The Sacramento area is about to lose another corporate headquarters – this one entwined with the region’s history and identity.
Aerojet Rocketdyne Holdings Inc., the Rancho Cordova-based rocket engine maker and the largest publicly traded company in the Sacramento area, said Monday that it will move its headquarters to the Los Angeles County city of El Segundo this summer.
Company spokesman Glenn Mahone said only a handful of company officials will be involved in the move, with local operations remaining intact in the Sacramento area.
“It will be a small number who will indeed be moving to that location in El Segundo … far less than 50. Way less than that,” Mahone said.
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Those making the move include Eileen Drake, Aerojet’s president and CEO, and Chief Operating Officer Mark Tucker.
Mahone said the company’s El Segundo offices will formally open in late June or early July. He also noted that employees were informed of the pending move in March.
Mahone characterized the corporate move as “another step forward in our transformation” that included the April 2015 change of GenCorp’s corporate name to Aerojet Rocketdyne Holdings Inc.
Mahone said the main reason for the move is to position the company’s headquarters among “the largest concentration of aerospace companies in California …that’s where the majority of our customers are.”
Asked if the corporate headquarters move was a precursor to moving the company’s Rancho Cordova operations – Aerojet employs more than 1,000 locally – to Southern California, Mahone said, “No, not at all.”
He added: “The facility at Rancho Cordova is a plant, an operating plant. We have engineers there. We build there.”
While the upcoming move to a new corporate headquarters includes a relatively small number of executives, it adds to a list of corporate headquarters departures from the Sacramento area.
That list includes Waste Connections, the multibillion-dollar trash-hauling company that was once headquartered in Folsom. It was the largest publicly traded firm in the Sacramento area in August 2011 when chairman and CEO Ron Mittelstaedt said California was “the worst state in the country to do business in.”
Before 2011 ended, Waste Connections announced that it was moving to Texas. Today, it operates out of The Woodlands, in the greater Houston metropolitan area.
In October 2013, Revionics Inc., the Roseville-based maker of pricing software for the retail industry, announced it was moving its headquarters to Austin, Texas. In June that same year, Roseville’s Daegis Inc., an electronic discovery and information-management firm, announced it was relocating its headquarters to Dallas.
Unlike some of the other companies that have moved, Aerojet has a history in Sacramento that stretches back to the middle of the last century. Back in the 1960s, the company employed more than 20,000 people in Rancho Cordova and was a workhorse of the local economy. It worked around the clock to supply engines for NASA and America’s Cold War defense. A general store sold golf clubs and appliances, and the amenities included a swimming pool and a summer camp. Astronauts such as Frank Borman and Neil Armstrong stopped by to give pep talks to workers.
Employment has fallen precipitously since then. The latest round of layoffs, announced in March 2015, was aimed at trimming 10 percent of the company’s jobs nationwide over four years. At that point, the Rancho Cordova plant employed 1,600 people.
Christopher Thornberg – founding partner of Beacon Economics, a consulting firm with offices in the Bay Area and Los Angeles – characterized the Aerojet move and the loss of a relatively few executive positions as inconsequential.
“Corporate headquarters have this mystique that I don’t fully understand,” he said. “Ultimately, the question is one of employment. The question is: Does it really mean anything to California? And the answer seems to be, ‘No’ Our economy is still moving forward despite that.”
Barry Broome, CEO of the Greater Sacramento Area Economic Council, said he was disappointed by the news but said it wasn’t surprising, given the company’s growth in Southern California.
“They’ve won more than $2 billion in contracts there and they have the services of L.A. International (airport nearby), and that’s a competitive advantage,” he said.
Broome said his group has been working with Aerojet for nine to 10 months on a project that affects this area but he couldn’t discuss it, saying he was under a non-disclosure agreement. But he said he was still “cautiously optimistic” that Aerojet will keep a significant operation here and even expand its local manufacturing operations.
He said his main takeaway from the news was that this area needs to work harder to invest in new industries.
“We have spent too long (counting on) what were considered reliable industries,” Broome said. “We need to look forward to a new economy and take advantage of our assets. The real lesson to me is … as a community we have to dig in and fight for jobs the way Texas fights for jobs, the way Salt Lake City fights for jobs.”
Last week, Aerojet Rocketdyne said it earned $5.1 million, or 8 cents a share, in this year’s first quarter. That compared with a loss of $3.3 million, or 6 cents a share, a year earlier. Revenue increased to $356.9 million from $323 million a year ago.
The company formerly known as GenCorp Inc. has made numerous changes following the $550 million acquisition of the Pratt & Whitney Rocketdyne business from United Technologies Corp. in mid-2013.
Companywide, Aerojet Rocketdyne employs about 5,000 people.