From Missiles to . . . : Economy: Layoffs in the defense industry hit skilled workers who may have to take cuts in pay, prestige to find new jobs.

John Fees always thought that the aerospace industry was the smart career choice.

He had seen his father’s job threatened when the railroad industry fell upon hard times. He had watched classmates lose their jobs when worldwide competition turned the nation’s automobile industry upside down.

“I was going to be the smart one, I was going to go into aerospace,” said Fees, a self-described “bureaucrat” who serves as an intermediary between government customers and missile designers at General Dynamics’ San Diego-based Convair Division.

But Fees’ planned lifetime employment in the aerospace industry evaporated earlier this month when he was handed a pink slip.

Just months before his 50th birthday, Fees joined hundreds of other highly trained San Diegans who are discovering a cruel new local trend: Job-seekers in this time of defense cuts and recession are likely to be more highly skilled, higher-income workers who will have a tougher time finding new jobs. And, when they do, they probably will have to settle for less money and prestige.

Even before General Dynamics announced plans to sell off most of its local operations, San Diego’s supply of well-paid jobs with extensive benefits was drying up, said Aurelia Koby, chief executive officer of the federally funded San Diego Consortium and Private Industry Council, or PIC, which provides job-search assistance to laid-off San Diegans.

During 1989, the average wage for a laid-off San Diegan who came into Koby’s program was $6.45 an hour, while the average wage upon returning to work was $7.22.

Now, the average wage among incoming unemployed is $13.16 an hour and “rising on a daily basis” as highly skilled employees are let go, Koby said. The average wage as they re-enter the work world is $10.59.

Laid-off General Dynamics workers have been a perfect mirror of the trend, according to PIC statistics.

The average wage for the nearly 1,700 employees who were laid off from July 1, 1991, to May 1, 1992, was $13.10. The average wage for the 635 laid-off employees who found work during that period was $10.64.

At the same time, the job assistance program’s workload has mushroomed. During 1989, the agency helped 332 laid-off San Diegans. In the year ended April 1, the number had multiplied to 1,500.

That trend is expected to increase as General Dynamics divests itself of local operations. The company has served notice that it intends to sell off its Convair and Electronics divisions, jeopardizing about 10,000 local jobs.

But even before word of those sales, layoffs at General Dynamics had grown so common that the company took office space at PIC’s office on Balboa Avenue. On Friday mornings, Lee Kelley, General Dynamics’ chief of professional staffing, leads a new group of laid-off General Dynamics employees through an orientation meeting.

During one of those meetings, Fees and nearly 30 laid-off General Dynamics employees were introduced to the office’s support staff and told of the wide array of services available to them.

Laid-off San Diegans are given use of long-distance telephones, a resume writing service, use of computers, free postage for job mailings and a dose of companionship from their fellow job seekers.

Each week, the list of laid-off San Diegans who use the center includes a greater number of higher-skilled, higher-paid employees who generally had managed to escape layoff during past recessions.

Some laid-off General Dynamics employees are finding comparable employment at high-tech employers. A bulletin board boasts of placements made with Cubic Corp, Science Applications International, Apple, Fluor and Northrop.

But an increasing number of laid-off San Diegans are being forced to take jobs that are outside their areas of expertise--if not out of town.

Bill Masuen, a 26-year defense industry veteran from Bonita who was laid off in April by General Dynamics, is a case in point.

Masuen, a senior engineer on various General Dynamics missile programs for the past 15 years, previously worked for McDonnell Douglas. While he’s still sending resumes to Southern California aerospace firms, he’s increasingly confident that his next job will be outside of the defense-contracting industry.

“Llamas,” Masuen said, when asked what he’s likely to do next. “I’m raising them. . . . I’m one of the few people in the country doing that. I think there will be a market for them.”

Masuen also is giving serious thought to becoming a manufacturers representative in a livestock products company. He is particularly interested in new agriculture and livestock products generated by the biotechnology industry.

Masuen views the economic disruption generated by the Cold War’s end as “good news even though it means we’re going to have problems for a while. . . . You can’t have real narrow blinders on anymore. . . . Defense is going to be a smaller and smaller portion of the economy in San Diego.”

That’s one of the messages being delivered by Drake Beam Morin, a national outplacement firm that General Dynamics has contracted with to counsel newly laid-off employees during weekly sessions.

Last week’s class included a secretary, several computer software experts, a cruise-missile program trouble-shooter and a senior manager who last looked for work 32 years ago.

Cliff Taylor’s view of the world changed dramatically on May 12, when a pink slip arrived about a half hour before the end of his shift. Taylor immediately thought of the bills: a son in college, a baby due later this year and a monthly mortgage to pay.

But Taylor also is listening for another shoe to drop: His wife’s job at Rohr could be jeopardized by a recently announced layoff that will affect at least 12% of the Chula Vista-based company’s white-collar staff.

Taylor has been laid off before. Martin Marietta let him go from a job in Louisiana when the company halted work on the space shuttle’s external fuel tank in the wake of the Challenger explosion.

Like a surfer chasing the next wave, Taylor moved on to California. “That wave carried me across the country to San Diego,” Taylor said. “Now it’s time to swim back out and catch another wave.”

Taylor’s surfing analogy is actually textbook economics in action, according to Ross M. Starr, chairman of UC San Diego’s economics department.

“It’s just not possible for (San Diego) to retain a higher unemployment rate than the rest of the country for very long,” Starr said. “People will move to where the jobs are, or the jobs will move to San Diego.”

But if a large number of General Dynamics employees lose jobs after Convair’s missiles business is sold to Hughes Aircraft Co., an increased number of people could end up competing for a finite number of lower-paying jobs, said UC San Diego Prof. Steven P. Erie.

That “salary compression” would make it more difficult for lower-income San Diegans to enter the middle class, Erie said.

“You can ultimately see in San Diego the same nightmare that was evident in Los Angeles--the ‘Bladerunner’ scenario, with a two-class society divided along ethnic lines,” Erie said. “With the closing of Convair, there are fewer rungs available to lift people into the middle class.”

Taylor saw that kind of bleak economic condition in Louisiana, and Texas, two states whose economies were devastated by real estate and oil crashes during the 1980s. “It’s still bleak back there,” Taylor said. “They’re still digging out.”

Given the dearth of aerospace and defense-industry jobs across the nation, Taylor believes his best bet is to grab at temporary employment opportunities at General Dynamics. But Taylor acknowledged that General Dynamics is “a short term fix. . . . It’s only buying time.”

Fees, who anticipated being laid off last year, began cutting his expenses. He moved into a less expensive apartment and restricted his Christmas shopping to cash-and-carry purchases.

Some business and civic leaders believe that the tourism industry will be the county’s savior. But others, including Max Schetter, director of the Greater San Diego Chamber of Commerce’s Economic Research Bureau, caution that lifestyle changes will be forced if high-paying defense-sector jobs are replaced with lower-paying jobs in the tourism industry.

“We’re losing $35-an-hour jobs and replacing them with $10-per-hour jobs,” Schetter said.

Erie questioned the wisdom of using tourism to anchor San Diego’s economy when Los Angeles and Tijuana are trying to build stronger, wider economic bases. “You’re going to end up with this theme park and retirement village (San Diego) trapped between two 800-pound gorillas, Tijuana and L.A.”

Some economic forecasters say that pressure is pushing many higher-paid workers to leave the area.

One Convair missiles division employee who attended the Drake Beam Morin seminar this past week scoffed at the prospect of hotels and restaurants replacing high-paying industrial jobs. The lifetime San Diegan, whose father retired from Convair after 35 years, described his recent layoff notice as “a positive thing. . . . I’m leaving this town. It isn’t what it used to be when I was growing up.”