Newspaper article THE JOURNAL RECORD

Lockheed Leaves California in Lurch

Newspaper article THE JOURNAL RECORD

Lockheed Leaves California in Lurch

Article excerpt

LOS ANGELES _ Dumped. Unceremoniously, unhesitatingly, just like that.

Lockheed Corp. and the state of California have spent more than a century together _ through arms races and recessions, world wars and Cold War, good times and bad times _ and now as part of its merger with Martin Marietta Corp., the aerospace giant is packing its corporate bags and heading east to Bethesda, Md.

And here's the real blow: Lockheed isn't moving its headquarters because some nasty takeover artist is insisting on it. Lockheed is the lead player in this deal, and Lockheed is making the call.

The Lockheed spokespeople don't put it quite that harshly. They point out that 27,000 workers will remain in the state after the merger, making California the new company's largest employment base. They also mention plans for a "residual office" near Lockheed's current suburban Calabasas headquarters, plus the facilities in Palmdale, Calif. and Sunnyvale, Calif. that will likely keep running.

"Lockheed is a company that was born and grew up in California," said Julie Meier Wright, secretary of the state's Trade and Commerce Agency. "We would expect that the combined company would continue to have a major presence in California."

But the assurances seem a tad hollow, for if the deal is completed _ and only antitrust objections or some crazy counter-bid stand in the way _ Lockheed will cease to be a California-based company, which for a state desperately trying to hold onto its Fortune 500s, represents a nasty body blow.

"This one was a stunner," said Jack Kyser, chief economist for the Economic Development Corp. "It's just a sign of the times (because) it will be a long time before you see any new defense programs down the pike."

And unlike recent corporate abandonments, this one never gathered public attention. Wright said she wasn't notified until Monday evening, just as the deal was announced, but it wouldn't have mattered if she found out earlier. The decision to move was made in the midst of a five-month mating dance between the two firms and Lockheed spokesman Paul Haney said it reflected simple geography: Bethesda is much closer to the two corporations' biggest customer _ the federal government _ than is Calabasas. …

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