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Killing off a ghost

Boeing to Consolidate Southern California Facilities ST. LOUIS, July 21, 2006 -- Boeing [NYSE: BA] has announced plans to consolidate company facilities in Southern California over the next four years. The Boeing facility in Anaheim, with about 3,700 employees, will relocate to the Huntington Beach facility.

I grew up a few miles away from the massive Autonetics plant in Anahiem (later Rockwell, recently Boeing). During the Cold War a tremendous amount of engineering work took place at this location - any sort of complete accounting would be impressive. Much of the very early microelectronics technology was born here (all classified at the time). Workers were told to transfer know-how from Autonetics to Fairchild, and the Intel founders came from Fairchild. This along with many other projects live on in technologies we use every day. This plant was the very peak of high technology at the time.

The place now is a mere ghost of it's former self - and soon to be gone entirely.

"This plan provides a strong foundation for long-term stability and competitiveness," said Gary Toyama, Boeing Integrated Defense Systems (IDS) vice president, Southern California region. "Our vision is to integrate and optimize our capabilities to meet customer requirements."

Nearly all of the moves will occur within a 25-mile radius. Design and construction in Huntington Beach will start immediately, with minor employee moves. Significant employee relocations are anticipated to start early in 2007 and will continue through 2010.

"As our programs change and mature, we will adjust accordingly to provide a stable environment, reduce operation costs and maintain our competitiveness in the marketplace," said Toyama.

What this means is that Boeing is looking to shed a lot of employees. Engineering jobs seldom pay especially well anymore (especially in the defense industry were the pool of jobs is shrinking). Many employees are going to live where housing is less expensive - a good long drive from the existing Anahiem plant, and the new Huntington Beach location is even further. Many older employees will retire rather than face the unpleasant commute across Orange County.

If they were truly looking to reduce costs, they might chosen to shift jobs to where costs were lower - outside the county entirely. The shift to Huntington Beach just does not - for the stated reasons - make any obvious sense.

The company will work closely with the City of Anaheim to redevelop the property in a manner that maximizes its economic benefit, both for Boeing and the community. Boeing Realty Corporation will manage the disposition of the Anaheim site.

You can interpret this bit just as simply. Real estate in Orange County is pricey. Closing the Anahiem location sheds the maximum number of employees, and frees up land to be sold.

I would bet the leakage of weapons technology out of the country is probably greater now than any time since WWII. For an engineer working in the defense industry - poor pay and an uncertain future make the temptation to "sell out" greater than ever. If presented with an opportunity, why would you care - if neither you company or your country seems to care in the slightest about your future?