ST. LOUIS, AUG. 6 -- General Dynamics Corp. today announced a consolidation of two California defense-related divisions that will result in 1,500 to 2,000 layoffs by the end of 1991.
"The consolidation, effective immediately, is the result of declining business prospects in the defense industry," said Ralph Hawes, executive vice president for missiles and electronics.
General Dynamics, which has nearly 103,000 employees, already has laid off 1,150 employees this year. The announcement of additional layoffs is the latest example of how cutbacks at the Pentagon have affected defense contractors.
Last month, the nation's largest defense contractor, McDonnell Douglas Corp., announced it was reducing its work force by up to 11 percent, or 17,000 jobs nationwide, by the end of this year.
Both companies are based in St. Louis.
General Dynamics said it was consolidating its Valley Systems and Pomona divisions, which are about 16 miles apart in Pomona and Rancho Cucamonga, Calif. The new unit will be called the Air Defense Systems Division.
"In order to remain competitive in a declining market for missiles and other air defense systems, General Dynamics must more efficiently use its existing resources and reduce overhead," said Michael C. Keel, who has been named corporate vice president and general manager of the new division.
"While we all welcomed a diminished threat from the Soviet Union and the end of the Cold War, these changes have brought unfortunate personal economic consequences for many people in the U.S. defense industry," Keel said.
Keel had been corporate vice president and general manager of the Valley Systems division since 1988. Sterling Starr, who had been corporate vice president and general manager of the Pomona division, will help in the initial steps of the consolidation before being reassigned.
Keel said the company would provide displaced workers with career counseling and placement assistance. More than 600 of the layoffs will be made by eliminating duplicate jobs, he said.
The Pomona division produces Standard and Sparrow Missiles and Phalanx Close-In Weapon Systems, while Valley Systems builds Stinger and Rolling Airframe missiles for the U.S. military and its allies.
The Pomona division was formed in 1952 and Valley Systems was created in 1985 in response to the then-expanding military market. The company said the Air Defense Systems Division would operate facilities in Pomona and Rancho Cucamonga, as well as in New Mexico, Arizona, Arkansas and in California's San Diego County.
With the consolidation, General Dynamics, the nation's second-largest defense contractor, will have eight divisions and six subsidiaries. They are all involved in defense work, except Cessna Aircraft, which makes general aviation aircraft.