Aerojet Rocketdyne’s decision to relocate its corporate headquarters to the Southern California city of El Segundo makes perfect sense for Aerojet. Los Angeles County’s south bay region is an aerospace hub. The U.S. Air Force, with which Aerojet does extensive business, operates its Space and Missile Systems Center in El Segundo.
But for the Sacramento region, the decision stings. Founded in 1942 in Pasadena, Aerojet has been based in the Sacramento region since the early 1950s. And the region has been better for it.
Some people may downplay the significance of corporate headquarters. Aerojet says no more than 25 jobs will be transferred. But enlightened corporate leaders contribute to a region’s economic and cultural vitality.
Aerojet’s decision gets at a nagging issue confronting the Sacramento region: the inability to attract and retain corporate headquarters. Sunny skies and beautiful rivers don’t factor heavily into executives’ decisions about where to locate, as became evident in 2011 when Waste Connections announced its move to Texas.
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State government jobs are important, but this region needs economic diversification, as both of Sacramento’s mayoral candidates, Darrell Steinberg and Angelique Ashby, know.
Barry Broome, chief executive officer of the Greater Sacramento Area Economic Council, told a Sacramento Bee editorial board member on Monday that Aerojet’s departure for Southern California was “not unpredictable.” The company has roughly $2 billion in contracts with Southern California-based customers. Its new corporate offices will be minutes from Los Angeles International Airport, making it for easier for its executives to travel anywhere in the world to carry out business. Sacramento’s airport cannot offer similar connections. And Aerojet’s factory in Rancho Cordova will remain open, employing about 1,000 people, as detailed by The Bee’s Mark Glover.
But the move still invites soul-searching, here and statewide. Is this region really doing all it can to nurture that factory and others, and attract new ones? Do state laws help or hurt that mission?
California’s regulatory scheme is sorely in need of an update. The California Environmental Quality Act seems to stymie as many good projects as bad ones. And Broom thinks the state should have “an honest conversation about all these labor laws we pass.” A $15 an hour minimum wage should not be mistaken for real economic development.
We are grateful that Aerojet will remain in California. But when a corporate headquarters leaves a region that needs a private sector as much as this one, it’s bad news, even if it’s good for Aerojet.