Weapon Maker Will Sell Two S.D. Divisions
In a stunning announcement Wednesday, General Dynamics said it would sell off its San Diego-based Convair and Electronics divisions, putting the jobs of 10,400 San Diegans in limbo.
General Dynamics, San Diego’s largest private employer, said it was very close to completing the sale of Convair’s missile operation, whose 9,600 employees combined in San Diego and Pomona manufacture the Tomahawk cruise missile and other weapon systems. Of those, 4,500 are based in San Diego County.
At General Dynamics’ annual shareholders meeting Wednesday in Lima, Ohio, Chairman William Anders declined to say which company is negotiating to buy the missile division. Industry sources, however, identified the likely buyer as Hughes Aircraft.
The sale of the General Dynamics operations will occur as soon as “appropriate” deals can be arranged, Anders said. He also declined to comment on details surrounding the planned sales, or to “set a timetable for selling divisions,” according to the Associated Press.
In December, Anders sparked speculation about a possible sale of local General Dynamics operations when he said the company would react to shrinking Defense Department contracts by concentrating on its core businesses--fighter aircraft, armored vehicles and submarines.
The non-core businesses included the San Diego-based plants at Lindbergh Field and in Kearny Mesa that manufacture Tomahawk cruise missiles, MD-11 jetliner fuselages and assorted electronics gear for the military. Convair has about 8,000 employees; the Electronics company has 2,400.
Of General Dynamics’ 13,500 employees in the county, only 3,100 in its Space Systems division are guaranteed jobs with the parent firm.
Anders’ announcement was good news for employees at Space Systems, General Dynamics’ San Diego-based division that builds and launches Atlas rockets and the second stage of Centaur rockets. Earlier, Anders had said the rocket division was not a core business and could be sold.
San Diego civic and business leaders expressed shock and gloom about what the news portends for the city’s economy.
“The best case would be that someone purchases Convair, expands operations and hires more people. The worst case is that someone buys them, moves them, and we lose all those jobs. More likely, it will be something in between,” said Max Schetter, economic research director at the Greater San Diego Chamber of Commerce.
Dan Pegg, executive director of the San Diego Economic Development Corp., said the planned sale would be a “devastating blow . . . if Convair were to be sold and moved. We can deal with slow attrition . . . but when you take a significant hit all at once, you have the unemployed people on the market all at the same time, and you have a ripple effect of a significant proportion.”
Mayor Maureen O’Connor said Wednesday that she will create a task force to try to keep as many General Dynamics jobs in San Diego as possible.
Employees, who for months have lived with rumors about the company’s fate, reacted Wednesday with stunned disappointment.
“They didn’t give us a chance,” complained a Convair employee who learned about the fate of her company from the newspaper she purchased outside the Convair plant near Lindbergh Field on Wednesday afternoon. “They didn’t want to give us time to prove ourselves . . . the (Convair) missile program could have been kept.”
“We’ve seen a lot of good people going out the door in recent months,” said Dal Kuhlman, 56, who joined General Dynamics’ Convair operation 36 years ago. “And I think we’ll start to see a lot of retirements--early, unplanned retirements.”
Word that the longtime San Diego-based divisions are on the block was the latest in a string of bad news for the defense contractor’s local employees.
Just last week, General Dynamics announced it had speeded up the pace of continuing layoffs at Convair after McDonnell Douglas reduced the number of MD-11 fuselages that the division’s employees build in San Diego.
Employees also were shocked last year when the Department of Defense eliminated a contract for an advanced cruise missile, a cutback that prompted additional layoffs. In January, Robert Earl Mack, a fired Convair employee, allegedly shot and killed Michael Konz, a General Dynamics human resources specialist, and severely injured James English, another company executive.
Employment is headed “down, down and down,” Mike Keel, vice president of General Dynamics’ missiles and electronics divisions, said recently. “It’s just a matter of how fast we’re going to go down and how low we’re going to get to.”
But William Hickey Jr., president of the International Assn. of Machinists’ Local 1125 on Wednesday argued that the layoffs “are designed to drive the profit margin way up to make the divisions look attractive (to potential buyers). But it’s a false barometer because Anders is soon going to get to the point where work is not going to get done. You can’t keep laying people off and keep production up.”
William Otterson, director of UC San Diego’s Connect program, which promotes growth of high-technology companies, criticized the timing of the General Dynamics announcement.
“It’s not a good idea to announce a sale of a company without having the details answered--who is buying, how many people will lose their jobs, are they going to move it out of town,” Otterson said. “That’s because employees always assume the worst, which is that they are going to lose their jobs. So they start looking for replacement jobs, and the best employees will leave first.”
When General Dynamics first suggested that its San Diego-based businesses might be for sale, a small but growing number of San Diegans began pushing the defense contractor to convert its plants to produce peacetime products.
But, during a speech late last year, Anders dashed hopes that the giant company would consider conversion from defense by saying that “sword makers don’t make good and affordable plowshares.”
Given continuing Defense Department cuts, San Diegans have known for some time that the city eventually would take “a fairly big hit,” said Kurt Chilcott, the city of San Diego’s deputy director for economic development. “We’ve been dodging the bullet in comparison with other communities that have lost considerably more employment than we have.”
Convair has been a major presence in San Diego since 1935, when aviation pioneer Reuben Fleet moved Consolidated Aircraft to town from Buffalo, N.Y. The company at first manufactured PT-3 “Husky” propeller--driven biplanes, the standard trainer for Army and Navy pilots between the world wars.
But the company boomed during World War II, becoming the largest supplier of B-24 Liberators, a long range heavy bomber, and, in the process, the world’s largest aircraft manufacturer. The Convair name appeared in 1943, shortly after Consolidated Aircraft merged with San Diego-based Vultee to form Consolidated Vultee Aircraft.
The Convair name stuck through the years, surviving even after the company was purchased by Atlas Corp. in 1947 and then by General Dynamics in 1954.
Times staff writer Ralph Vartabedian contributed to this story.
General Dynamics Employment San Diego Total: 13,500 Convair: 8,000
missile operations: 4,500 (also has 5,100 employees in Pomona)
MD-11 operations: 3,500 Electronics: 2,400 Space Systems Division: 3,100 (also has 4,400 at other locations)
Buildings’ Property Square Footage Acreage A. Kearny Mesa 1,009,645 232 B. Lindbergh Field 2,758,638 99 C. Air Force Plant 19 718,551 82 D. Harbor Drive 102,458 47 E. Sycamore Canyon 113,678 2,420 F. Century Park 2,175 20 G. Imperial Valley 75,650 11 H. Tijuana-Calitec 52,000 3 TOTAL 4,832,793 2,914
Source: General Dynamics
