Animation in Red Ink : Cartoon factory Filmation is under orders to cut costs, and a plan to shift some of its production overseas has alienated workers.

The cartoons Lou Scheimer makes for kids follow a predictable pattern. When the half hour is up, good triumphs and everyone is happy.

Unfortunately for Scheimer, in real life, endings aren’t as quite as easy to write as in his cartoon scripts.

Twenty-five years ago next month, Scheimer started Filmation with a $5,000 loan from his mother-in-law, a one-room office and two employees. With such hits as “Fat Albert and the Cosby Kids,” “He-Man and the Masters of the Universe” and “Shazam,” Scheimer built one of the nation’s top cartoon factories.

He also made himself rich. He sold Filmation in 1969 for stock to cable operator Teleprompter. In 1981, Westinghouse, an electronics and broadcasting giant with sales last year of $10.7 billion, bought Teleprompter. At the time, Scheimer’s Teleprompter stock reportedly was worth more than $5 million. He stayed on as Filmation’s president.

But Scheimer, 58, is hardly enjoying Filmation’s silver anniversary. Westinghouse has told him to cut costs. So Scheimer has given his workers and their union six months’ notice that he must move some of the studio’s production work from its Woodland Hills headquarters to the Far East, thus alienating a veteran work force.

“This has been a very stressful few months,” he said.

With nearly 600 employees, Filmation is the largest cartoon factory in the United States, based on number of workers, and it is the last to do all of its television cartoon work domestically. The others, including Disney, have shipped much of their coloring and drawing work for television overseas, leaving only creative functions such as script writing and story development in the United States.

About 125 Filmation workers will lose their jobs once the work is shipped overseas, Scheimer said. Leaders of the Motion Picture Screen Cartoonists Union, who are fighting the plan and insist their contract with Filmation prohibits the company from moving the work, contend 200 workers may lose their jobs.

Both sides agree that the workers are unlikely to find new jobs in animation because so little work is done here.

But Scheimer argues that he has no choice. Filmation, he said, will suffer only its second loss in 25 years this year, but he will not disclose details. Filmation is believed to have revenue of more than $20 million annually, and one executive said it expects to lose millions of dollars this year.

“There’s no reason for Westinghouse to want to lose money on this thing,” Scheimer said.

Westinghouse spokesman Charles Furlong said competition forced Westinghouse to move work overseas. “We think we have fought longer than anyone to preserve the domestic production of animation,” he said.

Part of the problem is a glut of cartoons that has fragmented the children’s audience. Thirty-second television ads for syndicated cartoon shows sell for less than $7,000 today, Scheimer said, compared to about $15,000 four years ago. The added competition puts a premium on cutting costs. In Japan, Korea or Taiwan, Scheimer said, a $350,000 half-hour cartoon segment can be produced for 40% less than in the United States. Some animators overseas earn less than $1 an hour, he said.

Adding to the dispute is Scheimer’s years-long campaign against shipping animation work overseas, in which he argued that it placed control of the product and costs in foreign hands.

“He believes in trying to support the U.S. animation industry,” said Andy Heyward, president of cartoon rival DIC Enterprises in Encino. “He’s held out longer than anybody, but in doing so, he’s found it very difficult to compete.”

Scheimer is reluctant to discuss the pressure he is under from Westinghouse to cut costs, noting only that “you always know they are there.”

Friends, however, say the pressure is intense. “I know Lou is agonizing over it, but I know he’s in a bind. If it weren’t for the fact he has a parent company, I think Lou would resist it. But Westinghouse is in business to make money,” said Allen Ducovny, one of Scheimer’s friends and a vice president for Filmation in New York.

But some Filmation workers accuse him of betraying his principles.

“Lou Scheimer is a company man now,” said Manon Washburn, a 13-year Filmation employee who colors cartoons.

Most of the Filmation workers likely to lose their jobs will be those in the “ink and paint” department, who hand-color the cartoons and earn about $900 a week, and those who transfer drawings to clear acetate strips.

These jobs would be lost eventually anyway, Scheimer said. Moving production work overseas is just an interim step. Next year, he hopes to install a $7-million complex of minicomputers at Filmation in time to work on shows for the fall 1989 TV season. Then cartoons would be colored by computer.

Union officials and workers, who are negotiating with Scheimer, say they are aware that cartoon makers are suffering tougher times. And they accept that technological advances such as computers are inevitable, hoping to retrain members to use them. What they do not accept is Scheimer’s argument that the work must be moved overseas.

Things were different in the 1950s, when Scheimer started in cartoons. An outgoing man who wears a gold monocle on a chain and has a booming voice, Scheimer grew up in Pittsburgh, graduated from Carnegie Institute of Technology with a degree in art and moved to Southern California, where he worked as a cartoon designer until forming Filmation.

Shortly after starting the company, he took on former radio disk jockey Norman Prescott as a partner and scored with the animated hit “Superman.”

He has had some misses as well. In 1974, the company produced “Uncle Croc’s Block,” starring comedian Charles Nelson Reilly dressed in a rubber crocodile suit that ran on ABC for a few weeks.

“It was the worst show I’ve ever put on the air,” said Squire Rushnell, an ABC vice president who buys children’s programs.

By contrast, Filmation’s “Fat Albert,” developed with comedian Bill Cosby and based on ghetto kids featured in Cosby’s nightclub routines, was a big hit in the 1970s. The program was lauded by television critics for dealing with such subjects as death, divorce and race that, for the most part, were unmentionable then on children’s shows.

Other television executives praise “Fat Albert,” but note that Filmation’s reputation over the long run is still as a studio that specializes in action adventures oriented to boys, such as “He-Man,” a muscular, sword-carrying super hero, now in reruns.

“Lou has done a lot of things he can be proud of, but no one accuses him of being Walt Disney,” Rushnell said.

This year, Filmation is producing 65 half-hours of the cartoon “BraveStarr” about a space-age cowboy, and it has in the works about half a dozen more shows, including “Quest of the Prairie People” about tiny people who live underground, as well as another show in which English sleuth Sherlock Holmes is transported to the 23rd Century. Scheimer plans to sell them to individual stations for their first airings, rather than to a television network.

In addition, the company is set to release feature-length cartoons “Pinocchio and the Emperor of the Night” and “Snow White and the Land of Doom” to theaters, with plans to spin off two cartoons for television based on characters featured in the movies.

It is because of Filmation’s busy schedule that some union leaders are skeptical of Scheimer’s claim of having financial problems.

“They’ve been telling us for quite a while that Westinghouse was after them, but I still don’t think they are losing money. In the long run, I think the company is still making money,” said Harry Hester, business manager for Local 839 of the cartoonists union in North Hollywood.

Hester said other studios are making money on projects done in the United States. He also notes that profits in the business can flow in years after production because of syndicated reruns, foreign rights and videocassette sales.

Scheimer insists that he still wants to keep as much work in the country as possible, but he is more realistic about the economics of making cartoons.

“The only thing that matters is how I feel about myself. If I can save 500 jobs by reducing 100, that’s a lot more reasonable than losing 600 jobs,” Scheimer said.