Local employment at Orange County’s largest aerospace and defense contractors was flat in the past year in a wave of industry consolidation and increased spending on national defense.
The 33 largest companies added just 111 jobs in the 12 months through September, ending the period with 27,961.
Last year, employment at global legacy manufacturers to local suppliers rose 1.5%, or 348 positions. Employment declined in the previous two years.
Operations here include at least 62 local offices and sites that make various parts and systems for commercial and military aircraft, as well as weapons and testing equipment, among other products.
Companywide employment for the combined group hit 679,836, up 4% year-over-year.
Ten companies added local employees, and four made cuts. Two companies were flat, and 16 are Business Journal estimates or didn’t provide enough information for a year-to-year comparison. The list includes seven new companies.
Defense Boost
The annual tally comes during a defense funding push by President Donald Trump, who’s added more than $200 billion to the fiscal 2018 and 2019 budgets to $700 billion and $716 billion, respectively.
• Perennial No. 1, Chicago-based Boeing Co., hasn’t provided local employment figures for at least four years, instead disseminating only statewide employment at dozens of facilities. Our estimate of 6,000 local jobs may be high, considering it employed 12,619 in California last year.
The manufacturing giant, however, is hiring at its Seal Beach operation, home to Boeing Commercial Airplanes Customer Support, which has a team of engineers providing support to airplane operators around the world.
“It is a steady statement of work, and we have an ongoing need to attract and retain talent,” spokeswoman Paula Shawa said.
• Irvine-based Parker Aerospace moved up to second place with 4,582 local workers at its two Irvine operations, which handle production and assembly of fluid systems for commercial and general aircraft, and flight controls for military aircraft. Its facility on Alton Parkway near Irvine Boulevard also houses its customer-support division for all six of its manufacturing units.
It’s been getting particularly strong demand to outfit F-35 stealth bombers, according to E-business Manager Brian King.
“We’ll be doing three times the work down the road as what we’re doing today,” he said. “The F-35 is really ramping up.”
The Pentagon announced an $11.5 billion contract last month for 141 F-35 fighter jets from Lockheed Martin Corp.
Outfitters
• No. 3, Panasonic Avionics Corp. in Lake Forest, moved down one spot with an estimated 2,290 employees. Panasonic Corp., the Japanese parent of the global market-share leader for in-flight entertainment and communication systems, agreed to pay the Securities and Exchange Commission more than $143 million in April to resolve corruption charges and accounting-fraud violations involving its global avionics business.
According to the SEC, Panasonic Avionics initiated a bribery scheme to pay an official of an undisclosed state-run airliner $875,000 in order to secure two contracts with the airline valued at a total of more than $700 million.
In a related matter, the U.S. Department of Justice said the avionics unit will pay a criminal penalty of more than $137 million related to books and records violations.
Panasonic Avionics didn’t respond to inquiries from the Business Journal regarding the cases.
• TransDigm Group Inc. (NYSE: TDG) moved up six spots to eighth with an estimated 1,168 local workers. In March, the Cleveland-based company acquired Esterline Technologies Corp.’s Kirkhill Elastomers business in Brea for $50 million. Kirkhill makes specialty seals and other rubber components, primarily for the aerospace and defense markets.
The sale knocked down Esterline (NYSE: ESL) to 16th with an estimated 335 workers at its remaining operations in Buena Park and Rancho Santa Margarita. The Bellevue, Wash.-based company specializes in advanced materials, avionics and controls, and sensors and systems.
• No. 13, Huntington Beach-based EnCore Group, moved up one spot despite shedding 108 jobs down to 560, a 16% drop.
In December, the company unloaded EnCore Composite Structures, which operates a 120,000-square-foot factory in Brea, to Applied Composites, formerly AC&A Enterprises Holdings LLC, on undisclosed terms.
The Indianapolis-based company premiered on the list at No. 15.
EnCore is nearing $100 million in sales this year and is on pace to exceed $120 million next year, bolstered by a strong five-year backlog.
• No. 10, Cedar Rapids, Iowa-based Rockwell Collins Inc. cut 67 employees, ending the period with 917, down 67%.
The layoffs came last year after the company completed an in-depth review of the in-flight entertainment market, finding that the industry’s rapid adoption of aircraft broadband and wireless connectivity, and the decline and commoditization of single-aisle in-seat hardware hurt its business, according to spokesman Robert Edilson.
“This review led us to shift our strategy and investments to the broader connected aircraft and not invest in future in-seat video capabilities,” he said.
Another local shakeup could be in the works. The company is slated to be sold in a $23 billion deal to Farmington, Conn.-based United Technologies Corp.
• Irvine-based Astronics Test Systems remained 23rd, despite adding 19 jobs for 178, up 12%.
“Astronics Test Systems hired additional manufacturing and engineering over the past year to support our continued growth in providing system level test solutions to aerospace, defense, and semiconductor companies,” Marketing Communications Manager Elizabeth Flattery said in an email.
