Hughes Defends Top Officials’ Lavish Retreat : Expenditures: Ground Systems Group is criticized for Ritz-Carlton session as lower-level employees are laid off. The firm calls conferences beneficial.

FULLERTON — Hughes Aircraft Co. officials on Wednesday defended a decision by the company’s division here to hold a retreat for top executives and their spouses at a lavish resort as the defense contractor was laying off lower-level employees.

Hughes officials said the retreats are useful for focusing managers’ attention on issues such as the company’s diversification into commercial markets and that other Hughes groups plan retreats this year.

Days before it announced a round of unspecified layoffs, a group of top Hughes Ground Systems Group executives, led by group President W. Scott Walker, held a three-day retreat at the Ritz-Carlton resort in Rancho Mirage.

Fifty senior executives and their spouses booked rooms at the Ritz-Carlton for March 14 to 16 at a corporate discount rate, said John Toner, the hotel’s general manager. The meeting was booked at least six months in advance, he said.

The meeting, coming at a time of job cuts for lower-level employees, angered workers who are losing their jobs and took a toll on morale among the 8,700 remaining employees in Fullerton.

“It’s bad ethics to me,” said Edward Turner, 32, a test engineer who lost his job of nearly 12 years March 18. “They’re laying off people and staying in some hotel suite. They could have held that retreat at work, and people are upset about that.”

Walker declined to comment.

Officials at Hughes Aircraft, parent of the Fullerton division, issued a statement saying the company believes “participation in management conferences away from company facilities is both beneficial and necessary for the continued financial health of the company. The need for a company to reduce the size of its work force is a direct result of the business environment and is not related to the use of such conferences as a business tool. The purpose of such conferences is to position the company for increased business in the future.”

Even so, the timing of the layoffs and the retreat showed a lack of sensitivity by management, said John Stupar, a 10-year employee of Hughes who lost his management job in February.

As part of major work force reductions throughout Hughes, the Fullerton group began laying off hundreds of employees earlier this year. Dan Reeder, spokesman for Ground Systems, said it had 8,698 employees as of March 27, down 233 from 8,931 on Dec. 20.

Job cuts are continuing, but Hughes officials declined to say how many positions will be lost this year in Fullerton. Of 3,000 planned job cuts at Hughes this year, Ground Systems will lose at least 400 positions, said Richard Dore, a company spokesman.

The Ritz-Carlton, a resort in the foothills of the Santa Rosa Mountains, charges a minimum of $275 a night for its rooms, but Toner said Hughes negotiated a significantly lower corporate rate.

The Hughes statement said off-site business conferences are common throughout the defense industry, and Hughes officials said that retreats are generally held every two years and involve less than 100 people.

Hughes officials said a survey of six Hughes groups in Southern California showed that two are planning to hold management retreats this year, three have no plans to do so and the plans of one group could not be determined.

George Torres, a spokesman for Rockwell International Corp. in Anaheim, said executives at Rockwell do not hold large off-site retreats.

“From a business and cost-control sense, we do not have large-scale, off-site meetings, and we encourage meetings to be held on Rockwell property,” Torres said.

Richard A. Foster, president of Interstate Electronics in Anaheim, said his company used to hold management retreats of 10 to 18 people as a way to help managers focus on strategic tasks.

“We cut them out after 1989 for cost reasons,” he said. “They can be expensive.”