NEWS ANALYSIS : Everyone Loses in B-2 Reductions : Defense: Huge layoffs seen. Erratic planning has driven up the cost, while the number of planes has dropped.

The looming cutbacks in Northrop Corp.’s B-2 bomber program may mean huge new aerospace layoffs much sooner than expected in Southern California. But the bigger losers may be American taxpayers.

The piecemeal approach that has characterized the B-2 program--to date a $37.1-billion effort that has been subjected to Congress’ relentless political second-guessing, Northrop’s prolonged technical uncertainty and the military’s confounding schedule changes--has driven up the cost even as the number of bombers to be purchased has dropped.

In its present form, the B-2 program is a paradigm for erratic defense planning in which billions are expended with little return in usable hardware, experts say. If Congress, Air Force leaders and the Ronald Reagan and Bush administrations had reached a consensus early on, the entire program could have been completed quickly at a fraction of the cost, they contend.

For that $37.1 billion it has spent since 1981, the Air Force is certain of getting just 15 bombers. In that case, layoffs could start as soon as 1993. The White House is now poised to ask Congress for five more bombers, officials say. The original plan was to build 132 aircraft; then the program was cut to 75 aircraft and, in more recent discussion, to 37 planes.

“We talk about having total quality management in products, but very often the source of the waste is in the process that we follow to design and build products,” said Robert D. Paulson, a vice president at the consulting firm McKinsey & Co. “Because of the political process, annual funding and trade-offs, we inevitably are designing our planes with inefficient processes.”

The Air Force originally estimated that production of 132 aircraft would cost $36.6 billion. To meet that goal, Northrop built huge plants in Pico Rivera and Palmdale for production of three B-2s per month and installed a costly computerized design system.

Those huge fixed costs, however, were unnecessary for a program to build just 15 to 35 aircraft.

“This has been a terribly difficult problem for the industry for many years,” Northrop Chairman Kent Kresa said in an interview Wednesday.

“Many of these defense systems were started in a different era and a reassessment is clearly proper,” he acknowledged. But Kresa added that, all too often, programs are changed in midstream--typically by being reduced in scope after taxpayers have paid expensive development costs.

“It is an inefficient way to do it,” Kresa said.

Northrop officials said Wednesday they are as much in the dark about the future of the program as everybody else--an uncertainty that hampers production planning and hurts the morale of the firm’s roughly 13,000 B-2 program employees.

The company has about 9,000 employees on the program in Pico Rivera, 3,000 in Palmdale and about 800 at Edwards Air Force Base, where the bombers are tested. Nationwide, the B-2 program directly employs 40,000 workers at 4,000 companies.

Administration officials have told The Times that President Bush will cut the B-2 program to just 20 aircraft, but other reports put the number at 25 or 35 aircraft.

“I don’t think anybody really knows” how many planes the President wants built, Northrop spokesman Tony Cantafio said Wednesday. “I don’t know. Somebody may know. We don’t know. Even 20 and 25 is a big difference; that is 25%.”

Beyond the questions of cost and efficiency, experts are divided on whether so small a force would be militarily effective.

A force of 20 B-2 bombers, according to congressional calculations, would make roughly 13 aircraft available for short-notice missions. Such a force could deliver 208 of the 2,000-pound “smart bombs” used to great effect in the Persian Gulf War--2 1/2 times as many bombs as could be carried by the entire force of F-117 Stealth fighters that participated in that war.

But this rationale does not allow for the loss of aircraft through accidents or combat.

Under the worst scenario for the company, in which Northrop builds just the 15 bombers currently on order, the company would deliver the last aircraft at the end of 1995. With two production aircraft already delivered, the firm would have 13 bombers to produce, at an average rate of one every four months, Northrop officials say.

The company would almost certainly begin huge layoffs months before the final delivery, but there would still be a painful, massive drop in the final weeks of production. Rockwell International laid off roughly 25,000 B-1 bomber program employees in the Southland over a four-month period in the mid-1980s, said PaineWebber analyst Jack Modzelewski.

At that time, the workers rapidly were reabsorbed on the B-2 and other defense programs. But with the defense industry in a protracted slump, Northrop workers will face a bleak job market. The B-2 is one of two major legs supporting Southern California’s defense industry, along with the McDonnell Douglas C-17 cargo jet.

Aircraft industry experts, speaking not for attribution, say that some employee reductions on the B-2 could start 12 to 24 months before the last delivery. Northrop is currently working on the assembly of the 11th production aircraft in Palmdale, meaning just four more aircraft have yet to be started.

The cutbacks on the B-2 program are meant to save money, but many experts say reducing the quantity of aircraft produced will save relatively little. Aerospace sources knowledgeable about the B-2 say that Northrop will have to retain much of its work force until virtually the last aircraft leaves the plant because much of the B-2 is hand-built and will need engineering support until the last minute.

That seems to be the case for suppliers, as well. Hughes Aircraft, which builds the B-2 bomber’s radar in El Segundo, said Wednesday that it will continue working under its existing contract for 15 aircraft until the end of 1994.

And a spokesman for Cleveland Pneumatic, which makes the B-2’s landing gear in Ohio, said the firm has not yet finished all of those complex parts, though it normally takes up to two years to produce landing gear.

The final price tag for even the 15 B-2s may evoke one final gasp of sticker shock because the costs of shutting the program down could be bigger than anybody expects--so big that they could sap much of the heralded “peace dividend” that the White House apparently hopes to claim.

“The peace dividend is not real savings. It is money that we wished we were going to have,” Paulson said. “You can’t take it and give it to somebody for food stamps.”

It remains unclear how much money the Air Force will spend for the 20 aircraft now expected to be ordered by Bush. But the price tag certainly will be no less than $40 billion. At that price, each B-2 will have cost $2 billion.

“This program is almost too staggering to comment on,” said Gordon Adams, director of the Defense Budget Project in Washington, a group often critical of Pentagon practices. “The B-2 program was not properly sized, and the Air Force’s appetite was too big.

“We have been in this kind of acquisition system for 20 years. We are doing this with almost every weapon we buy now. We buy almost nothing efficiently now.”

Times staff writer Melissa Healy in Washington contributed to this story.