Litton Acts to Lop Off 700 in Area : Aerospace: It says it will eliminate production at its navigation systems operation in Woodland Hills by 1995.

In more bad news for a Southern California economy already reeling from layoffs in the defense industry, Litton Industries said Friday that it plans to eliminate production at its navigation systems operation in Woodland Hills by 1995, resulting in the loss of about 700 jobs.

As many as 250 engineering and administrative employees at Litton’s guidance and control unit will be transferred to a production facility in Salt Lake City, Litton said. Another 450 workers will be laid off.

About 800 employees, who design navigation systems for ships and aircraft, will remain in Woodland Hills, the division headquarters where 4,000 workers toiled at the peak in the mid-1980s. Litton said that the declining defense budget has hit the division particularly hard, forcing it to cut costs and consolidate operations.

“In today’s environment, it’s impossible to have production at several different locations,” said Dirk Koerber, a spokesman for the Beverly Hills-based company.

The Salt Lake City plant opened about 25 years ago as a low-cost alternative to Southern California, and has since become the division’s main production facility, Koerber said .

“We tried to keep production in Woodland Hills as long as we could afford it,” he said. But faced with the need to consolidate, “you do it where you already have most of your investment.”

Litton also plans to close the navigation systems’ production facility in Grants Pass, Ore., in mid-1994 and consolidate those operations into the Salt Lake City plant. About 35 of the 200 Oregon workers will be asked to move.

Litton, which had $5.7 billion in revenue in its latest fiscal year, does not break out the division’s financial results, but business has been declining sharply.

As one indicator, Koerber pointed out, the government estimated in 1989 that 380 of the military fighter planes that use Litton navigation equipment would be produced in 1994. Under President Clinton’s proposed defense budget, only 70 will be built.

Litton’s news comes less than two weeks after Hughes Aircraft said that it will close its missile facility in Canoga Park and move 1,900 engineering-related jobs to Tucson by 1994. The transfers rank as one of the largest relocations of aerospace jobs out of the state since the movement began in the mid-1980s.

Hughes also said its decision was based primarily on the need to locate engineering and manufacturing at one site. But the aerospace giant also criticized political inaction on California’s many problems.

Industry observers said the Litton and Hughes announcements should serve as a wake-up call to state officials.

“The defense budget is going down, so you can expect layoffs,” said Michael Beltramo, an industry consultant and co-author of the Los Angeles County Aerospace Task Force report, which last year warned of the dire effects of the aerospace bust on the local economy.

“But I think these layoffs were sort of preordained and that has a lot to do with the business climate in California.”

Dan Flaming, president of the Economic Roundtable, a nonprofit policy research organization in Los Angeles, said that Los Angeles County has lost nearly 100,000 aerospace and electronics jobs from 1988 through January of this year.

“We’ve hemorrhaged,” he said. “We’ve lost a lot and it’s gotten worse.”

Particularly worrisome, Flaming said, is that engineering jobs are now following manufacturing jobs out of the state. “It’s in that area that we should be competitive,” he said. “When we see them moving, it should be cause for concern.”

Litton now employs a total of 49,000 workers, including about 2,200 at its data systems, air products and computer services units in Woodland Hills, Van Nuys and Agoura Hills.