Westinghouse Electric Corp. said yesterday that it would lay off 1,400 workers in Maryland by the end of the year.
The layoffs affect one out of every nine jobs that Westinghouse, the state's largest manufacturing employer, has at its sprawling complex next to the Baltimore-Washington International Airport and in Hunt Valley.
Word of the new cuts -- Westinghouse's third major work-force reduction in the state since February 1991 -- came on the heels of the company's recent loss of a big ground-based radar contract to Raytheon Corp. in Lexington, Mass. It also came a week after Congress took steps to halt funding on a multibillion dollar electronic radar jamming system that Westinghouse is producing for Navy fighter planes.
In his letter to employees announcing the scheduled reduction, Richard A. Linder, president of the Electronic Systems Group in Linthicum, attributed the need for layoffs to delays in contracts and reductions of the work done for the Defense Department.
He said the "prolonged recession" had also limited the growth of the group's commercial business, both in this country and abroad.
These new job cuts would be made "across the board" and in all phases of the operation, said a Westinghouse spokesman, Jack Martin, explaining that the jobs cuts would include management as well as professionals, salaried workers and hourly employees.
Yesterday's announcement came after the Pittsburgh-based Westinghouse Electric Corp. had lost almost $1 billion in market value this week on concerns that credit problems at its financial services unit are worse than the company is indicating. The company's stock fell 19.7 percent in the past four days, closing 1 1/2 points lower yesterday, at 11 3/4 .
Westinghouse reported Monday that a combined third-quarter write-off of $155 million had reduced its third-quarter earnings to $14 million, or nothing per share. Revenue fell to $3.04 billion from $3.4 billion last year. Standard & Poor's Corp. and Duff & Phelps followed by cutting their ratings on Westinghouse's credit this week, citing concerns that the company might be forced to take additional write-offs.
This latest loss of 1,400 jobs comes on top of about 1,200 jobs that Westinghouse eliminated in the state last year after Defense Secretary Dick Cheney canceled production of the Navy's A-12 attack-aircraft program.
A year ago, the Electronic Systems Group cut an additional 1,300 jobs as part of a corporate-wide cost-cutting move to trim 4,000 jobs from its worldwide work force after the parent company posted nearly $1.5 billion in third-quarter losses.
These new layoffs would leave Westinghouse with about 10,600 workers in the state, down from a high of about 18,000 in the mid-1980s.
For the most part, these have been good-paying jobs. According to the Maryland Department of Economic and Employment Development, the average Maryland defense worker earns nearly $45,000 a year.
"It is kind of depressing," said Rick Zaykoski, 31, an engineer with Westinghouse since 1983, as he walked between buildings at the Hunt Valley complex. "This is happening every year."
Mr. Zaykoski said he was not sure whether he would be let go. He said the engineering cuts would likely be made by departments. He said he hadn't done anything to prepare for a layoff. "I try not to think about it."
He attributed the layoffs to the loss of the ground-based radar contract and added: "It is time to get out of the defense industry."
Leonard S. Thomas, a 25-year veteran of Westinghouse, said yesterday's announcement left people in the Hunt Valley plant "numb," even though a layoff had been expected for months. He said he thought he would escape the layoffs but fears he will get "knocked down in pay," as workers are bumped into lower-paying positions.
At the BWI site, employees said the mood was "dismal" and tense, as some who have worked for the defense contractor for two decades feared for their jobs.
"Sometimes tempers flare," said one manufacturing engineer with 14 years at Westinghouse. "It's a very bad situation all around."
There is tremendous fear among workers at the Linthicum complex that not only will they be laid off but also that they are unemployable elsewhere in the current economy.
"I am at the bottom of the job market," said 44-year-old Don Hinson of Glen Burnie, a material controller. "I am a middle-aged white male. I've got 20 years here and, frankly, I'm worried."
One worker said many workers resented the company's letting rumors run rampant for months before announcing the layoff. Workers were told they would be notified between the end of this month and mid-November of specific cuts.
Mark L. Wasserman, secretary of the Maryland Department of Economic and Employment Development, called yesterday's announcement a blow to the state's economy. "There is no doubt about that," he said. "There's no sugar-coating it."
The economic impact of the layoff was not expected to be limited to the Westinghouse plants involved. Westinghouse does nearly $300 million a year in business with about 2,000 subcontractors in the state, not including the economic impact that layoffs of this magnitude can have on consumer spending.
"Oh no," was John Fratta's response to news of the layoffs.
Mr. Fratta, general sales manager of Lee Oldsmobile in Glen Burnie, said he believes that bad news from Westinghouse would erode the confidence of all buyers throughout the region. "Westinghouse is viewed as a stabilizing institution in this area, and when they cut back it makes the guys at the smaller companies feel uneasy about their futures," he said.
Mr. Fratta said a loss of 1,400 jobs at Westinghouse would likely have a negative impact on an additional 100,000 Maryland consumers who are likely to say to themselves, "This could happen to me."
Westinghouse is just one of a number of Maryland defense contractors caught up in a changing world order. Martin Marietta Corp. has eliminated about 800 jobs at its operations in Middle River and Glen Burnie over the past two years.
Grumman Corp., which is perhaps best-known for the F-14 fighter plane, has eliminated about 150 jobs at its machining plant in Glenarm in recent years and 243 more at an aircraft parts plant in Salisbury.
AAI Corp. in Cockeysville has laid off about 700 workers in recent years, though employment has apparently stabilized the past year.