Harman to Stay in Northridge, Add 250 Workers

In a bit of good news for a local economy that’s been hurt by the departures of high-profile companies in recent years, Harman International Industries Inc. said it plans to remain in Northridge and expand its work force.

The audio equipment company, which markets components under the well-known brand names JBL, Infinity and Harman Kardon, had considered moving to another location in California or out of state when its current lease expires in less than five years.

Harman President Bernard Girod explained that “the lease we negotiated 10 years ago is very expensive by today’s standards” because of the downturn in the local real estate market.

Plus, the company needed more space to launch its new line of multimedia speakers, Girod said. It looked at other sites in Southern California as well as Indiana, Texas and North Carolina.

But Girod said his preference is to remain at the current location because it would mean less disruption to the company’s operations and its 2,500 workers. And the pension fund owners of the two Northridge buildings Harman occupies were willing to negotiate more favorable lease terms. As a result, Girod said, Harman has committed to a new, $100-million lease through 2010.

Harman is completing a $10-million reorganization of its 750,000-square-foot facility to make room for the computer-speaker division and make its entire manufacturing operation more efficient. Former warehouse space has been converted to manufacturing use. Girod said that three nearby buildings that were badly damaged in the Northridge earthquake two years ago might be torn down to make room for a 75,000-square-foot engineering and office facility for Harman.

The company plans to hire about 250 additional workers by April to staff the computer-speaker division. The unit has already begun selling speakers to industry giant Digital Equipment Corp. and is talking with other computer makers, Girod said.

Harman was founded more than 40 years ago by Sidney Harman, who also served as U.S. undersecretary of Commerce in the Carter administration. He remains chairman and chief executive, splitting his time between Southern California and Washington, D.C., where his wife, Jane, is a U.S. representative for the South Bay area. The company’s headquarters are technically in Washington, although the bulk of its operations are in Northridge.

Although Harman became best known over the years for high-quality speakers and sound systems that appealed mostly to audiophiles, in recent years the company has expanded into broader markets. It now sells its equipment through mass-merchandising outlets as well as specialty stereo stores.

In its fiscal year ended June 30, Harman earned $41.2 million, a 60% increase over $25.7 million in the previous fiscal year, while its sales rose 36% to $1.17 billion from $862.1 million.

Girod said most segments of the business are doing well, including those catering to the automobile, professional and overseas consumer markets. Only the domestic consumer market remains soft, he said.