Despite wars, 65 local layoffs at L-3 Communications

Local defense-industry workers are finding the nation's involvement in two wars no guarantee of job security.

L-3 Communications, on the Camden waterfront, announced last week that it would lay off 65 employees. The cuts are needed to curb costs and make L-3 more competitive, according to the company, which designs and makes communication and intelligence systems.

The reduction follows the layoff of 126 people, including 73 unionized engineers, at Lockheed Martin's Moorestown facility.

The Obama administration has maintained the pace of spending on war technology at nearly $250 billion a year, said Michael O'Hanlon, a senior fellow at the Brookings Institution, who specializes in defense policy.

That's about the same as the George W. Bush administration and twice what President Bill Clinton spent, he said.

While recent layoffs in the region are atypical of the defense industry overall, contractors could suffer as the nation's military conflicts wind down, O'Hanlon said.

Local workers were largely spared last year when Boeing laid off about 9,300 people, citing delayed contracts and a leveling-off in defense spending.

The company has cut fewer than 50 of its 5,600 employees in Ridley Park this year. The site is hiring engineers to customize its Chinook helicopters for international clients.

But Boeing's national staffing could "trend down" again this year, company spokesman John Morrocco said.

Lockheed's cuts to its local Mission Systems and Sensors unit, which oversees development of the Aegis weapons system and other programs, were part of a companywide reduction announced in January. Nearly 1,000 people were laid off or took buyouts.

The reason was "the perception, and the known fact, that the government doesn't have the money to pay for some of the programs out there," spokesman Bruce Yost said. Lockheed continues to employ about 11,000 people in the region.

Yost said that he was unaware of any other planned layoffs, but that the company continued to look for ways to be more efficient.

At L-3 Communications, management "will face additional tough decisions" in the coming days, acting president John Tierney wrote to staff in an e-mail last week.

The company said in a statement that it would move some tasks performed in Camden to other L-3 offices. The cuts, effective May 15, affect 6.5 percent of the contractor's local workforce and mostly involve administrative staff.

Jennifer Murphy, acting vice president of human resources in the Camden office, declined to say whether there would be more job losses there.

Engineers at L-3 have heard rumors and are "preparing themselves" for that possibility, said Joe Grabowski, executive director of the Association of Scientists and Professional Engineering Personnel.

Bob Montgomery, director of L-3 homeland-security programs in Camden, said last week that the office had been overstaffed. The layoffs would improve the company's outlook, he said.

L-3 is a descendant of the RCA Corp., whose roots in the city date to 1901. People shouldn't worry about the company's presence in Camden, Montgomery said.

"We're going to be there," he said. "We're going to be in good shape."

Parent company L-3 Communications Holdings reported sales of $15.6 billion last year - 76 percent to the U.S. government - and an operating margin of 10.6 percent.