Northrop Layoffs Seen as Prelude to Closure : Jobs: Company officials won’t talk about the Newbury Park plant’s future, but workers and business leaders are worried.
Layoffs at the giant Northrop Corp. aircraft plant in Newbury Park--the county’s largest industrial employer--raised concerns last week among the plant’s 2,000 employees that the aerospace firm may be quietly moving toward a pullout from Ventura County.
As the company laid off 116 workers at the Newbury Park facility, business leaders in Thousand Oaks voiced fears that closure of the plant by Northrop could send the area’s economy into a tailspin.
The worries expressed by both Northrop employees and area business leaders about the possible departure of Northrop--a mainstay of the local economy for almost three decades--were met with official silence from the economically troubled aerospace firm. A spokesman for the company, which has been hit hard by reductions in federal defense spending, said only that “no decision has been made” about the fate of the Newbury Park plant.
According to company sources, however, a study was recently completed on the feasibility of shutting down the Newbury Park facility. Among options studied, the sources said, were transferring Newbury Park operations to other Northrop facilities in Hawthorne or Perry, Ga.
While company officials refused to discuss any details of the company’s plans for the Newbury Park plant, many Northrop employees reached by The Times were assuming the worst.
“You can see it all around the company; everything is getting real tight,” said Tim White, a program controller who was told last week that he is one of 116 people being laid off at the site. “This is the first wave.”
About 6% of the 2,000 employees at the Newbury Park site have been told that they are being laid off, part of a program to cut 3,000 of 41,000 Northrop jobs nationwide. Some employees will be placed in the Hawthorne facility. Others will be out of jobs by the end of this week.
Several employees at the Newbury Park plant said the work force there is preoccupied with trying to calculate the company’s next move.
“We’re just waiting, waiting for the ax to fall,” said one worker who asked not to be identified for fear of losing his job.
“Everyone says they’re going to close the site,” another employee said. “It’s just a matter of when.”
Northrop’s latest round of job reductions is intended mainly to streamline operations and increase efficiency, a company spokesman said. Congressional pressure for even steeper reductions in Pentagon spending could lead to additional layoffs.
Northrop President Kent Kresa told employees last month that company officials will continue to search for ways to reduce costs and eliminate non-productive facilities. The company, which makes missiles and other military hardware, wants to be out of debt by the mid-1990s. It is now about $1 billion in debt.
One business analyst said it would be practical for the company to sell the 100-acre Newbury Park facility, which is in a prime area near Thousand Oaks, and move the programs to the Hawthorne site.
According to employees, the downturn became noticeable two years ago. A key target missile project was lost to another aerospace firm. There were delays in funding for the Tacit Rainbow missile program. And Boeing Co. awarded the production of the plastic composite panels used in the 747 jumbo jet to another company.
“You could see things were starting to fall apart,” a former employee said.
Lawrence Harris, an analyst at Bateman Eichler, Hill Richards, said: “It certainly makes sense for the company to consolidate the facility.” He estimated that the land and the buildings in Newbury Park could be sold for about $132 million.
Similar sales have occurred recently.
In January, the company decided to sell its Anaheim facility to Taiyo Development U.S.A. of Torrance and its two Century City office buildings to the California State Teachers Retirement System. The sale of the Anaheim facility and the office buildings raised about $250 million, company officials said.
But there apparently are other options besides closing the Newbury Park plant. According to sources, officials have studied moving the programs at the plant to other sites, including those in Hawthorne and Georgia. And to some extent, transfers already have taken place. Over the past few years some of the managers at the plant have been moved to Hawthorne.
“I could see it coming. I guess that was one of the reasons I retired,” said John VanHamersveld, who has worked as an engineer for the company for about 40 years. “It was very frustrating to work under conditions where you didn’t know what was going to happen the next day.”
Steve Rubenstein, the president of the Conejo Valley Chamber of Commerce, said he is monitoring the situation at Northrop carefully.
“I’m very concerned about it,” he said.
If Northrop pulls out, the already soft Thousand Oaks real estate market would suffer, Rubenstein said. He said that about 75% of the employees at Northrop live in the Thousand Oaks area. If they were to relocate and sell their homes, it would create a glut on the market.
Local businesses dependent on Northrop contracts would also suffer, business leaders said.
“They do business throughout the community,” said Suzanne Lewis, a technical writer who had a contract with Northrop. “They contract with the local mechanics, the local print shops. If Northrop leaves, it’s going to cause a great hole in the economy.”
Bob Biery, the finance director of Thousand Oaks, was more optimistic.
“If the company pulls out in phases and the community continues to grow, new industry will come in and offset the loss,” Biery said. “It would be a shock at first,” but the economy would survive, he said.
Still, little could be done to mend the social impact a plant closure would have on the Thousand Oaks area, community leaders said. Since the plant was opened in the early 1960s, it has grown with the community.
“Northrop has been a wonderful neighbor,” Rubenstein said.
Among Northrop employees, the Newbury Park facility has long been known as the company’s “country club.” On the weekends, employees go to the 100-acre site--which reaches into the hills of the Wildwood section and includes a stream and grassy park areas--for picnics and get-togethers.
“There was a feeling of togetherness,” said Park Irvine, who recently retired from the Newbury Park site. “People knew each other. It was a good place to work.”
The company has been a major contributor to the United Way of Ventura County and an active participant in the annual Conejo Valley March of Dimes Walk-a-Thon. Its employees also have held key roles in the community.
The Newbury Park site once built the parachutes for the landing of the space capsules for the Apollo program.
“We were the company that brought the astronauts home,” Irvine said. “We were very proud of that.”
The plant today produces target drones used by the Navy at the Pacific Missile Test Center at Point Mugu, plastic composite parts for aircraft subassemblies for the Hawthorne division and some composite parts for the B-2 bomber.
The drones are considered the backbone of the operation.
Irvine said that because of the pride that Northrop’s employees have felt for both the company and the Newbury Park community, the layoffs and rumors are difficult for him to take.
“It’s like losing an old friend,” he said. “But, I guess everything depends on the bottom line.”
