Hughes Plant at Canoga Park to Remain Open : 200-300 Jobs to Be Moved to Tucson, 300 Others to Be Eliminated Over 3 Years

Hughes Aircraft will not transfer its Missile Systems Group headquarters out of Canoga Park, an option that has been under internal consideration, but it will move 200 to 300 jobs from the facility to a Hughes plant in Tucson, the company announced Tuesday.

In addition, the company said it will cut 300 other jobs at Canoga Park over the next three years in an effort to eliminate redundancies. That will leave about 2,400 employees at the San Fernando Valley facility, compared to the current 3,000.

In recent years, Hughes has faced increasing competition that has challenged its longstanding position as a leading producer of tactical missiles. The incursions of other defense contractors into its markets first prompted Hughes to cut costs and then to study whether to consolidate the missile business in Tucson.

But Hughes decided to retain its advanced design and development center at Canoga Park, meaning that a work force that includes about 1,400 engineers and scientists with graduate degrees will remain in California.

Employees Opposed Move

Such large pools of highly educated technical talent have been a key to the growth of the Southern California aerospace industry in recent years, even while some production facilities and jobs have left the state for lower wage areas.

Hughes President Malcolm R. Currie said the decision to keep the missile design staff in California was based on the “necessity to retain these . . . engineers and scientists in Southern California where they can continue close, synergistic ties with those doing similar work. . . .”

Another factor that may have been important in the decision was the very strong adverse reaction among employees at Canoga Park to the possible move to Tucson in the Arizona desert. Engineers and scientists who opposed the move had begun to wear lapel buttons that showed a cactus overlaid by a circle and slash--symbolic language for “no cactus.”

The move would have made sense only if there were a strong employee commitment to it, according to engineers at Hughes who asked not to be identified further. It would not have been possible to quickly amass a staff of highly qualified missile engineers in Tucson, they said.

“A lot of people are quite happy that we are not going,” one missile engineer remarked Tuesday. “Of course, the reason is that so many people were opposed to it.”

Theodore W. J. Wong, president of the Missile Systems Group, acknowledged that the pool of technical talent, especially at Hughes was a key factor in the decision to remain at Canoga Park. He said in a telephone interview, “I have more of an appreciation of that now than before.”

Hughes disclosed three months ago that it was considering a relocation of its 3,000-person work force at Canoga Park to Tucson, prompting appeals by city, state and national political figures in both areas. Ultimately, those political factors did not appear to be a significant issue.

One element that probably did affect the decision was the hasty retirement on May 5 of Hughes Chairman Albert Wheelon. The relocation study began under Wheelon, and he was supposed to make the final decision. Wheelon was succeeded by Currie, who was once president of the missile group.

“The thing that really kept us here is that Wheelon left,” one engineer said. “The consensus view is that Currie told the bean counters to go back and recount their beans.”

‘Tightening Up’

Wong acknowledged that the two chief executives have a difference in style, but he said the decision would have probably been the same under Wheelon.

“They are different people,” he said. “Mal (Currie) is very people oriented, and he was very sensitive to how people were going to take this,” Wong said.

The Hughes missile plant in Tucson, which is owned by the Air Force, has 6,800 employees. That is down from a peak of 9,000 in 1985. The work force there consists of a large number of engineers involved in detailed production design but not in the conception of new missiles.

The employee transfers will begin this fall. The jobs scheduled to be transferred are involved in detailed manufacturing designs, production management and related jobs in finance and contracting, according to Wong.

Wong said Hughes will create a division within the group that will help make transitions from design work done in Canoga Park to production in Tucson.

“After the planned changes are made, the group will be well placed to win a major share of forthcoming production contracts as well as critical new development programs,” Currie said in a statement. “This represents part of a tightening up of the entire corporation.”