Cutbacks are coming again to Aerojet, the rocket-engine maker that once employed more than 20,000 Sacramentans while helping America put a man on the moon.
Now known as Aerojet Rocketdyne, the company said Monday it will lay off 10 percent of its workforce over the next four years, eliminating 500 jobs nationwide as it kicks off an efficiency and cost-cutting drive. The announcement follows a year in which the company lost $53 million.
Aerojet’s Rancho Cordova headquarters will absorb the brunt of the cost cutting. Spokesman Glenn Mahone said layoffs are expected to hit 250, taking out some 16 percent of the existing 1,600 jobs. About 40 percent of the manufacturing and office space will be eliminated at the headquarters as well.
He said some manufacturing will be moved out of Rancho Cordova to save money. The company considers Rancho Cordova one of its high-cost locations, out of 14 spread out from Redmond, Wash., to West Palm Beach, Fla.
Never miss a local story.
“If it can be done somewhere else, and it be done for less, that’s what you look at,” he said.
For instance, the company’s “energetics” business, which includes products used to store energy, will likely be consolidated at Orange, Va., and Camden, Ark.
Mahone said he doesn’t know how many of the affected jobs will be unionized positions.
Union officials reacted to the news with concern. David Brewer, business agent at Local Lodge 946 of the International Association of Machinists, said he doesn’t think the cost cutting “should come off the backs of the workforce.”
“I think it would be better if they could find a way to keep the work here in California,” he added. The local represents about 400 workers in Rancho Cordova; they earn $21 to $42 an hour plus medical benefits.
Mahone stressed that the cutbacks will be phased in.
“It’s not tomorrow, not next week, but over a four-year period,” he said.
Scott Seymour, president and chief executive at Aerojet and its parent GenCorp Inc., said in a prepared statement: “This is a very difficult decision and I recognize the impact on our dedicated colleagues that will be affected.”
Mahone said the decision to reduce work space in Rancho Cordova is simply a matter of consolidation. “We’ve got a lot of area that’s not being used,” he said. About 1 million square feet of space will be eliminated.
The announcement comes three weeks after Aerojet President Warren Boley resigned, reportedly over differences with Seymour about the company’s direction.
The company’s last round of layoffs took place in early 2014, after it completed its $550 million takeover of Rocketdyne. The merger eliminated 61 jobs in Rancho Cordova and 160 jobs at Rocketdyne’s offices in Canoga Park, northwest of Los Angeles.
Aerojet said the new cost cutting is a multiyear program aimed at “increasing operational efficiency” among the company’s 14 sites. “Aerojet Rocketdyne has made a commitment to our customers and to the government to improve the affordability of our products – products vital to our nation’s defense and continued access to space,” Seymour said.
The goal is to cut costs by $145 million a year by 2019. The company lost $53 million last year on revenue of $1.59 billion. That compared with a profit of $168 million on sales of $1.38 billion in 2013.
Aerojet also suffered some embarrassment in October, after an unmanned Antares rocket bound for the International Space Station exploded shortly after launching from Virginia. The rocket’s engines had been manufactured decades earlier in Russia and were refurbished by Aerojet.
Back in the 1960s, Aerojet was one of the workhorses of the greater Sacramento economy. The Rancho Cordova complex worked around the clock to supply engines for NASA and America’s Cold War defense. Its on-site facilities included a swimming pool, a summer camp and a general store that sold golf clubs and appliances. Neil Armstrong, Frank Borman and other astronauts occasionally dropped by to give pep talks to the workers.
Employment dropped off precipitously after the moon landings ended, and Aerojet has been struggling off and on for the past 40 years.
For a while, parent company GenCorp diversified into auto parts and other businesses, and nearly made a deal 15 years ago that would have relocated almost all of Aerojet’s rocket engine business to San Jose and West Palm Beach, Fla.
More recently, the company has sought to cash in on thousands of acres of idle land, ripe for development, surrounding its Rancho Cordova complex. Just last week, the company announced it was selling 703 acres south of Highway 50 to an El Dorado Hills development firm.
Aerojet also announced Monday it is retiring the GenCorp name. The company’s new corporate name will be Aerojet Rocketdyne Holdings Inc. It will trade under a new ticker symbol, AJRD, on the New York Stock Exchange in late April.
The GenCorp name dates to the early 1970s, when the company was acquired by the old General Tire & Rubber Co. of Ohio.
GenCorp shares closed at $20.21, up 26 cents. The cutbacks were announced after the market closed.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.