Firms Lag in Keeping Vow to Hire More Minorities : Recovery: Many L.A. businesses are slashing their work forces or are fearful of upsetting employees.

Prodded by Los Angeles’ wrenching riots a year ago, First Interstate Bank of California recently vowed to diversify the ethnic makeup of its Board of Directors, which has a lone minority member among its nine directors.

But the bank says that although it has openings for up to three more minority directors, it is only promising to appoint one. And its Los Angeles-based corporate parent, First Interstate Bancorp, so far is standing pat with its own 17-director board, which also has just one minority member.

First Interstate says its efforts have been slowed by a lack of qualified minority board candidates. But the company’s lack of action is emblematic of the scant progress made by Southern California’s employers in boosting minority recruitment and promotion since the riots shook the city.

While much attention has been focused on the need for the business community to invest in rebuilding inner-city Los Angeles, the task of bringing more minorities into the work force and the corporate boardroom has largely been neglected. Last spring’s riots, in which 53 people died, highlighted the high unemployment rate of minorities and their underrepresentation in corporate America--long-term issues not easily corrected in a year’s time.

Nationally, the latest figures show unemployment at 6.1% for Anglos, compared with 13.5% for blacks and 11.4% for Latinos. In Los Angeles, the problem was aggravated by the estimated loss of 11,500 jobs in riot-torn, largely minority areas.

First Interstate and other big banks have announced plans to provide billions of dollars for community-development lending, which should eventually lead to new jobs in riot-afflicted areas and other distressed communities in California. And several major companies such as PepsiCo and Disney have launched new minority hiring programs locally.

Still, for all the attention to rebuilding Los Angeles, progress remains slow in transforming the ethnic mix of corporations to better reflect the communities they serve. “There are examples of companies that have committed and are actually putting people on their payroll. . . . But there are not a lot of them,” said Linda Griego, a recent Los Angeles mayoral candidate and former deputy mayor for economic development.

Many local companies hit hard by the recession--including employers that have long operated minority hiring and promotion programs--are slashing their staffs and thus are in no position to increase minority employment. “The challenge we have when the recovery comes--and it will come--is to make sure the inner city is not left out” as it was in past upturns, said Barry A. Sanders, co-chairman of Rebuild L.A.

Other employers have been unwilling to jump in, perhaps partly out of fear of spurring resentment among existing staffers, or of reverse discrimination lawsuits.

In fact, business and community leaders say, the riots in some cases have further weakened corporate ties and commitment to Los Angeles. “I see it as one more reason why employers are saying . . . ‘I’ve had it. I want to get out of here,’ ” said Louis A. Custrini, vice president of California’s Merchants and Manufacturers Assn., a lobbying and consulting group.

Among employers staying in Los Angeles, far more are tightening their security procedures than are adopting new workplace policies “on how you treat people or cultural diversity or anything like that,” Custrini said.

In the areas that suffered the brunt of the violence and looting last spring, some small grocers and retailers have avoided hiring blacks and Latinos, said Hector Brolo, the Los Angeles director of Hermandad Mexicana Nacional, an immigrant and Latino civil rights organization.

“They have been really scared of hiring minorities,” Brolo said. “They feel, ‘Why should we (minorities) be demanding jobs or competition when the minority people were the ones who ransacked the stores?’ ”

Minority workers are also frequently laid off. The owners of Paper Source, an art supplies store in the hard-hit Pico-Union district, laid off five of their 11 employees when sales fell about 50% after the riots.

“Of the people we let go, four of the five were minorities. They had the least seniority, so they were the first to go,” said Al Ricca, the store’s general manager.

The store will probably not replace the employees any time soon.

Even before the riots, “this wasn’t a very desirable area and sales were slow,” Ricca said. “But the riots were an additional straw that broke our backs. People have had a bad taste in their mouths and have been reluctant to shop here ever since.”

Still, here and there, new minority employment programs have emerged.

Big companies such as PepsiCo and Paramount Studios have teamed up with the Los Angeles Renaissance Program, an affiliate of Los Angeles’ First African Methodist Episcopal Church, to provide jobs for minority workers. Disney launched a summer hiring program last year, and this year has expanded it to include 300 jobs for minority youths and adults at Disneyland and the Disneyland Hotel in Anaheim.

Some lower-profile companies also have expanded their minority hiring. North Hollywood-based Technicolor Inc. set aside 24 openings at its Camarillo plant for black and Latino workers from South-Central Los Angeles.

David R. Elliott, Technicolor’s senior vice president and chief administrative officer, said that he and Chief Executive Tom Epley were in New York when the riots broke out and that they were horrified by what they saw on the television news. “We felt we had to do something,” Elliott said.

He said he is satisfied with the results. Half of the first 24 people hired last June for the plant’s packaging department have left, but Elliott said that percentage squares with normal turnover. One of the original hires, Bruce Brown, a former aerospace worker who had been unemployed for two years, has earned a promotion to a quality control job.

But the program got off to a rough start. Company executives blame, in part, cultural differences between new African-American hires from inner-city South-Central and the plant’s largely rural, Latino work force from Ventura County.

“There was some feeling that these people (the new employees from South-Central) wouldn’t work hard, and that maybe they would be gangbangers or whatever,” Elliott said.

Also, the company’s hiring policy had been to hire workers on a temporary basis and to offer permanent jobs to those who did the best. So when the South-Central workers were immediately given permanent jobs, without a trial period, temporary employees were upset.

One worker took out his anger by using a key to scrape the side of a van used to transport the South-Central workers. In other instances, “They didn’t seem like they were willing to show us anything,” Brown, 41, said. “They would watch us make mistakes and laugh at us.”

Before long, though, friction eased. Managers let employees know they would not tolerate any trouble. More important, the existing employees “saw us come in, willing to work, and we held our own,” Brown said.

But heightened race-related tensions have surfaced at other Southern California workplaces, too, over the past year, including in the newsroom of the Los Angeles Times. During the riots, some minority reporters complained that they had not gotten the best assignments and were exposed to more danger than Anglo reporters. Editors denied the charges, and office relations improved with an increase in minority hiring and the addition of a weekly City Times section and Voices pages focusing more attention on the inner city.

Diversity awareness trainers, hired to provoke freewheeling workplace discussion sessions about race relations, have noticed that some employees have gotten more inhibited over the last year.

“It’s not so much the questions they are asking as it is the questions they are avoiding. Especially among companies located in central L.A., you find a heightened sense of fear about dealing with the race and culture issues,” said Norman S. Lafond, president of the consulting firm Lafond, Fillo & Associates.

Still, diversity training is one of the few types of outreach efforts to significantly grow since the riots.

“We are getting about a third more calls,” said Lee Gardenswartz, co-owner of Gardenswartz & Rowe, a consulting firm in Marina del Rey. “People used to call us for stress management and team-building. Now almost all the phone calls we get are about the diversity issue. A lot of organizations are talking about the prejudices and stereotypes that are affecting working relationships.”

For the most part, however, employers appear to be largely standing pat with their personnel practices.

Michael A. Straeter, president of the United Food and Commercial Workers Union, Local 1442, in Santa Monica, said he has not seen any evidence of changes among the local supermarket chains he negotiates with.

Making any abrupt changes “would imply that they were doing something wrong to begin with,” said Straeter, who also is president of the Los Angeles chapter of the Industrial Relations Research Assn.

Those involved in the rebuilding effort express concern that even the companies that have announced special programs will fail to deliver on their promises. The favorable corporate responses, more often than not, stemmed from hopes for “good public relations and not from a genuine desire to empower people,” said John Bryant, who heads Operation Hope, a consortium of Los Angeles banks formed through Rebuild L.A. shortly after the civil unrest.

But Bryant managed to pull hope from the rubble of a post-riot year that he said has seen only a smattering of change in the workplace.

“Have companies gone full circle in their thinking on hiring people of color? No, it has gone about a quarter turn. But people are now talking about this issue on a daily basis. That’s a first step. And to me, that’s a miracle.”