Recovering Aerospace Sector Faces Aging Workforce By SLAV KANDYBA Staff Reporter Just as business is picking up at the greater San Fernando Valley’s major aerospace contractors, they are facing an aging workforce and are having trouble recruiting skilled new employees, according to company officials. Many longtime employees of Palmdale-based Lockheed Martin aeronautics division, and Boeing Co.’s Rocketdyne Propulsion and Power are reaching retirement age, officials said. The companies are often left with no choice but to fill the vacancies with rookies who have little real-world experience: “If it’s a college new hire, they surely have basic skills, but they don’t understand the basic nuances of the business,” said Dianne Knippel, a Lockheed Martin spokeswoman. The retirements are bad news at a good time for the Valley’s aerospace industry, which is enjoying a resurgence of sorts so far in 2004 thanks to increased military contracts flowing into the region due to the Iraq and Afghanistan conflicts and homeland security initiatives. According to the Los Angeles County Economic Development Corp.’s recently released mid-year forecast, Los Angeles County was the recipient of more than $27 billion in Department of Defense contracts from 2001 to 2003 and other funding from “black” or secret defense contracts. The report gave the aerospace industry an “A-“grade on a scale from “A” to “F,” but included a “warning flag” because of the trouble with finding skilled workers. 30 percent eligible Knippel said about 30 percent of the 4,300-strong Palmdale workforce is eligible for retirement. And many already have. Although there are no figures for the Palmdale facility alone, Lockheed pension payouts were substantially higher in the second quarter of 2004 than they were in the same period of 2003. Lockheed reported pension costs were $148 million in Q2 2004, compared to only $68 million in 2003. But the retirements are not catching Lockheed by surprise. “We are trying to bring in college graduates and bring in middle-level folks,” Knippel said. “We haven’t seen a loss (in) business and that’s because we were planning.” Knippel did add, however, that there was a “time overlap” between the loss of the skilled workers and the readiness of the new hires that were put through on-the-job training. “Is it going to shut us down? No,” she said. In 2003, Lockheed hired about 450 new employees in Palmdale, including some college graduates and more experienced, mid-level employees. However, the company’s total Palmdale employment rose by only about 100 to 150, Knippel said, indicating retirement has had some effect. Being prepared At Northrop Grumman Navigation Systems in Woodland Hills, employees planning to retire identify and train their successors, said Ron Tanabe, director of the Space Systems Business Area. “We have a mentor plan to make sure there’s transition,” Tanabe said. “It’s our practice, it makes good sense if we know someone is leaving.” John Anderson, an aerospace consultant with the California Manufacturing Technology Center, a non-profit organization based in Gardena, characterized the departure of aging employees as a significant dilemma for the industry. “I think we’ve got a wave of five to seven years where the baby boomers are going to be retiring,” Anderson said. Because the aerospace industry was in downsizing mode over the past several decades, most of the employees who were not laid off were older, and more experienced, Anderson said. “We had this group of more experienced people that retained their positions in the 80s and the 90s and because of that we have this bubble of people who are going to retire at the end of this seven-year period,” Anderson said. As result, most companies will be in a “catch-up mode,” he said, trying to recruit new workers and train them on the job. At Boeing’s Rocketdyne facility in Canoga Park, older and more experienced workers mentor incomers, said spokesman John Mitchell. Boeing has put in place an aggressive program to bring in new college hires from the best engineering schools and so far, there has not been a shortage of talent, Mitchell said. Nevertheless, Mitchell called the swelling number of baby boomers ready to retire “an ongoing concern” for the company. “The big emphasis for us is to attract and retain the talent to do the kind of work we do,” Mitchell said. He cited confidentiality in declining to provide statistics about how many current employees were of retiring age or on the verge of it. Attracting qualified employees hasn’t been that easy for the aerospace companies. Eventually, when potential employees will see that there are high-wages jobs available in aerospace, they will train and turn to them. Until then, however, Anderson predicted there will be a shortage of qualified, highly skilled workers. “A concern has been that trade schools and shop classes and the apprentice programs have diminished, so the younger workforce is not coming up with the same skills that the experienced workforce had,” Anderson said. “And that’s a major concern.” Lockheed’s Knippel identified that as an issue at her company as well. “The pool of potential employees is getting smaller, because Lockheed Martin is not the only one (experiencing) the ‘graying’ of its workforce,” Knippel said.
