ST. LOUIS, DEC. 20 -- McDonnell Douglas Corp. and General Dynamics Corp. said today that about 4,000 workers at each company could lose their jobs if the Pentagon cancels the Navy A-12 Avenger program.
The two defense contractors, both based in St. Louis, are the prime contractors on the $4.8 billion A-12 program, which the government has threatened to scrap because of cost overruns and schedule problems. A decision could come as early as Jan. 2.
Losing the A-12 would be a painful blow to the companies, which like other defense contractors are under pressure because of a broader slowdown in weapons orders that resulted from a thaw in the Cold War.
McDonnell Douglas said it would notify about 4,000 employees at McDonnell Aircraft that they could be laid off as soon as Jan. 2. Officials said the layoffs would not be limited to people working on the A-12 program.
General Dynamics today said it also would notify about 4,000 workers at its Fort Worth Division that they could be laid off as early as Jan. 2.
General Dynamics President Herbert F. Rogers said the company was hopeful the Navy and the Department of Defense would continue the program.
"The possibility exists, however, that the government will terminate the program," Rogers said. "As a result, we are forewarning affected employees that layoffs could occur suddenly and without as much notice as we have given during our planned down-sizing operations."
McDonnell Aircraft spokesman Jim Reed said that officials on the A-12 team would continue to hold discussions with the Navy and the Defense Department "to resolve difficulties and assure continuation of this vital national defense program on a mutually satisfactory basis."
Both companies emphasized to employees that the layoffs would occur only if the program were terminated or changed significantly.
Last week, Defense Secretary Dick Cheney ordered the Navy to justify the project or kill it because of what he called intolerable problems.
Defense Department audits on the program allege that hundreds of millions of dollars in excess payments have been made to the two companies.
Earlier this week, the St. Louis Post-Dispatch and the Los Angeles Times reported that a separate Pentagon audit concluded that the A-12 contractors have a "possible chance of bankruptcy." Officials of General Dynamics and McDonnell Douglas disagreed with the audits' findings.
The project is at least $1 billion over cost and at least 18 months behind schedule. Among the chief technical problems is excess plane weight due to the thickness of the construction material needed to make the plane strong enough for carrier landings, said a Navy report released earlier this month.