Chevron to Close Plant in La Habra
Chevron Corp. said Thursday it plans to sell its technology center in La Habra, eliminating at least 330 high-paying jobs in Orange County’s northernmost city and severing its historic ties with the Southland’s once-formidable oil industry.
The move will cost La Habra one of its largest employers and follows last year’s closing of the Friendly Hills Regional Medical Center, the city’s only hospital, with nearly 1,000 employees.
“Oh gosh, that’s depressing,” said Bette Frazier, president of the Friends of the La Habra Library and a 42-year resident of the city. “I know they’ve scaled back over the last few years, but I thought they were still there. I love this town with all my heart. You hate to see things like that happen.”
The fate of an additional 190 marketing employees headquartered at Chevron’s 27-acre La Habra campus still is undecided.
Most of the engineers and geologists at the facility will be transferred to the San Francisco area as part of Chevron’s effort to consolidate operations and cut long-term operating costs.
With the closing of the Chevron facility, Unocal’s Fred L. Hartley Center--home to 650 corporate and business group employees in Brea--will be the last reminder of the petroleum industry’s presence in the region.
But La Habra officials said that any immediate economic blow could be quickly dispelled when Chevron sells the complex. Whatever replaces it will bring in more tax revenue for the city of 55,000 and could even provide a larger employment base, they said.
Most of the workers being transferred by Chevron don’t live in La Habra. And because the land has been owned by the oil company for almost a century, its tax value has been kept artificially low by the statewide property tax limit initiative--Proposition 13--passed by voters in 1978.
Whatever replaces the Chevron facility “could generate more money” for the city, said economic development director Jim Flora. The property is zoned for commercial or industrial use.
Revenue to the city from the Chevron property now is “such a small percentage of the budget you may not even be able to see it,” Flora said.
“When our hospital left, we knew it would have an effect on our city because we would have no hospital,” said Julie Schweizer, executive director of the city’s Chamber of Commerce. “But it’s hard to predict what will happen here.”
The community will miss more than just whatever tax money Chevron brings in.
The company and its employees “have been a major supporter of many charitable organizations. We will miss them deeply,” council member G. Steve Simonian said.
“It’s going to be a big loss” because of Chevron’s support of civic and philanthropic organizations in the city, said Mayor Juan M. Garcia, who has worked at the technology center almost 18 years and now is grappling with the choice of transferring north to keep his job or staying in town to hang onto his political post.
Chevron, the nation’s fourth-largest oil firm, said it plans to put the La Habra complex on the market next year after refurbishing it. The property includes eight office buildings built between 1948 and 1982.
The company said the technology office, which supports its international oil and gas exploration and production efforts, will be moved to Chevron’s offices in San Ramon and Richmond starting in April. Chevron officials said they will announce plans within a few weeks for the regional retail marketing unit now at the La Habra site.
The retail operation is expected to remain in Southern California, a company official said.
Relocation of the technology unit is expected to take a year. Chevron officials could not say how many employees would be transferred and how many would be laid off. “There will be some job losses, though,” a spokeswoman said.
General manager Bob Laing, who announced the pending move to employees early Thursday, said feelings were mixed but that most understood and agreed with the business reasons.
“These are pretty intelligent people,” he said. “They know what the company is doing and what the benefit will be. But there were mixed emotions about leaving. Some people said they were ready to move to the Bay Area, others said they didn’t know how they would do it.”
The property is the last remnant of a major Chevron oil field in North County and one of the last reminders of La Habra’s roots.
La Habra, like Brea, developed around two industries: agriculture and oil. The city, founded in 1896, still celebrates the agricultural part of its heritage with the Corn Festival parade and carnival each summer.
In the late 1920s, the city was home to one of Southern California’s oddest agricultural pursuits--a large ostrich farm that was started to take advantage of the then-booming market for ostrich plumes for women’s hats.
The former farm site was developed as a housing tract in the early 1970s--the same fate that had already befallen most the area’s fields, farms and orchards as the value of land zoned for homes and offices far outstripped the value of land held for agriculture.
But the oil fields, which were developed in the late 1890s and early 1900s, retained their value as petroleum-producing properties into the mid-1980s.
Chevron, whose Orange County field once covered 1,000 acres in La Habra, La Mirada and Fullerton, built its research center on the La Habra portion of the field in 1948, about the same time rival Union Oil Co., now Unocal, built a research center in Brea.
Employment at the Chevron technology complex grew slowly, peaking at just under 900 employees in the late 1970s when the retail marketing operation moved there.
Chevron sold 371 acres of its La Habra property in 1995 as part of a divestiture of 18,000 acres of land, some of it played-out oil fields, the rest investment properties acquired over the years when the company was involved in housing development.
The company says it now is cutting costs to weather a prolonged period of low oil prices that has slashed its earnings. Chevron’s earnings tumbled 40% to $1.98 billion last year, while sales declined about 14% to $30 billion from $35 billion.
“We said in December that our cost-cutting projection for 1999 was $500 million,” spokeswoman Dawn Soper said. “There will be costs to the company this year to consolidate and realign this operation, but we expect that over the long term the efficiencies we realize will reduce operating costs significantly.”
State law will require Chevron to clean up any toxic or hazardous materials on the property, which once was part of a producing oil field and also includes a small chemical research laboratory.
But the company already has done a lot of cleanup over the years, Soper said. Until a survey of the property is competed, the amount of remaining environmental cleanup can’t be estimated, she said.
