Are U.S. Defense Contractors Abandoning California?

Wednesday, September 8, 2010
By Paul Martin


The Oklahoma City press has been having fun with the news that Boeing (BA) plans to relocate two major defense programs from Long Beach, Calif., to their town — calling it a reverse Grapes of Wrath, a reference to the Depression-era exodus of “Okies” to hopefully better jobs and futures in the Golden State. But last month’s announcement could also signal the start of a major shift in the locations of U.S. defense contractors, and how they work.

“This may just be the beginning of a lot of production decisions by those companies, across the entire aerospace defense industry,” says Andrew Sherbo, a lecturer on finance at the University of Denver’s Daniels College of Business who also spent decades with the Air Force. “It’s a good example of it.”

Boeing’s C-130 Avionics Modernization and B-1 Lancer Bomber programs currently employ about 800 people in southern California. The company says it is moving about 550 positions from Long Beach, with other jobs posted and hired locally in Oklahoma City. Boeing already has about 900 people in Oklahoma.

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