Hughes to Shut Fullerton Plant, Sources Report
Hughes Aircraft Co. will announce today that its sprawling, 37-year-old Fullerton aerospace complex will be effectively shut down over the next two years and most of the plant’s 6,800 workers either transferred or laid off, according to sources knowledgeable about the plans.
“An awful lot of good people aren’t going to survive this,” said a well-placed source, adding that some workers would be transferred to Hughes sites in El Segundo and Long Beach, while others would retire or lose their jobs. The source didn’t know how many layoffs are expected at the Fullerton facility, which opened in 1957.
The company will close more than a dozen major buildings at the 350-acre Fullerton complex, leaving open only two leased buildings where up to 700 employees now work, sources said. The vacated buildings and the land, which the company owns, are expected to be sold.
After four months of secrecy and speculation, the announcement will end an anxious wait for workers, local officials and business leaders who had lobbied Hughes to keep open the city’s largest employer, which generates millions of dollars in tax revenue and paychecks. Economic losses from the closure are expected to ripple across Orange County.
The action offers Hughes two tempting benefits: consolidation of operations amid continuing defense cutbacks and sale of prime real estate in Fullerton valued at more than $75 million. All that Hughes would retain there are two leased structures: Buildings 675 and 676, sources said.
The venerable aerospace giant manufactures ship-based radar, air traffic control equipment and large-scale air-defense systems, among them NATO’s European air defense system. The decision to close the Fullerton plant is part of a broader companywide reorganization that will involve shutting down another, still-undisclosed facility in Southern California, according to a source.
Fullerton was bracing for the announcement today.
“It’s what we feared,” said Frank M. Reid, executive vice president of the Fullerton Chamber of Commerce, after learning about the pending announcement. “It’s their business decision and it’s one they had to make. We’re going to miss them.”
Although the firm’s plans remained largely concealed from company employees and local officials, city representatives were scheduled to meet with Hughes executives after a scheduled 10 a.m. announcement to employees--a private session seen as an indication that work at the plant will be significantly scaled back or shut down entirely.
Company officials had asked Fullerton police to send an officer to monitor response to the announcement, to be delivered by Hughes Chairman C. Michael Armstrong over closed-circuit television to plants in Fullerton as well as El Segundo and Long Beach, where cutbacks were also feared. Police said the action was merely a precaution.
Lary D. Smith, a business area manager and nine-year Hughes employee, said he would be relieved at whatever the company announced today.
“A lot of people just want to know so they can get on with their lives. Everything’s been on hold; it’s been an anxious period,” he said Sunday as he headed into Building 600, the oldest on the complex. The Fullerton resident said he was prepared for the news either way: “I’ll work wherever I’m needed.”
“If the plant closes, it’s going to really hurt. This is going to really hurt all of Fullerton,” said Dorothy Petsas, co-owner of the Sunny Hills Cafe, a local restaurant that daily serves lunch to about 50 Hughes employees.
Rumors about the plant’s future have swirled like milkshakes at the restaurant, which has already felt the effects of previous cutbacks at the complex. Diners no longer have to wait in line for tables, one result of cuts in the Hughes work force, which has gone from a high of about 15,000 workers in the mid-1980s to 6,800. About 800 of those live in Fullerton, said Mayor A. B. (Buck) Catlin, himself a former Hughes engineer.
Besides the 3-million-square-foot Fullerton plant, Hughes has two complexes in El Segundo--with 7,800 employees and a combined working area of 3.3 million square feet--and a smaller, leased plant in Long Beach that employs 970 workers. Altogether, the company has 34,000 employees in California.
The four defense facilities considered for consolidation are part of Hughes Aerospace & Electronics Co., a corporate division formed in March. The consolidation, first mentioned to workers in April, reflects the latest efforts by Hughes to simplify its operations in the post-Cold War era.
The firm already shut plants in Canoga Park, San Diego and elsewhere over the past two years, consolidating missile operations and reaping greatly increased profits as a result.
The shutdown of the Fullerton plant would take up to two years in order to allow the company to finish projects.
The plant was considered vulnerable because of its potential for residential development. Hughes was already seeking permission to develop a portion of the property with houses.
City officials said that while a closure would be a severe blow to the local economy, Hughes is not the only big employer in town. Cal State Fullerton, the second-largest employer, has 2,100 workers, and Hunt-Wesson Foods Inc. employs 1,800.
“It’s not like a fish-packing plant in Alaska closing and shutting the town down,” said City Council member Chris Norby.
“But it’s big.”
Times correspondent Mimi Ko contributed to this story.
