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Hd After Arco,

Who’s Left?

Last week’s takeover of Atlantic Richfield Co., better known as Arco, should not have come as much of a surprise. It was just a matter of time before the Los Angeles-based oil company, which has been cutting back operations and jobs in the face of weak financial results, would be snapped up. BP Amoco, the acquiring company, long had been interested in Arco’s Alaskan fields, not to mention the lucrative California gasoline market.

Even so, the $27 billion acquisition feels like a cold slap. It means the loss of another corporate presence in L.A., and with it, several thousand jobs. (It’s an especially big blow for L.A.’s skyline; Arco’s loss leaves Times Mirror as the largest publicly held company downtown. After that comes little-known Dames & Moore Group.)

While Los Angeles never has been much of a Fortune 500 town, it had come to rely on the likes of Arco, Home Savings, Great Western and Lockheed for everything from summer concerts to programs for inner-city youth. Arco was front and center in organizing the Save the Books program after the Central Library fire in the mid-’80s.

It’s doubtful whether BP’s chief executive, John Browne, even knows there is a Central Library in Los Angeles, much less the fact that it was rebuilt thanks in large measure to Arco support. If the Arco deal is handled the same way as BP’s purchase of Chicago-based Amoco last year, L.A. can say good-bye to an important civic and charitable giver.

When merger and acquisition activity hit many L.A.-area corporations in the early ’90s, it was generally considered coincidental that almost all the acquirers were out-of-towners. As it turns out, however, several themes run through these takeovers.

Most of the L.A. companies taken over were mid-sized or regional entities within their industries substantial, mega-billion-dollar operations, to be sure, but not in the league of a multinational. This has been especially noticeable in banking; as big as a First Interstate or a Great Western might have been in the California market, they didn’t have the global might of a Citibank or a Bank of America. In banking these days, only the big guys and the little guys seem to survive those in the middle must either get bigger or be swallowed up.

Back in the ’80s, it looked as if several major L.A. companies might have been in a position to be predators; certainly First Interstate was on the prowl, as was Lockheed. But it never came to pass perhaps the result of poor judgment, weak results, stubborn takeover targets or a combination of all three.

So it’s 1999, and Los Angeles has no major banking company based here (nor does San Francisco, for that matter, since BofA has relocated its headquarters to Charlotte, N.C.). In aerospace, just Northrop Grumman is left and only after its merger with Lockheed Martin was turned back because of antitrust concerns among federal regulators. In oil, Arco’s disappearance leaves Unocal and Occidental neither with a strong civic presence in Southern California.

Who’s left? Well there’s Disney and Fox and Universal, and the television networks as well. But despite some exceptions, all too few members of the entertainment community acknowledge that Hollywood is, in fact, a part of Los Angeles. Now would be a good time for them to get to know the place.