SAN FRANCISCO AND BURBANK, CALIF.
EVERY week for the past 18 months, "retired" aerospace engineer Frank Willis has stopped here at the Verdugo Job Center to scan job offerings, make free phone calls, and photocopy his resume.
"The job market just isn't there," complains the former electrical-design specialist for Lockheed Corporation. Out of work since August 1990, when the US Navy canceled plans for a new patrol aircraft, Mr. Willis has landed only two job interviews despite 32 years of experience.
"The commercial sector looks at aerospace [workers] as overpaid and overqualified," he says. "They think we're the guys who design $600 toilet seats for the Pentagon."
As the United States cuts back its military, the nation's defense industry faces some stark choices: scale back, close down, or try to make the difficult transition to the civilian economy.
The defense industry has endured downturns before: after World War II, the Korean War, and Vietnam. "It's usually boom and bust" in the defense industry, explains David Lewin, director of UCLA's Institute of Industrial Relations.
Now, the bust looks permanent. The defense industry, which has already retrenched, faces even bigger cutbacks as the threat of Soviet aggression recedes and budget pressures mount. President Bush is expected to deliver the next blow Jan. 28 in his State of the Union address. According to press reports, the president will halt production of the B-2 bomber at 20, rather than the 75 that the Air Force wanted. The move could save taxpayers up to $25 billion, but it is a major blow to Northrop Corporation, wh ich makes the plane, and the southern California economy.
California has already lost 150,000 defense and defense-related jobs since 1987. But economists predict even deeper cuts: another 250,000 to 375,000 such jobs in the next five years. New England's many defense contractors face similar woes.
"It is an extraordinary transition," says Daniel J. Shine Jr., director of aviation, aerospace, and defense consulting at Arthur D. Little Inc. "There are going to be a lot of people out of work.... I could see a 30 to 40 percent drop in the defense industries in the next five years."
To survive, defense companies employees are looking for work in the civilian sector. That transition is never easy. It is complicated this time by recession.
Consider the plight of UNC Manufacturing Technology (formerly UNC Naval Products) of Uncasville, Conn. Notified two years ago that the Navy would no longer buy its nuclear reactors for Navy ships, the company hired Arthur D. Little to find civilian industries where it could compete. Of 800 potential leads, the consulting firm found only half a dozen real possibilities. Of those, the company may be able to capitalize on two or three.
"It's difficult," says the company's general manager, Bruce Andres. "You're in a situation that any market that you try to get into, there's already a company there who has been doing it longer than you and, initially at least, is doing it better than you," UNC Manufacturing Technology used to employ 1,200 people. Now, it has between 100 and 150.
"The newly created entity will be but a shadow of what it was," Mr. Shine says. And "these guys are considered successes!"
Making the transition depends on geography and expertise. New England and southern California face tougher times than northern California. Aerospace is worse off than defense electronics.
"Defense electronics is on a little firmer ground" than aerospace, says Jonathan Leonard, a management professor at the University of California, Berkeley. That's one reason northern California, with its concentration of electronics firms, is faring better than southern California, which is far more reliant on aerospace.
The transition to civilian work also requires a different mind-set.
"There's a concern about hiring defense contractors," says Henry Riggs, president of Harvey Mudd College, an engineering school in Claremont, Calif. "They just have a different approach to the business of engineering. If you're brought up in the necessary bureaucratic situation [of Defense Department work], it's hard to change your spots to get into the competitive fray."
Back at the Verdugo Job Center, a group of laid-off aerospace workers is listening to a pitch for a hazardous-waste and environmental-cleanup course. The class trains laid-off aerospace workers for jobs as hazardous-waste technicians.
Mr. Willis was among the first 29 students enrolled and says that though the so-called "haz-mat" field is burgeoning, it takes a minimum of five years of training and finding one's niche to make a successful transition.
In the meantime, he keeps pounding the phones and sending out resumes.
"Aerospace is a different bird," says Judith Trester, a vocational counselor for the job center. "The skills these employees have developed [in aerospace] are just not very transferable. Many of the skills are out of date for what the commercial sector is doing now."
The federal government is picking up the tab for this job retraining and placement center, which Willis says replaced a similar program dropped by Lockheed. In the old days, large aerospace companies such as Lockheed and Hughes Aircraft hired workers and gave them training on the job, Ms. Trester says. Now, these workers will have to take responsibility for their own training if they are to move into the civilian sector.