Southern Pacific Will Close Down Historic Headquarters in S.F.

Times Staff Writer

Santa Fe Southern Pacific Corp. acknowledged Wednesday that the San Francisco headquarters of the Southern Pacific Railroad, once the seat of political and economic power in California, will be dismantled after a pending merger with Santa Fe Railway is completed.

At least 322 jobs will be abolished and another 300 workers will be offered transfers to Chicago or Topeka, Kan., said a spokesman for Chicago-based Santa Fe Southern Pacific, the holding company formed to own both railroads.

The West Coast divisional headquarters of the combined railroad will move to Los Angeles, but the company has announced no plans to move any San Francisco employees to that office.

The fate of another 1,400 San Francisco-based employees of Southern Pacific in data processing, accounting and several other departments has yet to be determined, the spokesman said.

Outside Jurisdiction

"No decisions have been made," he insisted, adding that no decision will be made until the merger takes place.

The spokesman said Santa Fe executive Jim R. Fitzgerald was "talking about people outside his jurisdiction" when he told a group of employees, and later the San Francisco Chronicle, that all 2,000 Southern Pacific employees at the company's headquarters building would be let go or transferred once the merger is completed.

Fitzgerald is a Santa Fe vice president with responsibility for operations of the combined railroads. But he will not have responsibility for such areas as sales, accounting or data processing, the spokesman said.

Fitzgerald, whose earlier remarks were videotaped by an employee and widely circulated at the company's headquarters, declined to comment Wednesday.

The closing of Southern Pacific's headquarters "marks the end of a chapter in California history," said Richard J. Orsi, a historian at Cal State Hayward who is writing a book on the Southern Pacific's early years. "The rolling stock and the roadbeds will survive, but the single most important corporate entity in California's past will disappear."

Some Already Merged

Southern Pacific's headquarters at One Market Street is an 11-story red-brick building built to replace a structure destroyed in the city's 1906 earthquake and fire. Its facade is in stark contrast to the modern high-rise office buildings that have arisen in the city's nearby financial district.

Southern Pacific and Santa Fe, longtime competitors on Western rail routes, agreed to merge in 1983, and all of their non-railroad operations have been combined for nearly two years. Real estate operations are based in San Francisco, a pipeline company is headquartered in Los Angeles and oil and timber operations are in Houston.

The Interstate Commerce Commission is expected to approve the merger of the two railroads early next year. In the meantime, they have continued to operate under separate management. The two companies previously estimated that more than 11,300 jobs would be eliminated by the merger, but they had not disclosed that the historic San Francisco office would be closed.

Over the past year, Southern Pacific Railroad's employment has shrunk to about 31,000 from 33,500 as a result of attrition and layoffs. Including both railroads, Santa Fe Southern Pacific employs 63,600 workers.

At the One Market Street building Wednesday, the mood was bleak.

"This is a mushroom merger," one middle manager complained. "They're keeping us in the dark and feeding us manure, and next we'll all be canned."

The decision to move the West Coast divisional headquarters to Los Angeles added to the gloom. Another division will be based in Kansas City and a third in Houston.

Because Southern Pacific dominated rail and steamship shipping in California for decades, it played a key role in the development of the state's economy and often dictated the direction of its government, but it earned the enmity of farm, labor and political movements at the turn of the century by deploying an arsenal of weapons, including economic coercion and bribery, to defend its domain against competitors.

To promote California living and burnish its own tarnished image, the railroad started Sunset magazine in 1898. The publication was sold to the Lane family in 1931, which has published it ever since.

The railroad's domination of California shipping was finally broken after the election in 1910 of progressive Republican Hiram Johnson as governor. He ran on the promise of breaking Southern Pacific's power over state affairs.

One advertisement placed by the Southern Pacific called California "a climate for health and wealth without cyclones or buzzards."

Another extolled the state as "the laborer's paradise" with "salubrious climate, fertile soil, no severe winters, no blight or insect pests!"

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