3 Views of Life After Lockheed : Burbank: Entrepreneurs join city officials in expressing their hopes and fears in anticipation of the planned move of the aerospace giant.
Lockheed Corp.’s decision to leave Burbank is sending ripples of uncertainty through the city’s business community about what will happen after the aerospace giant packs up and leaves.
Especially in the industrial area around Burbank Airport, many small shop owners see gloomy times for their businesses. Even firms that did very little business with Lockheed could face a rough period of adjustment as city officials embark on a plan to reshape Burbank’s industrial northeast corner as a clean commercial center.
“Who knows what’s going to happen?” said William Twiss, owner of Twiss Heat Treating, which at one time did about half of its work for Lockheed, but now does less than 5%.
Burbank officials also said they are unsure how far the ripples will spread as the big fish--a company that did $6.5 million of business in Burbank last year--leaves the pond.
“Clearly, it will have an impact,” City Manager Robert R. (Bud) Ovrom said. “How big of an impact? We don’t know.”
The aerospace company announced May 8 that it was moving much of its manufacturing facilities from Burbank to Palmdale and Marietta, Ga., by the mid-1990s.
Lockheed will leave behind nearly 320 acres and is expected to lay off as many as 4,500 workers.
City officials and business leaders agreed that those businesses hardest hit by Lockheed’s move will be service industries--such as liquor stores, stationery suppliers and dry cleaners--that cater to Lockheed employees, rather than the family-owned machine shops, very few of which do any large amount of work for the aerospace company.
Rather than a small number of companies feeling a severe crunch, many businesses will notice a slight decrease in business, said Zoe Taylor, executive director of the Burbank Chamber of Commerce.
“Everybody will feel this downturn for a while,” she said.
Machine shops have been able to adapt, many owners said, because they have changed the emphasis of their production from military to commercial as defense spending has dwindled. Twiss, who once worked on parts for Lockheed airplanes, now heat-treats equipment for off-road vehicles.
Also, shops that have contracts with Lockheed are expected to continue supplying parts.
“The fact that we’re going to stop manufacturing in Burbank does not mean we’re going to stop manufacturing,” Lockheed spokesman James Ragsdale said. “It just means we’re going to be doing it in other locations. Our plans for Burbank will not affect our dealings with subcontractors.”
Even shops that did very little business with Lockheed say they are concerned about what the future holds.
Some fear they will have no place in the business enterprises that city officials envision for the area.
The City Council last month imposed temporary development controls on land around the airport, in what city officials hope is the first step toward converting the area to cleaner industries.
Burbank planners envision retail outlets along the Golden State Freeway and research and development firms closer to the airport.
“I don’t think we would fit in a high-tech area,” Twiss said. “I figure they will run hard manufacturing right out of here.”
Another issue facing small businesses is toxic waste.
Many wells in the area are contaminated with industrial solvents and several areas have polluted soil. Although shop owners do not blame Lockheed alone for the problem, they say they feel isolated by the bureaucracy of environmental agencies.
For years, Lockheed bore the brunt of criticism for the southeast Valley’s ground water and soil pollution.
But the toxics problem will not be solved by Lockheed’s departure. David Bacharwoski, an environmental specialist with the state’s Regional Water Quality Control Board, said cleanup in the area may take several years.
Small shop owners say that while Lockheed may be able to afford expensive testing and cleanup procedures, they cannot.
Yet, they will be left to clean the area and fear they may be held accountable for environmental problems that stemmed from Lockheed’s presence.
J. Wayne Dudley, vice president of DeKing Screw Products Inc., said his company is being investigated by the state’s Regional Water Quality Control Board for pollution in the soil behind his shop.
“They want us to drill down to the water table and put in a monitoring well,” he said. “They say it’s somewhere around $30,000 or $40,000. . . .We just don’t have that kind of money.”
William Twiss: 72-year-old commercial heat-treating plant operator
“We’re a commercial heat-treating plant. We started in 1941. We moved out here next door to Lockheed in 1947. We heat-treated parts on the old P-38 and at one time, probably 50% of our business was Lockheed parts.
“Within recent years, about all they’ve had coming our way was parts on the P-3. And of course, the Skunk Works. Recently, Lockheed’s dropped off to about 5% of our volume. The 5% is not going to kill us.
“I’d say after the Korean deal, during the ‘50s, that was our busiest time.
“We always got along well with their buyers, their quality control people. We worked close in hand. At one time, when Lockheed receiving was over at old building 85, which is no longer there, we used to just put our parts on an old shop cart and wheel them on over if our truck wasn’t handy.
“We’ve always had a good relationship with Lockheed. It’s always been very fair. At times, when they were $350 million short, well, they were a little slow in paying their bills. But they managed to take care of it.
“I’d say things started dropping off rather markedly with Lockheed in the last year and a half. When they dropped the L-1011, that was the main part of their hard parts. They have a lot of engineers working on paper, but that doesn’t leave any parts for us to heat-treat off the paper.
“I’d say when they quit the 1011, that’s when a good portion of their business dried up. We still keep busy with spare parts and such.
“Where we used to get maybe four or five jobs a week, now we get about four or five jobs a month. And they’re smaller lots, mostly experimental stuff. We don’t get very many production parts at all.
“We do a lot of work for off-road racing equipment. There’s a lot of work in replacing hydraulic parts.
“From what I gather, the city fathers here want this to be a fancy research and high-tech area like down in Irvine. If that’s the case, we’ll probably be moving out. I don’t think we’d fit in a high-tech place. I figure they’ll run hard manufacturing right out of here. If they get the convention center, probably all of this will go.
“Who knows what’s going to happen?”
Robert Rosales: 34-year-old liquor store owner
“The store was built in 1959. We bought it in 1980. At that time there were a lot more employees at Lockheed. We did very good business. Little by little it’s come down, come down, come down. We used to have people lined up at the deli, for liquor, to cash checks. I mean, we used to have 30 or 40 people in at a time.
“It’s pretty much really dropped off. It’s less half of what it used to be.
“I’m hoping to get a loan and try to attract a residential clientele instead of the Lockheed crowd. I’m trying to switch over from serving guys who drink half-pints to more people who are buying deli and picking up something on the way home.
“But it’s been pretty hard. I’m really lacking money right now. That’s my big, big problem. I bought the store in 1980 and the payments--about $5,000 a month--haven’t gone down. And I’ve heard my land has devaluated. It’s very difficult.
“We still have our lunch rush at 11:30 a.m., then another rush after work at 3:30 p.m.
“Our really, really big drop-off has been at night, when Lockheed used to have a swing shift, or graveyard shift. It used to be 11:30 or 12 o’clock and I’d still have a lot of people here. Now I close up at about 11 o’clock because it’s empty.
“I now have just myself and one part time, where I used to have three or four cashiers.
“It’s quite a change.
“What I’m hoping for is a steadier clientele all day long. But it’s pretty hard here because I’m in such an industrial area. I have no residentials. They’re all about a mile or so away. I guess I have to advertise.
“I’d sell if the price was right, but I haven’t gotten the right price yet. I can’t give it away. We’ve worked 10 years too hard.
“I don’t know how much longer we can stick it out.”
Geno DeVandry: 37-year-old machine shop owner
“My brother and I started working here when we were teen-agers. When my father became very ill, I started running the place. About eight years ago my brother and I bought the business from my dad.
“We did a lot of defense work and defense, as you know, is dropping off. We’re trying to make the transition to a little more commercial work, which is happening. We’ve only had one job with Lockheed the whole time we’ve been here and I think it was worth maybe $500.
“We’re called a screw shop only because we put threads on things, not because we make screws. We use a machine called the screw machine, which is the biggest problem we have because they use 200 to 300 gallons of oil in each machine.
“Things were done differently 25 years ago than they are now. People in business 25 years ago with a machine shop were not concerned about getting oil on the ground. No one knew anything about it. Things change.
“Now we are involved with the state water quality control board over problems with the property and it’s a real mess.
“They come out and put a glass cylinder in the ground and they leave it there for about a week. Then they take it back out and if they find contamination, you drill. They did, and we drilled. We spent about $80,000 in testing. What they found is that there are petroleum hydrocarbons down there. There’s also a certain amount of toluene (a component of gasoline), but we don’t even know where that came from. We’ve never used it.
“They want a work plan from us now. We can’t give them a work plan because we don’t have any money to spend on it unless we close the doors and sell things off and use the money to solve the problem. They tell us they’re not trying to put us out of business, but then they’re doing something that would put us out of business. There’s something wrong with their thinking.
“We had a growing business worth $2 (million) or 3 million and the property was worth maybe $500,000. But who would buy the property with this kind of problem? It really has no value until we can find a way to fix it. And who would buy a business that has liability with the EPA? All we have right now is equipment and assets.”
