Armor All’s Base in O.C. to Be Closed

ALISO VIEJO —  The corporate headquarters of Armor All Products Inc. will be closed this spring and most of the headquarters staff laid off as its new owner, Clorox Co., ends the car care company’s 25-year history in Orange County.

Employees of the company, founded in Irvine in 1972, were told Monday morning that as many as 80 of them will be laid off beginning March 31 when Clorox begins moving the company’s operations to its Oakland headquarters. A total of 106 employees work at Armor All’s headquarters in Aliso Viejo.

Armor All’s new president, longtime Clorox executive Lawrence S. Peiros, delivered the news in a staff meeting early Monday and employee relations specialists immediately began meeting with individual workers to explain the layoff program and severance packages.

Several employees, interviewed as they left the white concrete and smoked-glass building that Armor All built in 1989, said they were saddened by the news. The workers--some grim faced and others wisecracking about being terminated--declined to offer specifics about what they’d been told.

The decision to shutter the headquarters wasn’t unexpected. Although still profitable, Armor All’s earnings were hurt by packaging-related product recalls and highly publicized claims that its Armor All Protectant can damage vinyl dashboards and car tops that get heavy exposure to sunlight. The claims have never been proved.

The company’s profit plunged 71% in the last fiscal year to $7.1 million from $24.5 million the year before. Earnings rebounded to $7.6 million in the fiscal six months ended Sept. 30, but still were far off the pace set in 1995 and earlier. Sales for the first six months were up 3% to $92.7 million from $89.9 million in the same period a year earlier.

Clorox, which paid $408 million for Armor All this month, said at the time of the sale that it intended to boost Armor All’s profits. That process often involves substantial layoffs in companies, like Armor All, that are labor intensive.

Armor All doesn’t make its own products, relying instead on five contract manufacturers, including one in Garden Grove. Most of the company’s employees are in sales, marketing and administration.

By assigning most of the Armor All responsibilities to existing Clorox workers in Oakland, Clorox figures to cut Armor All operating expenses considerably.

Clorox plans to sell the 42,234-square-foot Armor All building, which occupies a 4.9-acre parcel atop a hill in a slowly developing Aliso Viejo industrial park.

The company will be a subsidiary of Clorox, and the Armor All product name will survive.

Immediately after the sale to Clorox closed Jan. 2, Armor All’s top officers departed, including Chief Executive Kenneth Evans and Chief Financial Officer Mike McCafferty.

Clorox spokesman Fred Reicker said Monday that other workers were being told individually whether they are being laid off, have a “slight chance” of landing a job with Clorox or are being offered a position with Clorox if they want to take it.

Employees being laid off will receive severance, extensions of their health-care coverage as required by federal law, and assistance in preparing resumes and applying for new jobs. The severance packages include two weeks’ pay for each year of service, with a minimum of four weeks’ pay.

Reicker said seven employees were told Monday that their jobs will end Friday. They will receive an additional 60 days’ pay in lieu of advance notice, as required by federal law.

About 20 of Armor All’s 106 headquarters and regional sales employees will be retained by Clorox, Reicker said. Clorox also intends to keep 30 other employees in its home products division in South Carolina and in its international offices.

Clorox plans to increase sales by placing Armor All’s auto waxes, polishes and its market-leading Armor All Protectant on tens of thousands of supermarket shelves along with other Clorox brands such as Clorox bleach, Combat insecticides and S.O.S. scouring pads. The acquisition also gives Clorox entre to the thousands of hardware and automotive stores that now handle Armor All.

Armor All went on the block late last year when its major shareholder, San Francisco health-care services company McKesson Corp., decided to sell its 55% stake in the company all at once.

McKesson, which bought Armor All from founder Alan Rypinski in 1979 for $49 million, had been slowly divesting itself of the car care company’s stock. McKesson initially got rid of 17% of its stake in Armor All in a 1986 public offering.

When McKesson offered up its remaining shares, Clorox offered to pay almost $2 more than the stock was selling for.

Analysts said at the time that to make the purchase pencil out, Clorox would have to trim Armor All’s operating costs considerably.

“It’s a shame this is happening, but this is an extremely competitive market,” said Sherry Arnett, marketing administrator for Boyds Wheels, one of three other auto care products companies headquartered in Orange County.

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Fading Armor

* 1972: Armor All founded in Irvine by marketing specialist Alan Rypinski, who acquired an inventor’s formula for a spray product to clean and protect vinyl from solar damage.

* 1979: McKesson Corp., San Francisco health-care services company, acquires Armor All for $49 million.

* 1986: McKesson cuts stake in Armor All to 83% with initial public stock offering and subsequently reduces stake to 55% in following years. Company launches its second product, a car cleaning spray.

* 1988: Armor All buys car wax and polish line from Borden Inc. for $26 million.

* 1990: Company moves from Irvine to new $6.6-million headquarters in Aliso Viejo.

* 1995: Spray cans for some Armor All products discovered to be defective; recall costs company $9 million.

* 1996: Clorox Co. agrees to buy Armor All for $408 million.

* Jan. 3: President Kenneth Evans and other top officers resign as sale is completed.

* Jan. 27: Clorox announces plans to close Armor All headquarters in Aliso Viejo.

Source: Times reports