Northrop to Relocate Division to El Segundo
Northrop Grumman Corp., the nation’s third-largest defense contractor, said Thursday that it would relocate the headquarters of its military aircraft business from Dallas to El Segundo, moving senior executives closer to the company’s largest aircraft operations.
Although only about 40 people will be relocated to El Segundo--mostly top executives and their administrative staff--the move was seen as a psychological boost to Southern California’s aerospace industry, which has had a stream of companies take their staffs elsewhere amid a general industry downturn in the 1990s.
The main office for the military aircraft business was once based in Hawthorne before it was combined with the commercial aircraft operations to form the Integrated Systems unit and then relocated to Dallas in 1999.
Since then, Century City-based Northrop sold the commercial aero-structures business, which made the fuselage for Boeing Co.’s 747 commercial jetliner, and has seen its Dallas headquarters staff dwindle to about 230.
At the same time, its Southern California operations have been regaining prominence, garnering major programs such as building the center fuselage for the Joint Strike Fighter and developing the Global Hawk unmanned surveillance aircraft.
Nearly half of the military aircraft unit’s 12,000 employees work in the region, most of them concentrated in sprawling facilities near Los Angeles International Airport.
“From unmanned systems to our role on the Joint Strike Fighter, Southern California is home to several of our most dynamic and promising programs,” said Scott Seymour, president of the unit. “Therefore, it makes sense to align our headquarters with our growing businesses.”
As part of the move, which is expected to be completed by the end of the year, 55 people in all will be moved to El Segundo and elsewhere, and 100 employees will lose their jobs. Seventy-five employees who work at the unit’s financial service center will remain in Dallas.
Meanwhile, General Dynamics Corp. said it was challenging the Pentagon’s awarding of a $2.9-billion contract to Northrop to develop the next generation of destroyers for the Navy, on the grounds that Northrop and its lead partner, Raytheon Co., were given an unfair advantage by a flawed competition.
The defense contractor, whose Bath Iron Works shipbuilding unit lost the competition, said it had filed a protest with the General Accounting Office, hoping to overturn the Pentagon decision last month.
“After careful review of the facts provided during the Navy’s debriefing, it is obvious to us that the selection process was not consistent with established evaluation criteria and thereby gave an unfair advantage to the ‘Gold team’ led by Northrop,” Bath Iron Works President Allan Cameron said.
A Navy official defended the competition, saying the contract was handled “in accordance with appropriate federal acquisition regulation procedures and was competitively awarded based on best value.”
He declined to discuss specific points of the protest.
