McDonnell Loses Major ‘Star Wars’ Contract : Aerospace: The Army’s cancellation of the $594-million program follows a recent round of layoffs at the company’s plants in Huntington Beach and Santa Ana.

HUNTINGTON BEACH —  Dealing a Thanksgiving blow to McDonnell Douglas Aerospace, the Army on Wednesday canceled a $594-million test program for a ground-based missile-tracking system for the “Star Wars” program.

The cancellation is the second piece of bad news this month at McDonnell Douglas’ Orange County operations. The company announced Nov. 6 that it will eliminate 254 jobs at two plants in Huntington Beach and Santa Ana as part of a cost-cutting reorganization.

Wednesday’s announcement is also the second setback for the Huntington Beach operation’s Star Wars team, which in September lost out to Lockheed Corp. in the bidding for a $688.9-million contract to develop a regional missile defense system known as Theater High-Altitude Air Defense.

About 65 of McDonnell Douglas’ 300-member strategic systems unit in Huntington Beach worked on the missile-tracking program, which accounted for half of the corporation’s Star Wars work, said Tom Williams, spokesman for the company.

The immediate fate of the workers could not be determined on Wednesday, in part because the unit will continue to finish work for the Army through March.

“I don’t anticipate an immediate layoff, but we will assess our needs and try to find work for people,” Williams said.

Overall, the Huntington Beach plant, formerly Space Systems Co. but renamed McDonnell Douglas Aerospace last summer, has about 6,800 employees. Most others at the plant work on the Delta II rocket, Space Station Freedom and other space-related work.

The aim of Star Wars, formally known as the Strategic Defense Initiative, is to protect the United States against nuclear attack. The program’s budget has been trimmed in recent years because of the end of the Cold War and criticism of its costs and technological merit.

The radar system would have been part of a Star Wars headquarters on the ground that would have tracked nuclear missiles in space and coordinated defense systems to destroy those missiles.

This year, Congress cut President Bush’s request for 1993 research funds from $5.4 billion to $3.8 billion. The Army said in a statement that it decided to end the missile-tracking contract because of funding problems and Congress’ decision to defer initial deployment of the system to 2002.

McDonnell Douglas won the contract in September, 1988, and has already received about $200 million for work performed, Williams said.

The defense cutbacks are dealing a new reality to the aerospace community in Orange County, which lost 27,000 defense jobs between 1987 and 1991. An additional 17,500 could disappear in the next four years, according to a study released in October by economists at Cal State Fullerton.

At Huntington Beach, employment peaked in 1990 at about 7,500 employees. Since then, there have been four major layoffs of about 250 people each, offset by some limited hiring and transfers of employees from other plants.

The company isn’t planning to drop out of bidding for Star Wars programs, Williams said. Instead, it is preparing to bid for contracts to build a ground-based missile interceptor.