Northrop Grumman Relocating to Washington, D.C.

From the Los Angeles Times, "Northrop Grumman Moving Headquarters From L.A. to Washington, D.C., Area":

In a blow to Southern California, Northrop Grumman Corp. said it would relocate its headquarters from Los Angeles -- leaving the region that gave birth to the aerospace industry without a single major military contractor based here.

The company said it would move its corporate staff to the Washington, D.C., area by summer 2011 to be closer to its key customer, the U.S. government.

Northrop's announcement was seen as a bitter pill for the much-battered regional economy, which has suffered a series of high-profile corporate defections in recent years.

"This is very bad news, a crummy way to get 2010 started," said economist Jack Kyser of the Los Angeles County Economic Development Corp. "It's a prestige type of thing. Whenever a metro area loses a corporate headquarters, it smarts. We can't forget."

Northrop joins a parade of other companies that have left in recent years, including Hilton Hotels Corp. of Beverly Hills, Computer Sciences Corp. of El Segundo, Orange County's Fluor Corp. and Science Applications International Corp. of San Diego.

The move came on the first working day for West Virginia native Wesley G. Bush, who succeeded longtime Chief Executive Ronald D. Sugar, who grew up in South Los Angeles and graduated from UCLA.

"This is an important move for the company, and it's one that we believe will improve the effectiveness in serving the nation and our customers," Bush said in his first public statement as the company's chief executive. "The proximity to Washington enables us to be a more integrated part of the federal process."

By relocating, Northrop brings its top executives closer to the nation's decision makers on Capitol Hill, as well as U.S. military and intelligence customers, Bush said. The Pentagon is its largest customer. The company develops and makes a variety of products, including unmanned aircraft, satellites and nuclear submarines.

All told, Northrop is moving about 300 people from its corporate office in Century City.

Although the company is shifting some of its administrative staff, California will remain a significant location for Northrop operations, especially in research, development and manufacturing, Bush said. He noted that a quarter of Northrop's worldwide workforce -- about 30,000 employees -- is in California, the vast majority in the Southland.

"We have been here, and will continue to be here, for a long time," Bush said, noting that the company assembles a major component for the F/A-18 fighter jet in El Segundo, makes satellites in Redondo Beach, and develops robotic planes in Rancho Bernardo and Palmdale.

Still, Northrop will now lose its distinction as the last major aerospace firm based in Southern California -- once home to many of the nation's largest military contractors, including Lockheed Corp., General Dynamics Corp. and Rockwell International.

"We were the capital of the aerospace industry prior to the collapse of the Soviet Union," Chapman University economist Esmael Adibi said. "We had major firms in Southern California, with operations across different counties. But slowly, we are no longer an important player in that segment."

Stories like this area always of great interest to me. When my parents moved back to California in the 1960s (from Europe, where my dad was a civilian service officer in the U.S. Army), we relocated to Torrance, in the South Bay area of L.A. County. Oil refineries, aerospace, and manufacturing were the big industries, along with Hollywood and the television industry. I remember in the early 1990s the defense downsizing, along with the housing bust of those years, sent the local economy into a massive tailspin. And nowadays, as a professor at Long Beach City College, my school's literally sitting adjacent to the Boeing manufacturing plant where the Boeing 717 commerical jetliner was built until 2006. (Also, "Boeing Moves to Close Plant.") On the military procurement side, Congress just authorized ten new Boeing C-17 Globemaster III transport planes, which are built on the other side of the Long Beach Airport. There's a story here, "Boeing C-17, Long Beach Jobs Get Final OK."