El Segundo, the Aerospace Child, Learns Price of Peace

Every day, the mob of aerospace workers clogged the streets of little El Segundo, jamming up the boulevard, grabbing all the parking spots on Main, lining up on the sidewalk outside Wendy’s Place for lunch.

Then came the layoffs, wave after punishing wave. And El Segundo--the self-proclaimed “aerospace capital of the world”--learned the price of peace.

“In the 1980s you couldn’t eat lunch in El Segundo,” recalls Sandra Jacobs, who had to close up her greeting card shop when the boom fizzled. “Today you can almost go bowling in the middle of the street at noon.”

Once-thriving merchants shut their doors by the dozens. In the industrial canyon of Smoky Hollow, where mom-and-pop machine shops made nuts and bolts for fighter helicopters and guided missiles, lathes were unplugged and veteran employees fired.

Politicians proposed new taxes for trash pickups and street sweeping to help offset plunging revenues.

And along the hilly side streets of cozy ranch homes, streets with some of the lowest crime rates in Los Angeles, many households struggled with a secret burden of stress: Would the ax descend on them next?

“Some days I see three or four people complaining about depression, about fatigue, about a loss of interest in things they used to be interested in,” said Arnold Chanin, a local doctor. “When you’re passing from your 30s into your 40s, or your 40s into your 50s, you don’t expect the field you’ve devoted your life to to go belly up.”

All over the nation, communities are coping with the shift to a smaller national defense, with laid-off workers only the most obvious victims. Sandwich vendors that served the rank and file, printing firms that thrived on government jobs, retailers, machinists, services, entire neighborhoods all have been rattled.

Yet few places symbolize the tough transformation more graphically than El Segundo, a lifelong child of industry that first refined oil and later refined some of the world’s most dazzling defense hardware.

The sights, sounds and smells of industry are everywhere in this South Bay city of 15,223.

Neighboring towns may have unspoiled views of sand and sea; El Segundo homeowners gaze on the 144-acre Hyperion sewage treatment plant--source of the nickname “El Stinko.” (In fact, the musty odor that sometimes wafts in from the Playa del Rey plant is milder than it used to be.)

Overhead, roaring jetliners streak across the sky from next-door neighbor Los Angeles International Airport, where runways reach within a thousand feet of houses. To the south, a half dozen columns tower fortress-like over the horizon from the massive Chevron oil refinery.

At the center of it all is a tiny residential enclave, west of Sepulveda Boulevard, so sheltered that residents sometimes call their town “Mayberry.”

They have not been insulated from the economic shock of defense cuts, however.

In the mid-to-late 1980s, close to 100,000 workers descended on El Segundo each morning, many owing their livelihoods to a vast web of defense contracts handled by Hughes, Rockwell, Northrop, TRW and Aerospace Corp.

Since then, the commuter army has shrunk steadily toward 60,000, and some estimates are even lower. Everyone in town seems to know someone who lost a job or lives in fear of losing one soon. Merchants continue to suffer, as does the city budget, which faced a $2.8-million shortfall earlier this year.

In response, political leaders now talk of a new vision for El Segundo, of converting their aerospace capital into a more diverse, corporate capital. An array of industries, goes the thinking, could be lured by nearby LAX, the coming Green Line rail system and the quality of life.

“It’s got to draw somebody, just like it did in the 1930s,” says Rockwell executive George O. Wiley, referring to a huge, vacant lot where thousands once worked in an aircraft production facility. “People saw that same space and said, ‘Hey--here’s a place to build airplanes.’ Who knows what it will be this time?”

This much is clear: El Segundo--all 5.46 square miles of it--is an anomaly, a kind of Midwestern town in the middle of urban Los Angeles.

The walls between El Segundo and a threatening outside world are concrete. LAX blocks off neighborhoods to the north, Chevron’s 1,000-acre refinery guards much of the southern flank and a cluster of commercial buildings seals the city from Hawthorne and parts east. The barricade of buildings is reinforced by Interstate 405.

“You cannot just pass through El Segundo,” notes Father Alexei Smith, a local priest. “You have to want to come to El Segundo.”

Over the years, many who came have wanted to stay. Bonds of blood, marriage, school and the workplace are everywhere, bonds that extend into the past.

Councilman J. B. Wise, a broad-shouldered electrical contractor born in Oklahoma, remembers growing up in El Segundo in the 1950s and ‘60s, a time of cherry Cokes at Dick’s soda shop, an era when the city virtually shut down for the annual Little League parade.

“Ever see the program ‘Happy Days?’ ” asks Wise, 48. “That was El Segundo.”

There was no shortage of work. Residents, many of them transplanted Midwesterners, toiled in the refinery, taught in the schools, hammered together airplanes and even built Nash automobiles.

And they clung to the verities of a less-cynical, less-chaotic era, mottoes like “the harder you work, the luckier you get.”

Nowadays, there’s more bad luck than before, but there isn’t a lot of whining about it. “El Segundo people are a proud people,” declares Wise. “When they go broke, they’re not the type to go belly-aching to the welfare or to the newspapers.”

Wise’s own life illustrates the powerful community ties: He met his wife when they were 11 years old. Now she works at his company, along with Wise’s sister and one of his former City Council colleagues. His brother serves on the school board.

At Wendy’s Place, where some of the regulars have been coming since the 1940s, owner Wendy Wallace describes how El Segundo can close ranks in tough times.

“I haven’t raised my prices in two years,” says Wallace, 58, who lets patrons ring up their own checks on the old cash register. “How can I penalize my customers, who are keeping me in business right now?”

Tight community ties also seem to pay off in public safety: El Segundo had 53 robberies in 1992, U.S. Justice Department figures show, despite its swollen daytime population. Nearby Manhattan Beach, with 32,450 residents, had 72 robberies. Hawthorne, with 73,500, had 777 robberies.

El Segundo Police encourage residents to call 911, even for barking dogs. “You need anything, you call 911,” says Police Chief Tim Grimmond. “That’s what we’re here for.”

Yet small-town life has had more than one side.

Sue Carter, an active community member, appreciates El Segundo as a “fine place to raise children and a fine place to be old.” But she’ll never forget the icy greeting she received in 1948 as a bride relocating from far-off Los Angeles.

Aloof local matrons referred to her as “Catherine’s daughter-in-law” rather than by her own name. “They entirely ignored me because I was an outsider,” recalls Carter, 65. “I was a Los Angeles girl who came in and took one of the El Segundo boys.”

The wariness of outsiders lingers. Over the years, community groups have expressed fear about bowling alleys, skating rinks and fast-food eateries as potential magnets for outside troublemakers.

The city remains 91% white, according to the 1990 census, a figure that is similar to Manhattan Beach but much higher than Hawthorne. German, English and Irish are the most common ancestries. African Americans make up 1% of the population; Latinos 9%. (Overall, Los Angeles County is 41% white, 11% African American and 38% Latino.)

But any hint that El Segundo is inhospitable to nonwhites strikes a nerve with Mayor Carl Jacobson.

“We have a lot of third- and fourth-generation families in town--they keep staying here,” he says. “That’s why we have so many of one ethnic group. It’s not that anything’s been done for or against (anyone). It’s just the way things have come about.”

To really understand how things have come about is to recall that El Segundo was born as a company town, created--lock, stock and barrel--by Standard Oil. Many families are descended from the hard-working roustabouts who constructed the refinery in 1911 with the help of 500 mules.

(El Segundo means “the second.” Standard Oil had opened its first refinery a few years earlier at Richmond, in the Bay Area.)

Even now, the refinery’s heir, Chevron, remains a paternalistic presence, employing more than 1,350 workers. In the last few years it has paved parking lots at the schools and donated a $20,000 scoreboard to the high school.

Yet for all the refinery’s importance, the story of El Segundo is also the story of modern airplane-making.

Donald Douglas and Jack Northrop were among the first to set up shop six decades ago, drawn to ideal flying weather, the region’s enthusiasm for aviation--and a bounty of cheap land by Mines Field, ancestor of LAX.

North American Aviation, later to merge with Rockwell, arrived a few years later, in the mid-1930s. Eventually, TRW, the Aerospace Corp.--linked to the Los Angeles Air Force Base--and less-famous companies joined the crowd.

North American’s P-51 Mustang fighter--credited with nearly half of all enemy aircraft shot down over Europe during World War II--was mostly built in El Segundo. Surveyor 1, the first spacecraft to make a controlled soft landing on the moon, and Early Bird, the first commercial communication satellite, were designed and built in El Segundo by Hughes.

Northrop’s laboratories refined strong, light composite materials for aircraft that were later used in tennis rackets and golf clubs. TRW began work on a 17-ton orbiting telescope for NASA to detect gamma rays.

By the 1980s, a Hughes executive sat in the mayor’s office, and the corporation occupied 91 buildings in town. The daily mob of commuters caused so much gridlock that the city and private employers pooled cash to hire 10 extra traffic cops.

Kevin Bernard, 28, an El Segundo native who went to work for Northrop in 1987 as a production control clerk, remembers the optimism of a day that now seems long ago: “The people you worked with said, ‘You get laid off--but then they recall you.’ ”

Last January, Bernard lost his job. In November, he got hired as a technician for a non-defense company--at 30% less pay and a commute that sometimes takes more than an hour. “It’s kind of like starting over,” he said.

The defense crunch is, of course, just one element of the recession that lingers in California. And by some measures, El Segundo is enduring hard times better than some other cities.

Real estate values slipped 16.2% between July, 1990, and July, 1993, but that is still a shade better than the 16.9% drop for Los Angeles County overall, according to Dataquick Information Systems. Neighboring Manhattan Beach fared much better, while median property values in nearby Hermosa Beach fell further.

Nor has all the business news been grim: Mattel transferred its world headquarters to El Segundo in 1991 and employs 1,506. The toy giant--the sort of corporate citizen that city officials covet--has said it may one day build a twin office tower next door.

There also is the clatter of new life in schools, parks and neighborhoods, where the number of children has started to rise. School enrollments are up 10% in the last few years, reflecting a growing population of young renters in the city.

Yet by any measure, the defense build-down casts a tall, demoralizing shadow.

Father Smith, of Saint Andrew Russian Greek Catholic Church, recalls how one member of his congregation went through the emotional roller coaster of a layoff and a surprise rehiring, only to be dumped again.

“This happened all within a few months. The emotional toll was indescribable.”

Less than a mile away, in the gritty district of Smoky Hollow, a handful of once-thriving machine shops are barely hanging on. Others have vanished.

“It should be Sleepy Hollow now, not Smoky Hollow,” complains Norm Schiller, 72, whose shop now employs seven workers, down from a 1980s’ peak of 18.

“Many times I’ve had to dig into my personal savings to meet payroll,” he said, standing in a room of idle $16,000 lathes. “You can’t do that indefinitely.”

The pinch hurts most on the lower rungs of the economic ladder. While Schiller traded in his 1990 Lexus for a Honda Accord to save a few bucks, employee Doug Campbell unloaded his ’64 Chevy and started walking.

“I couldn’t afford the upkeep and insurance,” explains Campbell, 57, who gets by on as little as 15 hours of work some weeks. “As long as I live in El Segundo, I can walk everywhere I have to go.”

Single-parent families, young workers starting out in life, older ones who had counted on a sunny, prosperous retirement--their lives all have been disrupted.

Two years ago, Deborah Diver thought that a Rockwell layoff might actually be a good break, enabling her to launch a small business. Then her 6-year-old son was diagnosed with diabetes, and the full impact of California’s recession sunk in.

Her enterprise--renting ladies formal wear--went nowhere, like so many others downtown. Indeed, 15% to 20% of all private enterprises in El Segundo have flopped or changed hands since the aerospace peak in the 1980s, city officials estimate.

Last May, “I said: What’s the point? I give up. I quit,” recalls the 38-year-old single mother of two, on the terrace of her apartment that overlooks the refinery.

These days, she is trying to sell arts and crafts from home and hoping her younger son’s health holds up, because she doesn’t have insurance. “I’ve been making it on a wing and a prayer,” said the Ohio native who used to earn $2,600 a month as a data analyst.

Doug Somers, 54, a Hughes manager on medical leave, feels different pressures. He suffers from severe spinal disk problems and two hernias, but the prospect of getting cured is hardly joyful: A layoff awaits his return, Somers said.

The personal turmoil takes a public toll. For every job lost, the city sacrifices $131 in fees from its business license tax, which is based largely on a company’s payroll size.

Overall, revenues for El Segundo’s $30-million operating budget were almost $3 million short earlier this year--mostly due to the aerospace squeeze--prompting internal belt-tightening, a few layoffs and controversial plans to tax trash collection and street sweeping.

Tempers, meanwhile, are starting to fray. The school district recently threatened to sue the city government before officials agreed to turn over a disputed $150,000. Plans to raise $350,000 through the controversial new taxes triggered a petition drive and angry calls for a referendum.

Faced with widespread resentment, the council voted in November to kill the fees.

“I’d say we’re a city in crisis,” said Sandra Jacobs, president of the local Chamber of Commerce, referring to the ongoing financial squeeze. “Something has happened that we have to respond to.”

City leaders say the answer will have to be a version of the one that always worked before: industry. Indeed, the council recently agreed on plans to seek out new employers, a quest that once would have been laughed at.

But unlike the smoky industrial past, the vision for El Segundo’s future is of sleek, concrete-and-glass enterprises, global firms geared for the post-Cold War world.

At the moment, however, it is just a vision, and El Segundo will have to compete with much of Southern California and the nation to make it happen.

Today’s reality looks more like a brown, 53-acre wasteland that sprawls on once-productive Rockwell property by the airport. Concrete fragments are all that’s left of footings for machinery that built bombers, fighters and training planes.

Ten buildings where people used to work have been demolished on the site. The barren land awaits a buyer, its future unknown as that of the still-hopeful city that embraces it.

“There aren’t very many 50-plus-acre parcels available in Los Angeles--particularly adjacent to two major freeways, the Green Line and LAX,” says El Segundo City Manager Jim Morrison. “To me, it’s a major diamond waiting to be discovered.”

Profile: El Segundo El Segundo, a Midwestern kind of town, is sheltered from many of the problems that plague urban Los Angeles. Yet the defense downturn has brought its own kind of stresses. Incorporated: Jan. 18, 1917 Size: 5.46 square miles * Population: 15,223 Median family income: $53,215 Living below poverty level: 643 *Ethnic breadown Anglo: 90% Others: 1% Latino: 9% *A Direct Hit Close to 100,000 worked in El Segundo in the mid-to-late 1980s. Since then, the commuter army has shrunk steadily. The drop among the major aerospace employees: Hughes 1986: 35,000 Today: 16,000 *Rockwell 1985: 8,196 Today: 1,300 *Northrop 1983: 4,000 Today: 2,400 *TRW 1988: 2,371 Today: 286 *Aerospace Corp. 1989: 4,129 Today: 3,410 * Figures for population, family income and poverty level are from 1990 census

About This Series

Today’s story is the last part of an occasional series, “A Farewell to Arms: Reinventing Southern California After the Cold War.” As the massive defense buildup that shaped the region wanes, The Times examines the impact on individual workers, their families and a town.