Growing woes in Golden State // Cuts could cost state billions

Haya El Nasser;Jonathan T. Lovitt

03/09/1993

USA Today

FINAL

Page 03A

LONG BEACH, Calif. _ The light chatter usually heard in the cafeteria of the

Long Beach Naval Shipyard took on a somber tone Monday morning.

"The talk among the guys is mostly about moving out of state," says Darryl

Kegler, who is among perhaps 100,000 Californians who would lose their jobs if

nine military installations in the recession-battered state fall victim to the latest

round of base closings.

"It saddens me. I'll have to move the whole family," says Kegler, the father of

two.

The staggering military cuts, which could shut as many as 30 bases and shrink up

to 150 in 10 states, is the latest disastrous economic news to hit the Golden State,

where unemployment hit 9.8% in February.

California is in its worst slump since the Depression: 830,000 jobs lost since

mid-1990 _ up to 100,000 military jobs.

"No matter how you cut it . . . this comes at the wrong time," says Joseph

Wahed, economist at Wells Fargo Bank. "Here we are, just on the verge of

becoming optimistic again for 1994, and they throw this on us."

"They're really after California," says security specialist Rick Cassell at the

53-year-old Long Beach shipyard. His wife has just been laid off as a department

store cashier.

The Long Beach base employs about 4,100 workers, but its closing could affect

up to 11,700 jobs in the region. Unemployment in Los Angeles County, where

Long Beach is, reached 10.4% in January.

"Los Angeles County has been ground zero for the California recession," says

Adrian Sanchez, regional economist for First Interstate Bank. "Two-thirds of job

losses occurred in that county alone."

Estimated effect on the county, according to Sanchez: $500 million to $1 billion.

Other areas are being hit.

Closing the Alameda Naval Air Station near Oakland would cost that county

45,000 jobs and $1.5 billion, says Paul Nahm, a manufacturer at the Alameda

base for 16 years.

Gov. Pete Wilson says proposed closings would cost California up to $3 billion

in lost annual payroll and $1.4 billion in military contracts.

"Why would businesses come to California when they see this kind of economic

pounding?" asks Long Beach Councilman Ray Grabinski. "It's crazy."

At Mac's Pizza, just outside the Alameda base, workers are resigned to

uncertainty.

"We're just hanging in there with our fingers crossed. Soon, we may just be

hanging," says manager Millie Aure. "It's terrible. It's really hard. How do they

expect us to live?"

Economists say the base closings eventually could spur the private sector by

opening up prime real estate.

The El Toro Marine Air Station in Orange County is on land valued at $1 billion.

The Alameda base is on an island in San Francisco Bay. But most bases would

have to be cleared of toxic waste.

"It could be used for civilian purposes very nicely but the short-run effect is very

unpleasant," says Wahed, who hopes closings will take years.

Officials promise a fierce fight on Capitol Hill, and many residents are reminding

President Clinton _ who could reject closing recommendations _ that California

was behind him during the election.

"What is Clinton doing? He's supposed to be helping everybody," says Charlotte

Billings, who has worked 15 years at the Long Beach shipyard. So has her

husband and uncle. "He's going to put us on welfare."

Base closings another blow to California

The potential closing of nine military bases will put further stress the hard-hit

California economy. The number of people unemployed in California topped 1.5

million in February, when the jobless rate was 9.8%. Aerospace and military

cutbacks triggered much of the joblessness. Bases on the chopping block

Alameda Naval Air Station March Air Force Base Mare Island Naval Shipyard

McClellan Air Force Base Oak Knoll Naval Medical Center Treasure Island

Naval Station Presidio of Monterey El Toro Marine Air Station Long Beach

Naval Shipyard

Average Year unemployed 1982 1,210,000 1983 1,187,000 1984 980,000 1985

934,000 1986 980,000 1987 791,000 1988 748,000 1989 737,000 1990 823,000

1991 1,119,000 1992 1,382,000 1993 1,506,000 _ 1 1 _ Feb. 1993

Aerospace industry employment 1988 372,300 1989 360,000 1990 346,700 1991

316,700 1992 254,100 _ 2 2 _ Dec. 1992 figure

Fewer defense-related jobs

Feb. '92 Feb. '93 Aircraft/parts industry 139,900 115,800 Dept. of Defense jobs

123,700 118,200 Guided missiles/space vehicles 62,700 50,900

Contributing: Maria Goodavage

GRAPHIC,b/w,Stephen Conley, USA TODAY ,Source:California Employment

Development Department,US Department of Labor(Line graphs,Bar

graphs,Map,California); PHOTO,b/w,Bob Riha Jr.,Gamma-Liaison