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When Pink Slips Fly 

The end of the space shuttle program leaves the jobs of hundreds of skilled workers at Lockheed Martin's Michoud plant up in the air.

click to enlarge The 15-story-high orange fuel tanks manufactured at the NASA Michoud Assembly Facility in eastern New Orleans won't be needed once the space shuttle program ends in September 2010. Tanks made at Michoud have propelled about 130 space shuttles into orbit since 1979.
  • The 15-story-high orange fuel tanks manufactured at the NASA Michoud Assembly Facility in eastern New Orleans won't be needed once the space shuttle program ends in September 2010. Tanks made at Michoud have propelled about 130 space shuttles into orbit since 1979.

Accolades from astronauts have not been enough to help hundreds of local aerospace workers keep their jobs. A fresh wave of layoffs is about to hit the highly trained workforce at the eastern New Orleans NASA Michoud Assembly Facility, which routinely receives salutes from returning astronauts for the work it performs.

  At least 360 contract employees of Lockheed Martin have been laid off from the Michoud facility since early 2008, when Congress announced that NASA's space shuttle program will end in September 2010, according to federally required layoff notices filed with the Louisiana Workforce Commission (LWC).

  More layoffs are coming at a time when the city is struggling to rebuild from Hurricane Katrina and trying to duck a recession that has pushed national unemployment rates to 25-year highs. On June 26, no fewer than 66 Lockheed Martin employees will be handed pink slips at the NASA manufacturing plant between Old Gentilly Road and Saturn Boulevard, company filings with the state labor department show. The number could be much higher.

  "We are just beginning the layoffs now," says Harry Wadsworth, a spokesman for Lockheed Martin, later adding: "We probably will have several hundred (workers) leaving at the end of [June]."

  Several hundred additional layoffs will come in the fall, he says.

  Lockheed Martin is one of the largest employers in the New Orleans area and had more than 2,000 workers as of June 15, according to Greater New Orleans (GNO) Inc., a nonprofit pro-business organization. Michoud salaries range from $40,000 a year for welders and other craftspeople to six figures for engineers. As of mid-2008, 80 percent of the 2,500 workers at Lockheed Martin were unionized, says Greg Anders, a spokesman for the LWC.

  Lockheed Martin also is the largest employer of the 3,900 workers at the Michoud facility, including 1,200 employees of the U.S. Department of Agriculture, at least 200 members of the U.S. Coast Guard and a NASA staff of about 50. Purchased by NASA in 1961, Michoud boasted an overall payroll of $156 million in 2008.

  The Lockheed layoffs are ramping up as work winds down on construction of the last of the orange fuel tanks that stand 15 stories high and are seen all over the world during televised launches. Tanks made at Michoud have propelled about 130 space shuttles into orbit since workers delivered the first tank to the Kennedy Space Center on July 6, 1979.

  Affectionately known as the "E.T. program" among Michoud workers, one locally made disposable fuel tank on May 11 launched the space shuttle Atlantis on a historic mission to upgrade the powerful Hubble space telescope. Atlantis astronauts are expected to arrive at Michoud sometime this month to thank workers for their contribution to the success of the Hubble mission. Ironically, that visit should occur just as pink slips begin to fly.

  "We still have six [external] tanks to send and eight shuttle missions to fly," Wadsworth says solemnly.

Lockheed Martin officials decline to estimate how many employees ultimately will be laid off due to termination of the shuttle program, but they rejected an estimate of 1,300 layoffs circulated in Congress last year as too high. "The 1,300 figure is not a good figure," Wadsworth says. He and Judy Russell, a Lockheed Martin manager, say several variables make job-reduction predictions difficult. Among the factors cited:

  • Transition. Effective July 1, Jacobs Technology of Tullahoma, Tenn., will replace Lockheed Martin as the operations manager of the 832-acre, NASA-owned facility at Michoud — a three-year, $120 million contract.

  Bethesda, Md.-based Lockheed Martin will retain a scaled-down workforce at Michoud for other NASA projects such as the manned Orion space vehicle, which is expected to prowl the moon by 2020.

  Lockheed Martin officials say some of their laid-off workers could be valuable to Jacobs as NASA ramps up the new Constellation program. Set to begin in 2011, the next-generation program of rockets and vehicles is aiming for the moon and, later, Mars.

  "We are hoping Jacobs will hire at the end of this month," Wadsworth says. "'Hope' is the operative word."

  Jacobs, a self-described "people company," has begun its hiring process, according to its Web site. "Incumbent" Michoud workers have been invited to apply — except for union employees, who will be hired based on seniority.

  • Future projects. Lockheed Martin continues to pursue other NASA projects at Michoud, which boasts more than 2.2 million square feet of space. NASA's Web site touts the former sugar plantation as one of the world's largest manufacturing plants, including a single roof that covers 43 acres.

  Last year NASA told the Associated Press that workers would be needed at Michoud for the Ares V rocket program. Although no hiring estimate was provided, NASA indicated the Ares project at Michoud would be on par with development of the Saturn program in the early 1960s.

  • Loaned labor. On July 1, Lockheed Martin and GNO Inc. will launch an innovative "loaned labor" program aimed at keeping laid-off workers employed in other industries in the New Orleans area until they can return to work at Michoud.

  "We probably need between 5,000 and 7,000 employees with their skill sets in the 10-parish area," says Lisa Tomlin, a vice-president at GNO Inc. and a self-described "surrogate mother" of the loaned-labor program. The Portland, Ore., native says the labor retention concept has worked in the Pacific Northwest and she is championing the model for Lockheed Martin. "I have been working on this puppy for two years," she says.

  Russell, who will manage the program for Lockheed Martin, says loaned labor contracts are "strictly voluntary and strictly nonunion."

  The restrictions suggest the initiative can help retain approximately 400 skilled workers — 20 percent of the current nonunion workforce at Lockheed Martin. Under the program, the loaned laborers remain Lockheed Martin employees and retain their benefits and seniority, Russell says: "Nothing changes except they report to another employer."

  The new employer pays sidelined workers' hourly rates. "But from the standpoint of benefits and performance management and appraisal," those duties remain with Lockheed Martin, Russell says. In addition to being skilled, safety-conscious workers, loaned employees also bring temporary employers savings in taxes and overhead costs such as background checks, she says.

  "(Loaned labor) enables Lockheed Martin to buy time until they can secure other contracts," says Greg Anders, an LWC spokesman.

  The program is a "win-win solution to a traditional layoff," Tomlin says, adding that New Orleans has one of the tightest labor markets in the country, because employers' demands for skilled labor exceeds the current supply. "Greater New Orleans can't afford to lose a single skilled employee," she says.

  Assuming the worst-case layoff estimate of 1,300 workers, which Lockheed Martin rejects, Tomlin estimates the reduction in force at Michoud would cost $50 million — including unemployment benefits, retraining assistance and the loss of state and local taxes.

  Like Lockheed Martin, GNO Inc. fears laid-off workers may leave the state. Their departure would leave area boosters with the daunting task of trying to rebuild a skilled workforce from scratch.

  GNO Inc. and Lockheed Martin hope the loaned labor program will attract job offers from the shipbuilding and oil and gas industries. Tomlin declined to name employers who have expressed interest in hiring space workers, citing confidentiality agreements and retraining issues.

  Russell says Lockheed Martin will try to place 100 workers at the beginning of July to coincide with the next reduction in the workforce, but adds, "We are not trying to find jobs for everyone all at once; we have not placed anyone yet.

  "We're trying to focus on craft and salaried workers: welders, machinists, mechanical assemblers, those skills."

  With welding all but finished on the remaining space shuttle tanks at Michoud, Lockheed Martin is looking to place 32 welders in the labor program. "Most have been with the company [for] 25 to 30 years," Russell says. "We feel that they will be easily placed."

  For the moment, however, some of the area's most skilled workers will be out of the space race.

click to enlarge The 15-story-high orange fuel tanks manufactured at the NASA Michoud Assembly Facility in eastern New Orleans won't be needed once the space shuttle program ends in September 2010. Tanks made at Michoud have propelled about 130 space shuttles into orbit since July 1979.
  • The 15-story-high orange fuel tanks manufactured at the NASA Michoud Assembly Facility in eastern New Orleans won't be needed once the space shuttle program ends in September 2010. Tanks made at Michoud have propelled about 130 space shuttles into orbit since July 1979.
click to enlarge Lockheed Martin manager Judy Russell says the company will try to find employment for about 100 workers next month — until Lockheed can find new contracts and restore their positions.
  • Lockheed Martin manager Judy Russell says the company will try to find employment for about 100 workers next month — until Lockheed can find new contracts and restore their positions.
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