6,800 Stand to Lose Jobs If Hughes Closes Defense Plant in Fullerton
The possible closure of Hughes Aircraft’s principal defense plant in Orange County, which could mean the idling of 6,800 employees, would deal a devastating blow to the city.
Though defense cuts are anticipated despite the region’s economic recovery, the abrupt shutting of the city’s largest employer would take a toll.
“Something like this could cause a substantial impact in Fullerton’s economy,” said Anil Puri, economist for Cal State Fullerton, adding that he predicts “major defense contractors will continue making cutbacks for two to three years.”
“It’s a crushing blow if it comes to pass,” said Fullerton Mayor A.B. (Buck) Catlin, a former Hughes employee. He said the defense contractor would be missed as a good corporate neighbor that supported the city’s cultural activities.
“Any downsizing would certainly be a big loss to Fullerton,” he said. “The employees buy gasoline and shop in the stores and any type of downsizing would be unfortunate.”
Orange County Board of Supervisors Chairman Thomas F. Riley said he learned only Friday that Hughes was considering the closure of its Fullerton facility. He indicated the county would immediately begin trying to formulate a strategy to prevent such an action.
“That’s at the top of my agenda,” said Riley, who has also been participating in talks with Taco Bell executives in an attempt to keep that company in Orange County. “I was surprised to learn about this. But the climate today is such that companies are finding it more expensive to keep their operations up.”
Layoffs are a fact of life at defense plants, but that is of little consolation to the workers.
“I don’t think lobbying is going to help us,” said one Hughes employee, who asked not to be identified out of concern for his job. “I don’t think people get used to living on the edge.”
On April 26, Hughes executives told employees they are evaluating whether to shut a major plant, possibly the one in Fullerton, in the coming months.
The Fullerton plant, which consists mostly of engineering staff, makes air defense equipment, battlefield radar, shipboard display systems and anti-submarine warfare equipment.
Employees learned in a four-hour meeting with Hughes Vice Chairman Michael Smith that the Fullerton facility might close as part of cost-cutting measures. He said layoffs would definitely occur.
In March, Hughes announced a restructuring that would combine some divisions into three main operating groups.
Hughes spokesman Dan Reeder also said no decision will be made until midsummer, and he gave no indication on the numbers of workers who might lose their jobs or face relocation.
If the 37-year-old plant survives the review, its work force might actually grow as it absorbs dislocated workers from another plant. Reeder said the plant survived a similar review two years ago, when the corporation decided instead to relocate a plant from Canoga Park to Tucson. Other plants under review are one in Long Beach and two in El Segundo.
Reeder said the company is proceeding with a plan to sell 150 acres of the Fullerton plant’s 350 acres for a residential subdivision of up to 2,000 homes. The company has more than 2.8 million square feet of office space at the site.
Reaction at the Hughes plant seems divided into expressions of Angst or fatalism.
On Friday, the prospects of layoffs did not surprise a group of Hughes managers and retirees who meet monthly at Lamppost Pizza in Buena Park, not far from the Fullerton plant. The mood among the Hughes veterans was mixed. Some took the news in stride and some were upbeat; others expressed gallows humor.
“Closing a plant is an option,” joked one manager, who would not give his name. “But suicide is an option too. It’s a stupid option. The rumors are old news. The only thing they’ve done is form a task force so far.”
Another manager said he had no idea whether the task force would seriously consider shutting the whole plant and laying off everyone. It also might be difficult for the company to sell the entire property, or to quell the animosity among employees who would not want to commute to the other remaining plants, he suggested.
At least one plant employee said he was just plain scared.
“I bought a house last week and now this happens,” he said nervously. “This company doesn’t do a good enough job of communicating with the employees.”
Reeder said that the company is trying to make a quick decision because it knows how much anxiety the thought of a plant closure can cause.
The prospect of job losses is old news at the Hughes plant in Fullerton. As a result of sliding defense budgets and the end of the Cold War, the company has steadily shed employees from a peak of 15,000 in 1986.
John Stupar, a 10-year Hughes employee, was laid off from his job as a program manager at the plant in 1991. He now holds a number of part-time jobs teaching classes on business ethics at local universities.
“What bothers me is seeing a company like Hughes that is closing plants and downsizing for the sake of profit,” he said. “I see people’s jobs being lost and I see technology being lost. They’re not looking at tomorrow.”
“When I first arrived at Hughes (in Fullerton) I was amazed at the resources and technology that they had,” he said. “The possibility that it might close is a tragedy.”
Times staff writer Kevin Johnson and correspondent Mimi Ko contributed to this report.
Hughes in Fullerton
* Business: Defense division makes Adcap torpedoes, radar programs, display consoles for military equipment; systems sector involved in air traffic control and air defense systems, airport systems integration and “smart” highways and cars
* Established: 1957
* Address: 1901 W. Malvern Ave., Fullerton
* Employees: 6,800; was 15,000 during peak years
* Vice-presidents: Louis H. Kurkjian and Ken Dahlburg
* Annual revenues: $1 billion
Source: Hughes Aircraft Co.; Researched by JANICE L. JONES / Los Angeles Times
