Aerojet And Toyota: A Look At Two Exits From Golden State

Jeremy Bagott
Former Journalist. He writes about land-use and finance issues from Los Angeles.

Sacramento’s longtime golden goose Aerojet Rocketdyne was a feted fowl. But in April, the bird became the payload as the rocket-maker’s executives, after taking a gander at the state’s business environment, fitted the bird with one of its RS-25 engines and began the countdown to jettison her jobs out of state.

The tale of a similar exodus is in order as Aerojet nears its 2018 launch window. Torrance, in L.A.’s South Bay, knows the drill too well. Toyota announced in 2014 it would shutter its 110-acre North American headquarters there.

With two helipads, a data center, country-club amenities and a back-up power generation station, the Toyota campus employed 3,000. Its 2 million square feet of office and industrial space in 18 buildings will go dark as weeds sprout through tiny cracks in its 8,000 parking spaces.

In Sacramento, Aerojet is one of the city’s last publicly traded companies. Of the 1,100 management, engineering and support jobs that will evaporate, about 800 will reappear in Huntsville, Alabama. Supply-chain partners in Sacramento will become collateral damage, which is often the case in such departures.

In Torrance, Toyota’s announced retreat placed doubt on Panasonic and Kubota’s staying power. A year later, Panasonic become the second Japanese multinational to announce it would exit Torrance. Then, without missing a beat, Kubota announced its departure. Toyota and Kubota have received Texas-size welcomes in a pair of Dallas suburbs.

The state is still smarting from Nissan’s departure from Gardena for Nashville in 2006, and Toyota and GM’s departure from the NUMMI assembly plant in Fremont in 2010 (though Tesla has since found a home in the latter).

The cultural miscues in Torrance now seem laughable. Account managers at Toyota’s security contractor told of Japanese executives simply tapping a random security guard on the shoulder and expecting to be driven cross-country to an auto show in Detroit or Chicago. The Japanese execs saw the guards as a general labor pool and expected them to wash their cars and pick up their dry cleaning. Ah, the good old days.

In an upbeat op-ed in the Torrance Daily Breeze – with no hint of irony – Torrance Mayor Patrick Furey described the vibrant craft brew scene in town and the addition of a new lumberyard as an important offset to Toyota’s departure. So at least newly furloughed workers could quaff that hoppy IPA with notes of grapefruit or build that long-postponed pergola, to the extent their diminished incomes permit.

The Toyota compound is now up for sale at an undisclosed price.

“For a time, our phone was ringing off the hook,” with calls from potential buyers from the U.S. and abroad, the ever-chipper Furey told the Los Angeles Times in February. Names like Google and Tesla were being bandied about by local boosters earlier in the year as possible users for portions of the Toyota site. That buzz has since cooled.

Meanwhile, Sacramento’s Aerojet puts its projected annual  savings at $230 million for simply leaving California.

It was good of Aerojet to release this number.  Expect only platitudes from others. For example, being in Texas will allow Kubota to respond “more quickly” to market changes and “streamline its operations for both dealer and consumer benefit.”

In early June, Aerojet announced a successful test of its Exo-Atmospheric Kill Vehicle, launched from Vandenberg Air Force Base along the Central Coast. But Aerojet was no match for the weaponized job-killing bills launched annually from the corner of 10th and L street across town.

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