Hughes’ Cuts Draw Complaints About Fairness

As Hughes Aircraft’s stringent effort to eliminate 6,000 jobs gains speed, a number of employees have begun to complain about how the program is being administered and whether it is being conducted fairly.

Since June, the Los Angeles-based aerospace firm has laid off 400 of its 75,000 workers and accepted the voluntary resignations of another 400, company officials said Friday. But the pace of the terminations is going to gain speed rapidly.

Hughes announced in June that, owing to a decline in its defense contracting business and an effort to become more competitive by reducing costs, it would reduce its work force by 6,000 employees by the end of the year.

“We are trying to view this as positively as possible,” said Robert G. Parke, Hughes’ director for compensation, benefits and labor relations. “We would have taken a lot fewer questions if we had done what most companies do, which is just lay people off without any benefits at all.”

The Hughes program includes giving selected employees either a cash separation payment amounting to one week of pay for every year of employment or retirement three years earlier than normal if they are near retirement age. The company expects 4,000 employees to take early retirements and 2,000 others to resign with the termination pay.

But employees say the job cutbacks, which are called the “organization transition plan,” have produced so many hard feelings that it is impairing morale.

“It is an administrative nightmare,” one scientist said. “People equally situated are being treated unequally. Lab managers who want to be aggressive can offer it (the termination options) to almost anybody, but other lab managers may not want to offer it to anybody.”

Parke acknowledged that the plan has sparked a number of complaints, but he said an equal number of employees are happy with the benefit package. “Some people say, ‘Boy, I really like this.’ Others are upset.”

Some employees are being forced to leave, while others have the option of departing voluntarily, a feature that is creating mixed signals for many who are involved.

“It is very unsettling,” another professional worker said. “Some people still don’t know if they are on the list or not. In some cases, they are on the list as a matter of courtesy. In other cases, they are on the list because they want you out.”

What’s worse, he said, is that the plan “creates a situation of managers getting rid of unpopular people, threats, rivals or anybody else they don’t like.”

Such feelings are not atypical in large-scale corporate cutbacks, though. “It is an emotional time,” Parke observed.

Tougher Competition

That is especially so because Hughes Aircraft has prided itself for decades on being one of the few defense firms that offered secure and challenging employment, thanks to its technological leadership in its field. But times have changed, and now Hughes must compete harder to win business.

Parke said Hughes expects to offer the package to 7,500 to 8,000 employees, but he declined to say how many of the 6,000 will be forced to leave and how many are expected to do so voluntarily.

In one of Hughes’ groups, the Electro-Optical Data Systems Group in El Segundo, an estimated 300 of the 1,600 individuals targeted for separation will leave involuntarily, according to well informed sources.

But Electro-Optical may be one of the harder-hit groups. Parke said four of the company’s five major groups will take reductions of about 1,000 employees, and other reductions will be scattered among smaller Hughes operations. The space and communications group, which builds commercial and military satellites, is adding employees, he said.

Counseling Available

In addition to the fairness issue, some employees have complained that the company was not prepared for the administrative workload of the job-reduction program and has fallen behind schedule.

One former Hughes employee, who accepted the cash buyout option, said he has been unable to collect his cash payments, because the administration of the plan is in such poor shape.

Park responded that some employees’ checks were delayed but that the delays have been eliminated. Those delays, he said, affected employees who left the company in the last week of May and who qualified for the plan even though it was not scheduled to start until June 1.

Park said the company has assigned and trained 50 counselors to help employees review the termination options. He noted that the company ordinarily retires 1,400 employees per year and that it now is seeking early retirements from 4,000 in a three-month period, taxing the company’s administrative capabilities.

The counseling may be an important aspect of checking some of the anxiety that employees are feeling. One particular aspect of the job reduction program that has especially riled workers is the seemingly coercive language in the termination agreement.

Concerns Over Rights

A copy of a release agreement obtained by The Times provides that employees must “release and forever discharge” the company, its executives and the board “from any and all claims”--wording that includes those involving injuries, racial prejudice, age discrimination and general labor laws.

Kenneth Walker, a 28-year Hughes veteran at the Ground Systems Group in Fullerton, said the release agreement seems to be asking workers “to sign away all their rights as an employee.”

He added, “If you don’t accept it, there seems to be a question mark about your future at Hughes.”

Parke acknowledged that workers “have questioned” the language, but said the company based it on similar separation agreements at other companies.

“We want to make sure people understand that the company is reducing its size,” Parke said. “And so we want to be very clear that, if they accept this, the likelihood of coming back is not there.”