Survey Ranks Private-Sector Job Levels : 3 Defense Contractors Cut Work Force but Remain Top Employers
The three biggest corporate employers in the San Fernando Valley area, all defense contractors, made modest cuts in their local work forces over the past year.
But a survey by the Los Angeles Times of the area’s largest private-sector employers found that most of the layoffs at the three leading employers--Lockheed Corp., Rockwell International and Litton Industries--came in divisions that depend more on industrial customers than on the Pentagon.
The survey, which tracked changes in employment at local companies during the 12 months that ended June 15, found that the same companies made the top 10 both years, with only one change in the rankings--ITT Corp. and Hughes Aircraft Co. were ranked sixth and seventh in 1985, reversing places from 1984.
Five of the companies increased local employment, and the other five pared their work forces over the year.
Despite the cutbacks, the defense industry easily remains the area’s leading private-sector employer. Five of the top 10 employers operate local defense-equipment divisions.
Also among the leaders are two companies in the Valley’s entertainment industry and two companies involved in health care, including the huge St. Joseph Medical Center in Burbank. General Motors Corp., which has an assembly plant in Van Nuys, is fourth on the list.
The rankings do not reflect the proliferation of computer-related companies that have made the Valley a prominent high-technology center. Chatsworth alone has 78 high-tech businesses, according to the American Electronics Assn., an electronics trade group based in Palo Alto. The microcomputer industry is the second-biggest Valley employer after defense, said Sonja S. Marchand, director of business services and research at California State University, Northridge. But no single company is large enough to rank in the top 10.
That segment of the Valley’s economy has experienced more dramatic layoffs recently than have the defense contractors.
Trends Seen in Valley
“The trends everyone’s talking about nationally are reflected in the Valley,” said Roger B. Selbert, director of futures research for Security Pacific National Bank. “There’s been a move to high-tech and service-oriented employment in the past five years. Now, the shakeout among computer-peripheral companies will hit the area hard.”
Even if that industry stabilizes soon, Selbert said, employment may not rise along with sales and profits.
Lockheed was by far the biggest employer in the area, with 17,230 workers, most at its manufacturing facilities in Burbank. Next was Rockwell, with 7,465 workers in Canoga Park and Thousand Oaks. The third leading employer was Litton, with 7,420 workers at six offices and plants around the area.
Defense Predominance Less
But the defense companies are not as pre-eminent as they once were. In the late 1960s and early 1970s, when the area had a much smaller population, Rockwell had local employment peaks of more than 20,000, and Lockheed had peaks near 30,000.
The number of people now employed by defense contractors in the Valley area--from Burbank west to Camarillo in Ventura County--is dwarfed by the army of government employees, who make up about 10% of the area’s work force of 700,000, said David Hornbeck, director of business research at CSUN.
The 10 top private-sector employers account for 8% of the work force, employing 58,000 people.
The biggest gain in employment was recorded by Blue Cross of California, which increased its staff by 451 to 2,942. Rockwell had the largest decline, from a work force of 7,928 in 1984 to 7,465 this year, a 6% drop.
Decrease Evident at Rockwell
Nowhere was the employment decrease in the defense companies more evident than at Rockwell, which absorbed its 1,134-worker De Soto nuclear Energy Systems Group, a research arm for utility companies, into its Rocketdyne division last summer. Overlapping positions were cut, and no more than half the staff was taken on by Rocketdyne.
The De Soto division was closed because of hard times facing the nuclear power industry, said Dom Sanchini, Rocketdyne’s executive vice president for production. Sanchini said the company’s future depends more heavily than before on government contracts.
“The Peacekeeper program should help Rocketdyne a lot,” Sanchini said, referring to the division’s project to build the fourth stage of the intercontinental ballistic missile and components for its guidance system.
‘Less Private-Sector Work’
Rocketdyne employed slightly more than 7,000 at its two Canoga Park plants as of June 15. The rest worked at Rockwell’s International Science Center and at a defense electronics division, both in Thousand Oaks.
The trend at Rockwell is common in the defense industry, said futures researcher Selbert.
“These companies that are cutting back are doing so because there’s less private-sector work,” he said.
Hughes Aircraft had an 8% drop in its work force in the Valley, cutting its employment from 4,363 to 3,998. At its Spectrolab plant in Sylmar, more than a third of last year’s staff of 296 has been cut, Spectrolab President Larry Spicer said.
1 Hughes Unit Grows
That division makes solar cells and panels for telephone and data communications satellites. The job losses were the result of a glut of solar equipment on the market, Spicer said.
The staff of the Hughes Missile Systems Group in Canoga Park, which does preliminary design and prototype development, shrank by more than 7% to 3,585 workers. But the company’s Radar Systems Group in Van Nuys grew slightly, and its new center for the study of artificial intelligence--meaning highly sophisticated computers--opened in Calabasas,employing 20 people.
Hughes officials said it is still too early to tell what changes, if any, the planned merger between Hughes and General Motors will have on Valley employees of both companies.
The employment drop was smaller at the Valley’s leading private employer. Lockheed, now with 17,230 employees, trimmed its work force by 166 over the last year. Its subsidiary, Lockheed California Corp., employs almost all the local workers, with only 345 at Lockheed Corp.’s national headquarters in Burbank.
L-1011 Phased Out
Over three years, Lockheed California Corp. has phased out its commercial airliner, the Lockheed L-1011. Now the company has defense contracts exclusively.
James Ragsdale, a spokesman for Lockheed California, said the company is “in a slight downward trend” from phasing out commercial operations, although it still makes spare parts for the L-1011.
Litton Industries, based in Beverly Hills, has two plants in Woodland Hills and others in Van Nuys, Moorpark, Agoura Hills and Chatsworth. The company reported little change, with just five fewer employees than last year. Employment is expected to be about the same next year, Litton spokesman John Thom said.
The company reported slight overall increases at its Woodland Hills Guidance and Control division, which primarily makes military navigation systems, and at its Data Command Systems division in Agoura Hills, despite recent layoffs there. The Data Command Systems division supplies communications and radar equipment for Saudi Arabia, but is pursuing contracts from other foreign governments.
10% Increase at ITT
Litton’s Data Systems Group in Van Nuys showed a 12% drop in its work force, to 1,770.
Although the top three private-sector employers had drops in staffing, another company with significant defense interests was adding personnel.
With a diverse collection of enterprises, ITT Corp. had a dramatic 10% increase in employment, from 3,936 to 4,337. Its Gilfillan radar electronics division in Van Nuys was beefed up 15% over the year, to 2,086 workers.
But nearly 1,000 of ITT’s employees are clerks, cooks, bellhops, chambermaids and others at the Sheraton Universal and the Sheraton Premiere hotel complex in Universal City. The Sheraton Corp. is a wholly owned subsidiary of ITT, although MCA Inc. has a 50% interest in each of the two hotels.
Varied Operations
Other ITT operations in the Valley include Neo-Dyn, a Chatsworth manufacturer of pressure and temperature switches for airplanes, and Avionics of Sylmar, which has only five employees and designs military communications and navigations systems.
Following a national trend for auto makers, General Motors increased its Valley staff by more than 5% over the year, to 5,125 from 4,858. Most of the increase was at the Van Nuys auto assembly plant, which employs 4,790.
From the late 1970s until 1982, national employment figures declined. For three years, however, employment has risen, said Harry Kelly, a GM spokesman.
MCA and RCA, both ranked in the top 10, are the leading entertainment employers in the Valley, with studios in Universal City and Burbank. MCA was down nearly 5% to 4,631 workers from 4,851 a year earlier, and RCA was up more than 9%, with 2,554 workers in June.
Studio Hiring Seasonal
The entertainment business is very seasonal, studio officials say. MCA and RCA executives said their employment figures are much higher during the late-summer peak of the television production season.
RCA has 2,447 workers at NBC Studios in Burbank. Its other Valley interests include Hertz Corp. car rental agencies, which employ 50. Hertz is being sold, however, to the parent company of United Airlines.
The two top 10 companies in the health-care industry, Blue Cross of California and St. Joseph Medical Center, grew over the year.
18% Rise at Blue Cross
Blue Cross of California processes medical claims in Woodland Hills, where the company has its main office for Southern California. It also has offices in Burbank and Tarzana. Russell E. Gray, Blue Cross’ vice president for human resources, said most of the growth was in customer service and data processing as the company shifted more of those functions “where our largest accounts are.”
Gray said Blue Cross’ employment growth in the Valley--more than 18% for the year, to 2,942--would not be repeated soon.
St. Joseph, the only top 10 employer not affiliated with a national organization, had across-the-board increases in doctors, nurses, technicians, maintenance workers and others. Its work force increased 3% over the year, to 2,364.
THE VALLEY AREA’S 10 LARGEST PRIVATE-SECTOR EMPLOYERS
Number of employees June 15, 1985 June 15, 1984 1. Lockheed 17,230 17,396 2. Rockwell International 7,465 7,928 3. Litton Industries 7,420 7,425 4. General Motors 5,125 4,858 5. MCA 4,631 4,851 6. ITT 4,337 3,936 7. Hughes Aircraft 3,998 4,363 8. Blue Cross of California 2,942 2,491 9. RCA 2,554 2,333 10. St. Joseph Medical Center 2,364 2,293
Percent change 1. Lockheed -00.95% 2. Rockwell International -05.84 3. Litton Industries -00.07 4. General Motors +05.50 5. MCA -04.54 6. ITT +10.18 7. Hughes Aircraft -08.37 8. Blue Cross of California +18.11 9. RCA +09.47 10. St. Joseph Medical Center +03.10
Companies announced plans in June to merge.
