Hughes Workers Get Prepared for the Worst : Defense: Fullerton plant’s closure by end of 1995 means transfers and 800 to 1,000 layoffs.

It’s white-knuckle time at Hughes Aircraft’s moribund plant here.

Pink slips--called “at-risk” notices here--are starting to go out at the huge Fullerton complex, which will close by the end of next year. At least 15 union workers and an undisclosed number of salaried employees have been told in recent days that they will get the ax by Christmas. Scores of more layoff notices are expected to be issued in the next month.

And on Nov. 11, most workers will also learn where they will be transferred to and when, according to a company memo from Ken Dahlberg, a senior Hughes executive in Fullerton. The 37-year-old plant employs 6,800 people, but Hughes said in mid-September that the facility’s closure would mean layoffs for 800 to 1,000 workers and transfers for most of the rest.

The sprawling Hughes complex, built on 350 acres in the sloping hills of Fullerton, employed 15,000 workers in the mid-1980s. In its 37-year history, the plant has been a major supplier of air-defense systems, and surface and anti-submarine radar systems for the Navy. But employment has been eviscerated by post-Cold War defense cuts.

Of more than two dozen buildings at the campus-like site, only two leased facilities will remain open, with up to 1,000 workers. Most of the rest of the Fullerton workers will be transferred to Hughes plants in El Segundo and Long Beach.

But some Hughes workers in Fullerton have already bolted, having concluded it is better to leave than to risk an uncertain future or endure more stress.

Rex Ford, a union steward, says the last few months have been “unbearable.”

“A lot of (workers) came to me, scared, and they don’t know what they’re going to do. Everybody’s in tears. There’s just too much gloom.”

So earlier this month, Ford, 36, turned in his union card, leaving with 5 1/2 weeks of severance pay (about $2,600 before taxes) and $1,000 in tuition reimbursement--which Ford will use to get training for a job in the medical field. “I feel a lot less stress now,” he said.

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More than 200 workers at the plant are taking a different exit at the end of this month: retirement.

Heading that long list is Louis H. Kurkjian, a 38-year veteran of Hughes. He and Dahlberg are the two corporate vice presidents who manage the Fullerton plant.

At 59, Kurkjian is six years shy of the corporation’s mandatory retirement age, but he is leaving, he says, to spend more time with his family. “I wanted to balance my time and enjoy my grandkids as they grow,” said Kurkjian, who will remain as a consultant to Hughes.

Kurkjian and others in the retirement group took the plunge partly to get in on the favorable pension premium rate before it changes on Nov. 1.

Hughes’ retirement benefits are based on an interest rate set by the Pension Benefit Guaranty Corp., the federal agency that insures pension plans. In most cases, retirement payments go down when that interest rate goes up, which is the case this year. So by retiring by Nov. 1--when the pension plan is adjusted to reflect the latest interest rate--workers can capture the higher benefits.

“That has some influence,” said Bock Louie, a scientist.

Louie is 55 and has 22 years of service at Hughes. That combination qualifies him for the so-called Hughes Magic 75 club, whose members get full retirement benefits and company-paid health insurance for life.

Louie says he has been contemplating retirement for the last two years, partly so he can spend more time with his elderly parents in Sacramento, where Louie is from. When the plant’s closure was confirmed, that was enough to tip the scale.

“It’s just time to leave,” he said. “From my perspective, Hughes has been a great company,” he added. “All the projects I’ve worked on. . . . I don’t have any complaints.”

The large number of retirements from Fullerton, however, isn’t likely to mean fewer layoffs. When Hughes announced it would shut down its facilities and sell its valuable 350-acre land in Fullerton as part of a corporate streamlining, officials said unconditionally that there would be a layoff of 4,400 workers companywide--of which Fullerton’s share is between 800 and 1,000.

“We’re on track to meet that number,” said Hughes spokesman Richard Dore.

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As has been Hughes’ practice in the past, those in Fullerton targeted for layoffs will first get at-risk notices, or warnings that their jobs are in jeopardy. Then four weeks later, they will receive pink slips with another four weeks’ notice. That’s eight weeks’ warning altogether, meaning many will be out the door around Christmastime.

“Yeah, Merry Christmas, you know,” scoffed Scott Sechman, a technician whose days are numbered. Despite 14 years at the plant, he lacks the union seniority to survive the cuts.

Some workers are trying to influence their fates. Employees at the group that makes sonar display systems for ships, originally slated to go to Tuscon, have submitted a proposal that they be relocated to Long Beach instead. Senior management is now said to be considering that plan, but company officials won’t comment.

But all most workers can do is wait and formulate a swirl of plans. Take systems engineer Curtis Henderson, who said: “We have considered moving. We are also going to try commuting if we get sent to El Segundo, but we will have to leave our three kids at day care longer. . . .”

With employees thus preoccupied, work at the plant has naturally slowed down. “There are a lot of outbreaks of discussion,” remarked one employee. Said another: “Morale is pretty bad, some people are in denial.”

Kurkjian, the senior executive, conceded that there are pockets of lagging production. But on the whole, he said, “the work ethic is back in place.”

Whether that’s true or not, one place that is bustling is Building 606, where the federally-funded career center has been established for laid-off workers. On Friday, the center hosted a job fair by Ingram Micro Inc., a Santa Ana-based distributor of personal computers. Ingram officials have told Hughes job counselors that they are looking to hire up to 200 Hughes workers by year’s end.

Hughes workers are also getting additional job-search aid, plus counseling from psychologists and motivational speakers sponsored by various employee forums that represent the interests of Asians, Latinos, African Americans, women and veterans at the plant.

About 27% of the 6,800 employees at the Fullerton site are minorities, according to company figures. And three of 10 are women. About one-third of the workers are engineers, the rest in production, finance, clerical and other supporting capacities.

Diversity figures to be a factor in layoffs and transfers because, as a federal government contractor, Hughes is required to be an affirmative action employer. But for Hughes’ protection against legal action, those accepting the layoff benefits must first sign a waiver that they will not sue the company.

Kurkjian says Hughes has made cutbacks in the past “as gracefully as it could,” and he believes the company will try harder this time. Although the current severance package isn’t up to par with past layoffs, Kurkjian said GM Hughes Electronics, the parent of Hughes Aircraft, is striving harder to place Fullerton workers at other company divisions.

Kurkjian said he, too, was pained by Fullerton’s shutdown--a decision he had little to do with. “It hurts because I grew up here,” said Kurkjian, who came to Fullerton in 1959, two years after the plant opened. “But as painful as it is, this is the right decision for the company and for the people,” he said, adding that without this step, “we would risk losing more jobs in the future.”

For his part, Kurkjian says his decision to retire--which he told Hughes management in August--was purely for personal reasons. But he adds a sober note: “I think we all recognize the world has changed. Hughes is a microcosm of what’s happening in the aerospace industry.”