Advertisement
YOU ARE HERE: LAT HomeCollections

COLUMN ONE : Flying Through Turbulence : Bold and savvy, C. Michael Armstrong is steering Hughes Aircraft through a stormy economy. With his triumphs have come a few big bumps--especially for workers.

August 25, 1994|JAMES F. PELTZ | TIMES STAFF WRITER

On a summer Saturday in 1993, a fiftysomething white guy wearing jeans and cowboy boots joined a street party in South-Central Los Angeles to celebrate the reopening of a small grocery store destroyed by the riots.

Donning a Harley-Davidson baseball cap, he strolled through the neighborhood, mingling with a crowd that included rapper Snoop Doggy Dogg and members of the Crips and Bloods. That he was a big shot at Hughes Aircraft Co.--California's largest industrial employer--was "the last thing you would have thought," said community organizer Danny Bakewell.

In fact, he was the top Hughes big shot--C. Michael Armstrong, chief executive of the concern founded by pioneer aviator Howard Hughes. He was there without his usual corporate entourage to learn firsthand what was happening in the riots' aftermath.

"I had a personal interest in supporting the community," he said later in an interview, sounding puzzled that his visit required an explanation. His involvement "is not done for visibility," he said. "It's done for citizenship."

Bakewell had invited Armstrong on a lark--and was stunned when he showed up. But, in fact, Armstrong's trip to South-Central was emblematic of a man who has splintered the mold for how Southern California's aerospace executive elite behaves.

Whether it's exploring social problems on his own time or twisting lawmakers' arms to aid Hughes' business, Armstrong is among those rare corporate birds who seize opportunities to stand out and speak up.

A familiar figure among the opaque fraternity of defense chiefs, he is generally unknown beyond his own business boundaries. Yet his clout is immense and his decisions have an enormous impact on California's economy--an impact frequently unkind to workers in the cause of ensuring Hughes' future.

Engaging, politically savvy and an expert at selling his point of view, Armstrong is both tireless and shameless in his efforts to influence public policy for favorite causes, including the role of small business in the inner city and improving the state's business climate.

He has clearly made his most indelible mark at Hughes, arguably the most successful and experimental of the nation's defense firms in adapting to a true peacetime economy.

But as Southern California in particular has learned, Armstrong's 2 1/2-year stewardship at Hughes has helped cause immense hardship on the factory floor. To keep the company in the black, he has cut 13,000 jobs in the last two years, helping create huge craters in the local economy. He has even admitted resorting to duplicity with the public to emphasize political reforms he embraces.

As a result, Armstrong's efforts to help create employment in South-Central Los Angeles or his finding fault with state government red tape ring hollow next to the damage that his actions have caused, his critics say.

"Hughes has done more negative to Southern California, simply in the transfer of jobs out (of state), that dwarf whatever crumbs they've thrown to South-Central," said Joel Kotkin, a fellow at Pepperdine University's business school. "His credibility is not that great."

Armstrong makes no apologies, saying his actions are necessary for Hughes to survive. He's certainly not alone. More than 300,000 aerospace and defense jobs in California have vanished since the mid-1980s.

Indeed, as Hughes Aircraft goes, so goes the California economy in many ways. Each has endured wrenching job losses, and each is betting on an expansive future in which defense work plays a shrinking role.

Hughes is redefining itself as part of the most abrupt transformation in its 50-year history. Like the state, it now has to hustle hard to drum up business--something it did not used to do.

What Armstrong will acknowledge, though, is that his actions can leave thousands of his remaining workers unsettled. "I don't think I underestimate the anxiety that this pace of change produces," he said. "Change and competition are really great theories, until they start happening to you."

Nonetheless, Armstrong--a six-foot southpaw with a ruddy complexion and blue eyes--so far has steered Hughes impressively through the changes. Despite shrinking Pentagon budgets, Hughes earns a handsome profit.

One-third of its $8.8 billion in sales last year had nothing to do with military equipment and hardware, but rather stemmed from the sale of commercial satellites and electronic components tied to information technology and telecommunications.

But Armstrong is not done cutting jobs to get Hughes' costs down further. Despite having shed 32,000 jobs since the mid-1980s, Hughes, a division of General Motors Corp., said in June that it expects to drop about 3,400 jobs in Fullerton, El Segundo and Tucson, Ariz.

Advertisement
Los Angeles Times Articles
|
|
|