35 laid off at Tesoro
in cost-cutting effort

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By Dave Segal
dsegal@starbulletin.com

Tesoro Hawaii, which operates the state's largest refinery, yesterday began laying off 5 percent of its 700-member work force in a cost-cutting move as part of a companywide attempt to return to profitability.

The San Antonio-based parent company, which lost $75 million in the first half of 2002, has been seeking to sell off assets in a bid to reduce its debt by $500 million by the end of 2003.

Ten of the 35 affected Hawaii employees were terminated immediately while the remaining 25 will be leaving in intervals through January, Tesoro Hawaii spokesman Nathan Hokama said. About a third of those 25 employees will be offered the opportunity to relocate to administrative headquarters in San Antonio and possibly to another position in Hawaii, Hokama added.

Hokama said those laid off were in Honolulu and mostly came in the areas of accounting, information technology and retail management. The company has 35 namesake retail gas stations in the state.

No employees were affected at the company's refinery at Campbell Industrial Park in Kapolei, he said.

"The refining and marketing industry as a whole are not doing well," Hokama said. "The market conditions are not favorable and Tesoro and Tesoro Hawaii are losing money. The situation is particularly exacerbated because we're trying to reduce our corporate debt."

The parent company, which announced 125 layoffs overall, is in the process of selling some pipelines near its Mandan, N.D., refinery. It also is seeking to sell its marine services operations in the Gulf Coast and 70 retail gas stations in Northern California that came as part of the package when it bought the Golden Eagle refinery earlier this year in Martinez, Calif.