Hughes eyes $1 billion in sales as China door opens.

The lifting of satellite technology trade sanctions against China has the potential of creating a huge market for Los Angeles County's biggest private employer -- Hughes Aircraft Co.

According to Hughes executives, the Clinton administration's action earlier this month reopens the door for at least $1 billion in new business for the Los Angeles-based company.

Specifically, Hughes executives said there is a market in China for at least 10 and possibly as many as 17 communications satellites.

Hughes is one of the biggest makers of commercial communications satellites in the world. This year, 17 Hughes-made commercial satellites -- a record for the company -- will be launched from various sites around the world.

In addition to the space vehicles, which could be sold to both private and government interests in China, there is Hughes-made ground equipment that would likely be part of satellite packages prepared by Hughes.

For instance, the packages could include ground-based transmission stations or entire communication systems, the officials said. Hughes' satellites are purchased by governments or private businesses for use in transmitting information, television pictures and telephone signals.

"This (the decision) is like life and death. Without the lifting of the sanctions, we were pretty much prevented from selling any of our satellites to the biggest market in the world," said Gareth C.C. Chang, senior vice president of marketing and president of the company's international division. "The removal of this barrier is a significant event for us."

The Clinton administration on Oct. 4 lifted the year-old ban on the sale of satellite technology equipment to China. The ban was imposed by President Clinton as part of an administration effort to curtail sales of Chinese-made M-9 and M-11 missiles to Middle East countries.

As part of a new agreement between the United States and China over missile sales, the ban was lifted.

But during the 12 months of the sanctions that prohibited U.S. companies from selling commercial satellites, Hughes officials said they were knocked out of the competition for a contract to build three communications satellites. A German company formed an alliance with a Chinese business to make them, said Hughes officials.

"There's still a big market there but it was difficult losing that contract because it was the first one and establishes a connection," said Chang.

Before the ban went into effect, Hughes was actively pursuing contracts in China to build between 10 and 20 communications satellites. The initial Chinese contract with the Germans is to build one satellite with options for two more.

Hughes, which makes satellites in El Segundo and at the end of 1993 had 25,000 employees in Los Angeles County, had been making inroads into China to sell its high tech equipment when the ban was imposed, said Chang.

According to a company spokesman, Hughes had completed contracts to build a wireless digital telephone system in the town of Chengdu. In addition, it had signed an agreement with a bank in China to set up a computer communications system.

Another planned project is a deal between Hughes, which is owned by General Motors Corp., and the Chinese government to develop an electric automobile.

Chang, who was born in China and was previously an executive with Douglas Aircraft Co. with responsibility for its commercial business there, said Hughes considers the country one of its biggest potential customers.

A company spokesman noted Hughes campaigned hard to get the ban lifted and its chairman, C. Michael Armstrong, has gone to China to negotiate potential deals.

"Over the next decade China and the entire region represents what could be one of our biggest customers," said Chang.

Even though Hughes is now one step behind the German company in competing to build the commercial satellites, Chang said the company is pulling out all stops to win future business.

In terms of how a China contract would affect local employment, Chang and company spokesmen said it would depend on details of any contracts.

"Some of these kinds of contracts are spread out over a great deal of time. In those cases, it would be a matter of just holding onto our current employees. If the deliveries were short-term, it might produce more jobs," said company spokesman Richard Dore.

Even though it is still the county's largest private employer, Hughes has had major job cuts in recent years, due mainly to declining Pentagon spending. In the mid-1980s, Hughes had total worldwide employment of 82,000. The number currently stands at about 51,000, excluding the latest cuts announced last month of 4,400 jobs in Southern California.