Lockheed Martin might help Boeing Workers could be sent to rival to help speed up production

'Ready, willing and able'

Boeing faces penalties for failure to deliver jetliners by deadlines

Aerospace industry

September 23, 1997|By Greg Schneider | Greg Schneider,SUN STAFF

Coke probably wouldn't help Pepsi if the blender broke and Reebok might not bail Nike out of a shoelace shortage, but aerospace giant Lockheed Martin Corp. is in talks to help rival Boeing Co. out of a jam on the production line.

Boeing announced last week that it needed 200 to 400 skilled workers so it can meet deadlines for delivering a backlog of jetliners. The Seattle-based company has been hiring at a record pace -- 32,000 employees in the last 18 months -- but it takes time to train all those green recruits to rivet a wing or fold an air sickness bag.

Faced with huge penalties if it keeps an airline customer waiting, Boeing confirmed that it has approached Bethesda-based Lockheed Martin about borrowing some experienced production workers. The company is also considering bringing up workers from its newly acquired McDonnell Douglas aircraft factory in California.

"We have talked with Lockheed Martin and made our wish list known to them. As far as I know that's an open-ended discussion at this point," said Brian Ames, spokesman for Boeing's commercial airplane group in Everett, Wash.

It might seem strange for the world's second biggest aerospace company to help its slightly larger rival, but experts say there is a simple reason for it:

"These guys are not blood enemies. They have more programs in common than they have in competition," said Richard Aboulafia, an aircraft expert for the Teal Group defense consulting firm.

Lockheed Martin made an important choice this summer when it announced plans to buy Northrop Grumman Corp. for almost $12 billion. Until then, Lockheed Martin had been courting Europe's Airbus Industrie as a way of getting into the commercial aircraft business.

Lockheed hasn't built a commercial plane in more than a decade, but analysts have urged the company to grab a stake in the lucrative field to balance its defense work.

The company gets such a stake through Northrop Grumman, the major subcontractor on every series of Boeing jetliner.

Before that purchase, Lockheed Martin and Boeing were "cat and dog," said Byron Callan, a defense analyst for Merrill Lynch. "The pending Northrop Grumman deal really changes the relations between the two companies."

Thanks also to Boeing's recent absorption of McDonnell Douglas, the two giant companies now rely on each other to an unprecedented degree. The F-22 stealth fighter plane, the Navy F-18 E/F Super Hornet, the AWACS radar plane, the X-33 space vehicle, management of the Space Shuttle, the Airborne Laser -- all are Boeing and Lockheed Martin partnerships.

The only major projects where the two companies still compete are to build a new generation of rocket launchers and to build the Joint Strike Fighter, a warplane for the Air Force, Navy, Marines and British Royal Navy. The fighter is a big plum, worth a potential $300 billion or more. But many experts believe it, too, may wind up split between the two companies.

"Ultimately, there are so many programs that the two serve as subcontractors for each other on that obviously they have to cooperate on keeping costs down and on joint marketing," Aboulafia said.

Lee Whitney, spokesman for Lockheed Martin's Aeronautics Division, acknowledged that his company and Boeing have "a complex relationship."

But if Boeing needs a boost on the jetliner production line, "we're ready, willing and able to help them out if they want to pursue it," he said.

Boeing officials recently visited facilities run by Lockheed Martin's Aircraft Logistics Center of Greenville, S.C., to see what capabilities the company offers.

The center oversees crews of modification and maintenance experts -- basically, globe-trotting airplane trouble-shooters -- whose expertise could allow them to fit into Boeing's production lines, said David Jewell, spokesman for the center.

"We think we'll be able to handle any requirement they might have," Jewell said.

Lockheed Martin's Aerostructures plant in Middle River is part of the ALC group, but its workers are not likely to be sent to Seattle if a deal is struck, officials said. Middle River is a manufacturing center and does most of its work for a Boeing plant in Kansas that needs metal parts for building planes.

"The volume of that work is increasing tremendously," said Randy Simpson, director of production operations at Middle River. "I've doubled my work force here and a large portion of that is being driven by Boeing work."

Simpson said about 100 metal workers at Middle River are dedicated to Boeing jobs.

Ames, the Boeing spokesman, said his company needs to bring in the production help "as soon as possible." He declined to speculate when arrangements will be complete, but said "we just need to get those people here as soon as we can in order to bring our factories back to full health."

Boeing has doubled its production rates in the last 18 months, he said, from 18 airplanes a month to 36. Parts are running late, new employees can't be trained quickly enough, and last week the company announced it would miss deadlines on 12 new aircraft, Ames said.

Boeing faced similar problems in the late 1980s, when it had production scheduling difficulties with a new model of 747. Then, too, it turned to a competitor for the loan of a couple hundred workers.

It got them from Lockheed.

Pub Date: 9/23/97

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