2,000 Jobs Will Be Shifted From San Diego by Hughes
Hughes Aircraft definitely will pull Convair’s Tomahawk Cruise missile manufacturing operation and its 2,000 jobs out of San Diego if the planned acquisition of the missile unit goes through, a local business leader revealed Tuesday.
The removal of the Tomahawk operation had been viewed as likely since Hughes announced on May 11 its plan to pay $450 million for General Dynamics’ missile operations in San Diego, Pomona and Rancho Cucamonga, and merge them with Hughes’ existing missile unit with plants in Canoga Park and Tucson.
Late last week, Hughes Aircraft Vice Chairman Michael Smith, who is also head of the company’s missile systems sector, formally notified city officials about the company’s decision.
The word came at a two-hour, Friday meeting in San Diego attended by Smith, San Diego City Manager Jack McGrory, Assistant City Atty. Curtis Fitzpatrick, Greater San Diego Chamber of Commerce President Lee Grissom, and others. Grissom and a Hughes Aircraft official who asked not to be named confirmed that San Diego was put on notice that Convair missile jobs are on the way out.
The loss of the Convair missile operation figures to be a severe blow to San Diego’s status as a defense contractor and will affect not only Convair employees but those working for about 600 local subcontractors who supply goods and services to the Convair unit. Procurements for the Tomahawk, a Navy missile launched by submarines and surface ships, extend at least through 1995.
San Diego thus stands to lose all 4,500 of its Convair missile jobs over the next year or so, assuming that the Hughes acquisition goes through. About 2,500 Convair jobs associated with the advanced cruise missile that Convair builds for the Air Force are due to be phased out by the time the Air Force contract ends in August 1993.
According to the two sources, Hughes said it will move the San Diego jobs to either an underutilized Hughes plant in Tucson or to a General Dynamics Air Defense Systems Division site in Pomona. Hughes has not yet determined which facility will be the site of the consolidation or when it will occur. A decision is due in two to three weeks, sources said Tuesday.
Smith also told the meeting that General Dynamics had planned to move the cruise missile operations to Pomona before the Hughes deal came about, Grissom said. “I walked away from the meeting clearly feeling that General Dynamics had made a decision and hadn’t shared it with us,” he said.
At a press conference Tuesday, Hughes Aircraft Chairman C. Michael Armstrong announced Hughes’ intentions to cut an additional 9,000 jobs, or 15%, from his company’s payroll over the next 18 months. When asked specifically about General Dynamics’ missile operation, Smith said no decisions had been made about the logistics of the consolidation.
The 9,000 jobs to be cut are in addition to the 5,000 to 6,000 jobs that would be cut from the 16,000 combined payroll of the merged Hughes-General Dynamics missile unit, a Hughes Aircraft spokesman said Tuesday.
The International Assn. of Machinists and Aerospace Workers District Lodge 50, the San Diego labor union chapter that represents 1,200 of the 2,000 workers on the Tomahawk project, was not present at the Friday meeting, said local president and business agent Ed Maudlin.
“We are deeply disappointed that Hughes has already made this decision. But we will continue throughout the next few months to try to convince them that it’s in their best interests to remain here in San Diego,” Maudlin said. “Both the city and state are willing to try to work to give Hughes some kind of benefit for staying in San Diego.”
Hughes promised at the Friday meeting to make every effort to replace some of the cruise missile jobs that are leaving the county with expansions of other Hughes operations in San Diego, Grissom said. Hughes Aircraft employs 2,400 in San Diego County at its Carlsbad and San Diego facilities. Armstrong did not say Tuesday whether any of the new round of cuts would affect the San Diego-area operations.
“I’m disappointed about the cruise but encouraged and impressed with the Hughes individuals we met with,” Grissom said. “These were people in a position to make commitments and hold the company fast to those commitments.”
After the Hughes-proposed purchase was announced in May, San Diego politicians, business and labor officials scrambled to devise a list of incentives to persuade Hughes to keep Convair missiles jobs in San Diego. But the effort lost steam as word leaked out that a move was a virtual certainty.
It soon became clear that San Diego was in a weak competitive position in the “incentives game” against the state of Arizona, which is proposing its own list of tax breaks designed partly to attract a Hughes missiles consolidation to its largely vacant Tucson facility.
