THE HUGHES CUTBACKS : Anxiety Gives Way to Sorrow at Hughes : Reaction: Word of shutdown brings strong emotion both at plant and in Fullerton.

Anguish overtook uncertainty Monday as Hughes Aircraft confirmed the worst for its 6,800 workers here: Its sprawling aerospace plant nestled in the rolling hills of Fullerton since the late 1950s will be phased out over the next 16 months.

The news was delivered via closed circuit television under a big, white tent, but it was afterward, inside the two dozen buildings that make up the Hughes “campus” here, that a circus of emotions swirled throughout the day.

After months of waiting, employees learned that their lives will be changing in the months ahead. It was official--there will be retirements aplenty, layoffs throughout Hughes, and at least a transfer for just about everybody else.

But with no specifics, the announcement was just about the only topic in the halls, over the coffee pot, on the plant’s electronic mail system, on the tennis courts, at the on-site employee park, and on the streets of Fullerton outside the plant.

“It’s a bad day for Fullerton,” said Mayor A.B. (Buck) Catlin, himself a former Hughes employee. “If Hughes’ selection criteria had been the local business climate and community amenities, we would have won hands down, but unfortunately its criteria were different,” he said after visiting with Hughes representatives at City Hall on Monday afternoon.

“They stayed away from the C-word, cuts, and just talked about what it means to the company’s overall strategy,” said Mark Quezada of Pico Rivera, who talked quickly and angrily through a chain-link fence that separated a flow of reporters and other curious people from the circus-style tent where Hughes Chairman C. Michael Armstrong spoke to workers via television.

“It’s chaos here today, and nobody’s working,” said engineer Doug Erickson. “Everybody’s e-mailing everybody like crazy.” Erickson, 35, works at Hughes’ undersea systems unit in Fullerton, and expects to be offered a transfer to El Segundo. But he said, “I really don’t want to go.”

Erickson, though, was one of the lucky ones. Many Hughes workers interviewed Monday were angry because they did not know whether they would survive the layoffs, or when or where they might be transferred.

In a lengthy question-and-answer session after the company’s 10 a.m. announcement, Hughes officials said there would be a companywide layoff of 4,400 people--most of it next year--and that Fullerton would bear no more than is proportionate share. To employees, the corresponding arithmetic means about 900 positions from the Fullerton work force would be eliminated. But the company declined to give any specific figures regarding local layoffs.

With the exception of as many as 700 workers likely to remain at two leased buildings, most of the Hughes workers in Fullerton are expected to be relocated to other Hughes facilities in El Segundo and Long Beach.

And union officials added that at least one unit in Fullerton--the surface ship radar section--would be moved to Tucson. It was unclear how many people worked in this section. About 1,000 mainly production workers at the Fullerton plant are represented by the Carpenters union; the rest work as non-union engineers, computer operators and in other technical or clerical work.

“It’s hard to (take), even though we’ve seen this coming since March,” said Quezada, referring to the month when Hughes announced the creation of a new division that presaged the shutdown. The 38-year-old employee said he had worked nearly half of his life at Hughes in Fullerton as a shipping department crater and packer, and that he had braced himself for the worst. But like many of his co-workers, he had held out hope that the plant would not be shuttered.

Workers who are laid off will receive 60% of their salary for up to 12 weeks after they are dismissed, depending on their length of service, according to a severance plan announced Monday. They will also receive company-paid medical benefits for three months and $1,000 to help pay for retraining. To encourage attrition through retirements, Hughes has told workers that they must set a retirement date by Nov. 1 to guarantee their current level of benefits, which will not be enhanced after that date.

Despite the somber news, some Hughes workers were simply glad that the dreaded announcement day had arrived, and others had scheduled time off after the news to smash tennis balls or to lobby volleyballs at a family park on the hilly Hughes campus.

“We’re having an outing to blow off steam,” said senior staff engineer John Heslin as he headed to the park, racket in hand. “It’s better than sitting around morosely.”

Dozens of curious retired and former Hughes workers showed up at the 37-year-old plant Monday, and many others throughout the city with links to Hughes passed the day anxiously as they waited for information on the consolidation.

Stan French, 78, was among the first 200 people who worked at Hughes when the company opened in Fullerton in 1957. The engineer had long ago retired, but his son, Anthony French, was among the second-generation Hughes workers at Fullerton. When the elder French received a call from his son late Monday morning, he knew from his voice that the news was grim. “I feel so sorry for them,” was all Stan French could say.

Like the workers, officials at City Hall and throughout Orange County were on edge Monday. Early on, Fullerton and county officials had lobbied Hughes, arguing that it was cheaper to operate in Fullerton than at the company’s plants in El Segundo or Long Beach, which also were studied for a possible shutdown.

But by late morning, Fullerton officials learned from a two-page fax confirmation that their pitch was unsuccessful.

Catlin and other city officials knew that the Fullerton plant was vulnerable because it sits on 350 acres of prime real estate. Indeed, Hughes’ announcement Monday confirmed that the company would put most of the site--valued at well above $75 million--up for sale.

Wayne Wedin, chairman of the Orange County Economic Development Consortium and a member of the so-called Red Team to retain Hughes, said he was rather surprised by Hughes’ announcement, having expected a realignment rather than an outright closure in Fullerton. But he said the county and the city of Fullerton must focus their energy on rebuilding.

“If all the property is vacated, we have the opportunity to replace the site and provide a level of economic activity equal to or greater than before,” he said.

The idea that selling the Fullerton plant might provide a handsome windfall to Hughes only added fuel to workers’ anger.

“‘I think it’s a total sham--a shaft of the employees, people who have been here a quarter of a century,” said Ted Fick, 53, sitting at the Sunny Hills Cafe nearby the Hughes facility.

Fick was one of about 50 Hughes workers who gathered Monday at the restaurant, a favorite lunchtime spot for Hughes employees. And the restaurant’s “Daily Special” board had this message Monday: “Hughes: We’re sorry. Soup and half sandwich special $4.99.”

The Sunny Hills Cafe was one of many surrounding businesses whose lives were intertwined with that of Hughes, and the prospect of closure sent a shudder through the owners.

“I’m scared,” said L.J. Kang, owner of Son’s Auto Care Centre in Fullerton. “It will definitely affect us. About 25% of our customers are from Hughes.”

Anna Meadows, a cashier at Tummy Stuffer(, a sandwich shop in Fullerton that relied on Hughes workers for much of its business, said: “I can’t imagine how it’s going to be. . . . Everybody is from Hughes.”

Job Upheavals at Hughes

At its peak in the mid-1980s, Hughes Aircraft Co. had about 82,000 employees involved in aerospace. Today, the number has dwindled to about 51,000 workers. Here’s a look at which plants remain open after the latest round of closings:

* El Segundo: Employs about 7,800 people to build lasers, night vision equipment and radar sets for fighter aircraft.

* Tucson: More than 7,400 workers at this facility build tactical anti-tank and anti-aircraft missiles.

* Tijuana: Some 200 employees assemble electronic wiring harnesses.

* Santa Barbara: About 1,450 workers build infra-red detector arrays and space sensors.

* Long Beach: About 975 employees provide technical field support for various military hardware such as tactical missiles, communications systems and ground-based radar.

These plants have already closed or will soon:

* Fullerton: Has about 6,800 employees and will phase out most operations by the end of 1995, displacing about 6,000 people. Two small buildings will remain with between 700 and 1,000 employees to develop and build command and control systems and air traffic control systems.

* Canoga Park: Had about 1,900 workers. Announced in June, 1992 that the plant would shut down by Oct. 6, 1994. The facility was the headquarters and engineering center for missile systems group employees, which have since transferred to Tucson.

* San Diego: Had 2,500 employees. Was an Unmanned Strike Systems division which made the Tomahawk and advanced cruise missile.

* Pomona: Had 2,400 workers. Air Defense Systems division which made the Standard missile and Phalanx gun system.

* Rancho Cucamonga: Had 1,500 workers. Air Defense Systems division which made the Stinger and the Rolling Airframe missile.

Note: The San Diego, Pomona and Rancho Cucamonga operations were acquired from General Dynamics in August, 1992, and were transferred to Tucson by the end of 1993.

Sources: Company reports, wire reports

Researched by ADAM S. BAUMAN / Los Angeles Times

Historical highlights of Hughes Ground Systems Group in Fullerton:

1957

* Plant opens: El Segundo-based Hughes Aircraft Co. opens Hughes Ground Systems Group at Fullerton site with 500 workers. Principal projects involve electronic radar production. First system is installed aboard the destroyer Albany.

1968

* NATO contract: Receives $400-million contract to build NATO’s air defense system.

1970

* Investment begins: Capital investment program that lasts through early part of decade begins.

1983

* Revenue source: $1.2 billion in sales by Ground Systems Group accounts for 22% of entire company’s revenue.

1984

* Defense prevails: 14,000 people employed in 2 million square feet. Air defense systems built for 25 countries, including the U.S. and Canada. Revenue sources 100% defense-related.

1985

* Expansion planned: $50-million expansion set for October, with completion expected in 1986. Plans call for construction of two three-story buildings totaling 380,000 square feet. Employment reaches 15,000.

* Investigation ends: Federal grand jury

in Los Angeles finds no evidence that Hughes Aircraft tried to bribe arms merchant Adnan Khashoggi during negotiations to build Saudi Arabian air defense system. Eight-month investigation began when former

Fullerton employee alleged $1-million bank draft exchanged hands to buy Khashoggi’s influence.

* Sale completed: Hughes Aircraft Co. is acquired by General Motors for more than $5 billion.

1987

* Layoffs announced: Hughes announces elimination of 300 jobs at Fullerton site because of lost contracts and overall slowdown of defense spending.

* Bidding war opens: Hughes and IBM vie for multibillion-dollar contract to build new U.S. air traffic control system. If

contract is won, majority of work would be performed in Fullerton.

1988

* Contract lost: After $250 million is invested, Hughes loses air traffic control system project to IBM. Hughes continues to bid for job to upgrade Canada’s ATC system and eventually wins that contract.

* Jobs reduced: Employment drops to 11,800 at year’s end.

1989

* Contract won: $91.5-million contract awarded to revamp Taiwan’s air defense system.

1992

* Sales option studied: Hughes officials begin contacting local developers to judge their interest in purchasing about 140

undeveloped acres at its Fullerton site for residential development.

* Reorganization: Hughes Ground Systems Group renamed Hughes.

* Settlement: Ordered to pay a $3.9-million fine to settle allegations that it defrauded government on several contracts to build shipboard defense systems.

1994

* Consolidation discussed: Hughes officials announce that, to remain competitive, they might close Fullerton facility. City officials meet with company officials to discuss impact. Site employs 6,800.

* Closure announced: Hughes announces that Fullerton facility will be shut down over next 16 months. Most of the land will be sold for development and an estimated 800 to 1,000 positions will be eliminated. Remaining employees will be reassigned.

Source: Times reports; researched by JANICE L. JONES / Los Angeles Times

*

Times staff writers Ross Kerber, Don Lee, Martin Miller, John O’Dell and Debora Vrana and correspondent Sharilyn Bankole contributed to this report.