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Defense layoffs
Northrop Grumman Corp. announced last week that it will shutter its plant in Hawthorne, along with three other defense-oriented facilities around the country, cutting 755 jobs 530 of them in Hawthorne.
Workers at the Hawthorne site make assorted defense electronics products, such as antitank weapons and aircraft guidance systems. Those tasks will be shifted to other Northrop facilities in Illinois and Pennsylvania.
Also last week, Northrop Grumman lost a bid to acquire the aerospace and defense divisions of Hughes Electronics Corp. Hughes agreed to sell the units to Raytheon Co. for $9.5 billion in common stock and debt, subject to government and shareholder approval. Layoffs among Hughes’ approximately 10,000 L.A. County workers are expected, but it is not clear exactly how many layoffs loom.
Another Northrop plant in Pico Rivera is also targeted for closure. That 5,000-employee facility produces the B-2 Stealth bomber, and its contract expires in 1999.
Dirty dealings alleged
Officials with the parent company of Torrance-based Western Waste Industries admitted for the first time last week that Western Waste is the target of an FBI investigation.
The probe has been widely known ever since the high-profile corruption trial of former Compton City Councilwoman Patricia Moore. But despite a reported confession by Moore that she received monthly bribes from Western Waste officials, the company has declined to reveal whether it is being investigated and the FBI does not provide information about ongoing probes.
Last week, Western Waste owner USA Waste Services of Houston revealed in a document filed with the Securities and Exchange Commission that the FBI has served subpoenas seeking documents kept by company Chairman Kosti Shirvanian, as well as other Western Waste executives.
The FBI is trying to determine whether Western Waste bribed public officials to obtain municipal trash-hauling contracts.
Moore, who was convicted on charges of income tax fraud and extortion, allegedly told federal investigators that she was paid up to $1,000 a month by Western Waste executive George Osepian while she was serving on the City Council. Western Waste has contracts with dozens of municipalities in L.A. and surrounding counties.
Checchi mates
Northwest Airlines co-chairman and multimillionaire Alfred Checchi of Beverly Hills has appointed an advisory team of political strategists, presumably to help with his expected bid for governor of California.
Checchi is believed to be considering a run on the Democratic ticket. He is scheduled to make a speech before the Town Hall Los Angeles on Feb. 4, at which time he may officially announce his candidacy.
Checchi’s strategic team includes Mark Penn, who was pollster for President Clinton during his recent re-election campaign. Consultant Darry Sragow, media advisor Bob Shrum and P.R. strategist Julie Buckner will also take part, according to media reports.
If Checchi does throw his hat in the ring, he will face stiff competition from Lt. Gov. Gray Davis. Former White House Chief of Staff Leon Panetta and U.S. Sen. Dianne Feinstein might also run on the Democratic ticket.
America offline
Five America Online customers flamed their service provider last week by suing it in L.A. County Superior Court.
The plaintiffs, four from L.A. County and one from San Diego County, claim AOL’s new unlimited-usage plan is so popular it has overwhelmed the company’s network of servers, making it nearly impossible to sign on during peak hours.
Starting in December, AOL began offering unlimited use of its services for a fee of $19.95 a month. As a result of overwhelming response to the offer, many customers have received busy signals when trying to sign on to the network.
Attorneys for the plaintiffs are trying to get the suit certified as a class action lawsuit representing all 7 million AOL subscribers. The suit alleges AOL knowingly failed to meet the increased demand created by the new service.
“We expect to prevail in the class action suit,” stated a terse release by Dulles, Va.-based AOL last week.
Civic suits
The legal saga that has besmirched the reputation of Torrance-based American Honda Motor Co. for the past three years continues, with suits filed in early January by the company against 39 former executives and dealers.
The scandal at Honda emerged in 1994 after federal investigators turned up evidence of a bribery scheme in which dealers were paying kickbacks to Honda executives in exchange for cars. Because of hot sales in the 1980s, Honda could not import cars quickly enough to meet demand, leading to a fierce competition among dealers to stock their lots.
The probe showed that more than $15 million in under-the-table payments had been collected by Honda executives from dealers.
Eighteen former Honda executives, along with two former dealers and two former suppliers, were handed felony convictions on corruption charges after a trial in 1995.
Subsequently, more than 30 dealers filed suit against American Honda in Baltimore federal court, claiming that upper-level executives knew about and condoned the bribery scheme.
The recent lawsuits are seen as Honda’s attempt to fire back by placing the blame entirely on the dealers and executives involved, thus distancing the company from the scandal. They were filed in Baltimore as part of the ongoing litigation there.
Compiled by Dan Turner
