or 22%, from its remaining work force of 9,100 over the next two to three years if pessimistic business forecasts hold true.

The news is the latest blow to Southern California’s aerospace industry, which has witnessed the loss of about 100,000 jobs over the past three years, mainly because of cutbacks in military aircraft orders resulting from a tightened defense budget.

Rohr’s problems, however, have more to do with widespread cancellations and postponements of commercial airliner deliveries. After an unprecedented boom in the 1980s that lifted companies such as Rohr to new revenue heights, the commercial airline industry has been hit hard by an oversupply of jets and the recession.

A manufacturer of jet engine rings, nacelles and other components, Rohr sells about 86% of its products to commercial airline manufacturers and the rest to makers of military aircraft.

Rohr’s problems are typical of the commercial airliner industry, which is in for a prolonged slump, said Jerry Cantwell, an aerospace analyst with Wertheim Schroder & Co. He estimated that the dollar value of aircraft deliveries in 1995 may be down 30% to 40% from the 1990 peak.

Airlines and aircraft leasing companies that made overly optimistic orders for planes on the basis of projected growth in passenger traffic are now having to cancel or postpone those orders because traffic has fallen short, said Barbara Beyer, president of Avmark, an Arlington, Va.-based aviation consulting and publishing firm.

Airlines and leasing companies canceled orders for delivery of 117 airliners in 1992 and 122 planes so far in 1993, the highest levels of cancellations since the early 1980s, Beyer said. “Megalessor� GPA Group recently canceled options for 267 aircraft, worth $9 billion, Beyer said.

“The airlines are losing money and are trying to give orders back,� Cantwell said. “It’s always been a boom-and-bust industry. The boom was in late 1980s; the bust began in 1991 and will continue over the next two to three years.�

In the past, Rohr and manufacturers depended on commercial and military aircraft markets being “counter-cyclical�: When one was down the other was up. But defense budget cutbacks have stunted military orders at the same time that the commercial jetliner market has softened, Rohr spokesman Mark Bergherr said Wednesday.

Rohr now is in the process of shutting down its operation that manufactures components for the F-14 fighter plane for the Navy. The F-14’s prime contractor, Grumman, has been told to stop manufacturing the plane altogether, Bergherr said. Rohr makes 25% of the F-14’s airframe, he said.

The cuts would affect a broad range of Rohr employees, from assembly-line workers to salaried employees. Chula Vista workers probably would absorb about half, or up to 1,000, of the job cuts, although Rohr stressed that specific cuts will depend on the status of individual production programs.

Rohr Chairman Robert Goldsmith informed employees of the impending layoffs in meetings at Rohr’s Chula Vista and Riverside plants Friday and Monday.

Rohr employment has been steadily declining since July, 1989, when it hit a peak of 12,100, of whom 7,031 were working out of Rohr’s Chula Vista complex of plants and offices.

Of Rohr’s overall payroll totaling 9,230 this past July, 4,748 workers were based in Chula Vista. Since July, the company has laid off an additional 100 workers, Bergherr said.