Hughes Takes Another Step Out of the State

Hughes Aircraft said Tuesday that it will build a small plant to produce television display tubes at an industrial park in Lexington, Ky., consolidating four similar operations from around the country.

The plans to locate in Kentucky follows earlier company decisions to avoid investing in California and put small manufacturing plants in Georgia, Alabama, Mississippi and South Carolina. As far back as 1983, senior Hughes Aircraft executives said they would locate future expansions outside California, citing a negative business environment here.

The Lexington plant will initially employ 200 to 250 workers, Hughes said, a minor share compared to the Los Angeles-based firm’s overall employment of 68,000. But through the years, the proportion of Hughes jobs in Southern California has dropped appreciably.

Of the 68,000 jobs corporate-wide, 69%, or 47,000, are in Southern California. In 1983, the firm had a national work force of 64,300 and 90%, or 58,100, of those workers were in Southern California.

“Most of the reductions through the years have come from the Southern California base,” said Hughes spokesman Richard Dore. “In addition, we have acquired a lot of subsidiaries, so that has expanded the base that is outside of the state.”

The Lexington plant will be located on land owned by the University of Kentucky, and Hughes Senior Vice President D. Kenneth Richardson said in a statement that the firm hopes to establish close ties to the school.

“The favorable business environment and attractive living standards make the area desirable from standpoints of both management and labor,” Richardson said in a statement, praising Kentucky but also reflecting business complaints about California.

Former Hughes Chairman Allen E. Puckett said in a 1983 interview that the company would not locate new operations in California, assailing the state for its “anti-growth environment.”