Entire County Braces for Northrop Closing : Newbury Park: To gauge the real effect on the economy of the loss of 1,800 jobs, experts multiply each dollar in lost wages at least three times.

When Northrop Corp. closes its Newbury Park plant next year, the departure of 1,800 jobs will deliver an economic shock to the Conejo Valley that may ripple across Ventura County, business leaders and unemployment experts say.

Northrop’s decision to transfer 1,000 workers and eliminate 800 other jobs is the most significant sign so far that the county’s aerospace industry has begun a downward spiral driven by cuts in the nation’s defense budget.

It also adds another load to the county’s weakening economy that has so far managed to resist slipping into a recession.

“I hate to talk of gloom and doom, but it certainly is a big blow,” said Ralph Schumacher, an aerospace executive and president of the Ventura County Economic Development Assn. “I see it as hurting the economy across the board, and more in the immediate area because of the housing market.”

Not counting the two Navy bases, the defense industry now supports 11,400 jobs, about 4.6% of the county’s total employment. Three years ago, the industry had 14,300 workers.

Northrop is not the only major defense contractor to pull out of Ventura County this year. In May, Raytheon Co. closed its missile-tracking equipment plant in Oxnard, laying off 400 people. The facility had been a major employer in Oxnard since the 1940s.

Various divisions of Unisys Corp. in Camarillo have cut their work force by half. “They said they laid off 550 employees and there may be more when it is said and done,” said Nancy Williams, director of the county’s Economic Development Assn.

Abex’s plant in Oxnard, which manufactures aircraft pumps and valves, has laid off 60 people from its 940-person staff since the beginning of the year, said Joseph Parsons, the firm’s vice president of human resources. “Every company that has a significant defense business has to tighten up,” he said.

Indeed, despite official denials, Northrop officials have spent months weighing the decision to consolidate the 28-year-old Newbury Park plant with operations in Hawthorne and Pico Rivera, and in Perry, Ga.

In May, the company laid off 116 workers and has not filled more than 50 vacant positions. Last week, the company said it will terminate 800 more jobs, 400 through layoffs and 400 through attrition.

Area unemployment officials, who have witnessed a 30% increase in unemployment claims in recent months, are bracing themselves for another wave of jobless workers.

“It certainly isn’t good news,” said Larry Kennedy, one of several unemployment and job-training experts who met with Northrop officials on Friday. Kennedy, who manages the closest unemployment office in Simi Valley, said Northrop’s current plans to phase in layoffs over many months will make it easier to assimilate employees into the work force.

The Simi Valley office’s popular job club, which helps workers find new employment, is already swamped with applicants, mostly from the defense industry.

“We’ll find room somehow,” said Madeleine Brockwell, the club’s coordinator. With an average of 60 new people a month, the club has started a short waiting list for membership, she said. “We are not large enough to handle all the people who want help.”

Unemployment officials say they are encouraged that Northrop plans to establish its own job-placement center and offer 1,000 of its Newbury Park employees an opportunity to transfer to other plants.

It is unclear how many of these employees, most of whom live within minutes of Newbury Park, will agree to a round-trip commute--of at least two hours and possibly four hours in traffic--to Hawthorne, 49 miles away, or Pico Rivera, 61 miles away.

Some senior managers, who often make the trip to Hawthorne for meetings, say they would rather commute than move to the Los Angeles basin.

“This is my home, I have no desire to move to that area,” said Lawrence Horner, a Northrop vice president and Thousand Oaks city councilman. He predicted that many of his colleagues will not move because of their ties to the community.

“Most of us live out here because we love it,” said Daryl Reynolds, wife of Don Reynolds, a Northrop manager. As president of the Westlake High School PTA, she said she would be loath to move, especially with her son on the Westlake football team. “But I must tell you that if my husband wants to move, we’ll move.”

If hundreds of Northrop employees are forced to relocate, real estate experts fear that their departure will further depress the slumped housing market.

They are particularly concerned that dumping houses on a saturated market may hurt the viability of three nearby housing developments, Dos Vientos, MGM Ranch and Lang Ranch. “It’s a terrible time,” said Steve Rubenstein, president of the Conejo Valley Chamber of Commerce.

Ray Lamb, president of Lamb Realty, said he has witnessed other plant closures in the area and estimates that 300-400 houses will be listed over the next year.

“I don’t see people being desperate about it,” said Lamb, the largest broker in the area. “I know of at least 30 listings we’ve had for a few months for people who have been anticipating this.”

By pulling out of the county, Northrop will not only displace its own workers, economists say. Philip Bohan, economic development manager for the Job Training Policy Council in Ventura, said that to calculate the ripple effect on the area’s economy, economists multiply every dollar in lost wages at least three times.

That so-called ripple effect could cost jobs at companies that supply Northrop with everything from metal fasteners to toilet paper.

“With them closing, it’s going to definitely hurt,” said Darlene Mongeon, owner of Mongeon’s Deli on Rancho Conejo Boulevard. Northrop employees comprise nearly a third of her customers and she is anticipating a $1,000-a-month drop in business. “We’d have to lay off employees,” she said.

Gary Wood of the Employment Development Department in Oxnard said the smaller companies that provide the Newbury Park plant with materials to make parts for 747s, missiles and target drones for the military will be particularly hard hit.

“There are a lot of small companies that serve Northrop in the area, the machine shop around the corner and the circuit board shop across the street,” Wood said. Wherever Northrop moves, he said, the company will find more convenient suppliers.

Mike Greywitt, a Northrop spokesman, said company officials are trying to reassure their contractors that nothing has changed. “It is business as usual for all suppliers,” he said. “We are not shutting the whole place down. It is being phased in throughout an entire year.”

But such statements do not comfort area leaders, who heard months of official denials that a pullout was imminent. “It will affect business in the area significantly,” said Fred Raio, president of First State Bank of the Oaks, which is based in Thousand Oaks.

Meanwhile, the city of Thousand Oaks is moving to make up for the loss. It is wooing companies that might be interested in moving into the area or possibly even purchasing Northrop’s 670,000-square-foot plant on Rancho Conejo Boulevard.

City Manager Grant W. Brimhall said one high-tech company is in escrow for land in the area. Although he declined to name the company, he said it could bring as many as 700 jobs to the area, possibly some for Northrop employees.

Northrop, the county’s 10th largest defense contractor, employs 950 engineers, managers or other professionals, 500 skilled and semiskilled workers and 300 clerical workers in Newbury Park. The company has kept mum on who will be transferred and who will be laid off.

The Northrop decision follows layoffs at about two dozen other companies affecting 3,400 employees in the last 18 months, Bohan said. “A big chunk of it is defense-related, but we have had other hits in manufacturing and electronics,” he said.

As the county has developed, its economy has become diversified into retail and service industries, government, agriculture, oil and tourism.

“As far as the county economy goes, there is room to absorb some of the Northrop folks,” Bohan said. “But it won’t be as easy as it has been.”

Times staff writer Psyche Pascual contributed to this story.