Hughes to Shift Missile Unit’s Base to Tucson
Hughes Aircraft said Wednesday that it is relocating the headquarters of its missile systems company from Canoga Park to Tucson, loosening the unit’s longstanding ties to Southern California and raising employee fears that several thousand engineering jobs will go to Tucson early next year.
Mike Smith, president of the missile unit, said the designation of Tucson as the new headquarters will not have a bearing on whether Hughes moves its engineering operations in Canoga Park, Pomona and San Diego to Tucson.
The company is studying whether to consolidate its research and development activities in Tucson and expects to reach a decision by the first quarter of 1993. But the announcement Wednesday put many employees in a state of “chaos,” according to an executive who described the mood in Canoga Park as bleak.
“People are convinced they are going to shut this place down and they are not going to pay to move a lot of people to Tucson,” the executive said.
Smith said moving the headquarters to Tucson is a “very logical thing to do,” because so much corporate activity is already devoted to the operation there. Hughes is relocating all of the production programs it acquired from General Dynamics earlier this year from California to Tucson.
Hughes acquired General Dynamics’ missile business for $450 million in May, and announced in September that it would move all of its missile production from General Dynamics plants in California to Tucson--affecting at least 4,500 jobs.
The fate of engineering staffs, however, has been up in the air. Although Southern California has lost tens of thousands of jobs to other regions of the country, it has retained virtually all of the major research centers operated by aerospace contractors.
If Hughes abandons Canoga Park, it would be a major blow and open the door to a far more damaging exodus of high-paying research jobs. In 1988, Hughes considered shutting Canoga Park but decided to move only 200 engineering jobs to Tucson.
But conditions have changed greatly since 1988. Engineers may be more inclined to relocate, because so few other jobs are available. In addition, the gloss has come off California’s lifestyle.
Today, Hughes has 1,900 design engineers and administrative employees in Canoga Park who could be affected by a relocation. In addition, the firm acquired 2,150 employees in Pomona and 1,900 in Rancho Cucamonga from General Dynamics, a large portion of whom are also engineers.
Smith said the Tucson plant has adequate office space to accommodate all of its engineers located in Southern California. Hughes already has 1,200 production engineers and 900 technicians in Tucson--out of a work force of 4,050.
Engineers in Canoga Park were astounded by the announcement, since Hughes has prided itself as the most innovative research house in the missile industry, while General Dynamics was known as a lean, low-cost producer.
“Everybody feels Hughes is abandoning its historic commitment to technical excellence,” the missile executive said. “The sense is our history is being sacrificed to be a low-cost producer.”
Smith said the headquarters relocation would have a minimal job impact, though he declined to discuss details. He said only five executives are moving from California to Arizona but declined to go any further--even to say whether the executives’ secretaries are moving.
Asked about employee concerns, Smith remarked: “It is their opinion. I get that every day. But we have not made any decision.”
An internal memorandum that Smith sent to Hughes management Wednesday provided a new organization chart for the missile operation. It shows that the unit’s top engineering executive will be a former General Dynamics official rather than a Hughes official.
