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Facility Closures & Downsizings: Lockheed Martin Shrinking its Real Estate Footprint

Also: Pinnacle Airlines Flying Off to Minneapolis, Vacating Memphis HQs After Occupying for One Year; and Corporate Layoff Axes Dulling
January 30, 2013
Lockheed Martin CEO and president Marillyn A. Hewson says the huge defense contractor still has a lot of shrinking to do.

Talking to analyst on its fourth quarter earnings conference call, Hewson told analysts a lot of the corporation’s downsizing will come from reducing its leased real estate footprint.

“We have had some reductions in force. We’ve taken out some management layers. We’ve been collapsing some organizations in order to get some cost out in that regard,” Hewson said. “And on the footprint side, we’ve taken out about 1.9 million square feet for the last couple of years, and we are going to take another 2.9 million [square feet] between now and the end of 2014.”


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“I believe there are also opportunities for us just to continue on an ongoing basis to drive cost out so that we can meet the demand of our customers,” she continued. “We’ve been getting out of leased space, for example.”

As of a year ago, Lockheed Martin owned 45 locations totaling 29 million square feet, and leased space at 528 locations aggregating 25 million square feet.


Pinnacle Airlines Flying Off to Minneapolis, Vacating Memphis HQs After Occupying for One Year


Pinnacle Airlines Corp. plans to relocate its headquarters to Minnesota from Memphis, TN. The decision came after an exhaustive evaluation of the most cost-effective option as the company emerges from Chapter 11.

The airline said it also considered staying in present headquarters location. Pinnacle took occupancy of 170,000 square feet at One Commerce Square in downtown Memphis in November 2011. The headquarters houses 500 employees.

Tentative plans call for the move to Minnesota to be completed by May 2013.

Pinnacle’s operation will be located in vacant space leased by Delta Air Lines on Minneapolis-St. Paul International Airport property.

“We had the responsibility to explore every aspect of our business to find opportunities to reduce costs, including evaluating our property leases, to find the most economical options for Pinnacle,” said John Spanjers, president and CEO of Pinnacle Airlines. “Our analysis covered everything from the available labor pool and operational alignment to economic incentives. Both Memphis and the state of Minnesota presented very strong cases. In the end, it was an economic decision.”

“This is a significant milestone in our restructuring and represents substantial progress that we expect will allow us to continue down a path toward successfully emerging from bankruptcy,” Spanjers said.

One Commerce Square is a 416,633-square-foot, Class A office rise built in 1972. With Pinnacle’s exit, the building now has 285,674 square feet of availability; the average asking rent for the property is $19.00/square foot/year.


Corporate Layoff Axes Dulling


Mass layoffs declined last year to their lowest level since the onset of the Great Recession.

Employers laid off 137,839 in mass layoffs in December, the U.S. Bureau of Labor Statistics reported. That was down more than 35,000 from the previous month. Notably, such layoffs usually go up in December as corporations prepare for the new year.

For all of 2012, the annual totals of mass layoff events, at 17,080, and of initial claims, at 1,666,931, declined to their lowest levels since 2007.

Eleven of the 19 major industry sectors in the private economy reported decreases in initial claims in 2012, led by administrative and waste services, manufacturing, and information. In 2012, total initial claims in the manufacturing sector declined to a series low 448,687.

The manufacturing sector accounted for 24% of all mass layoff events and 29% of initial claims filed in the private economy in 2012, down slightly from 2011 percentages. The number of manufacturing claimants in 2012 was highest in transportation equipment and in food. Total initial claims in 17 of the 21 manufacturing subsectors decreased in 2012 from 2011, with transportation equipment and wood products experiencing the largest declines.

The six-digit industry in the private nonfarm sector with the greatest number of initial claims in 2012 was temporary help services. Casino hotels entered the list of 10 industries with the highest initial claims for the entire year and reached a program high. Two other industries among these 10 reached program highs in 2012-school and employee bus transportation and food service contractors.


Facility Closures & Downsizings




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CompanyAddressCityStateClosure or LayoffLayoffsImpact Date

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Toys-R-Us8140 Santa Ana Canyon RoadAnaheimCAClosure301/26/2013

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Bank of America275 Valencia AvenueBreaCALayoff511/29/2013

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NBTY Acquisition810 & 901 E. 233rd St.CarsonCALayoff731/31/2013

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Directory Distributing Associates6241 Randolf St.CommerceCAClosure281/27/2013

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All State Promotions3111 Barrymore DriveConcordCAClosure1041/31/2013

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Waggin' Train Distribution (Nestle Purina)1351 Railroad St.CoronaCAClosure141/31/2013

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St. Jude Medical Center (St. Joseph Health)101 E. Valencia Mesa DriveFullertonCALayoff571/2/2013

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Corix Utilities (US)11752 Markon DriveGarden GroveCAClosure101/31/2013

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Directory Distributing Associates2891 Hopkins St., Suite 6HaywardCAClosure171/27/2013

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Cirque Du Soleil (Iris)6801 Hollywood Blvd., Suite 180HollywoodCALayoff1051/29/2013

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Bank of America176 & 177 Holston DriveLancasterCALayoff611/29/2013

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All State Promotions234 Nieto Ave.Long BeachCAClosure851/31/2013

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Evergreen International Aviation (Eagle)5720 Avion Drive (Lax)Los AngelesCALayoff1821/31/2013

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Directory Distributing Associates1870 Wardrobe Ave.MercedCAClosure421/27/2013

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International Paper Co.568 S. Riverside DriveModestoCAClosure195/2/2013

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Corix Utilities (US)1642 S. Sacramento Ave.OntarioCAClosure11/30/2013

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St. Johns Regional Medical Center1600 N. Rose Ave.OxnardCALayoff361/31/2013

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Paramont Petroleum Refinery14700 Downey Ave.ParamountCALayoff591/28/2013

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Campbell Soup Supply Co.6200 Franklin Blvd.SacramentoCAClosure2901/2/2013

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Safeguard Properties Management301 E Vanderbilt Way, Suite 350San BernardinoCAClosure1684/2/2013

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Abercrombie & Fitch4545 La Jolla Village DriveSan DiegoCAClosure621/26/2013

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All State Promotions3695 Texas, Suite 4San DiegoCAClosure331/31/2013

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Science Applications International Corp (SAIC)4242 Campus Point CourtSan DiegoCALayoff571/2/2013

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Bank of America400 National, 2900 N. Madera, 450 AmericanSimi ValleyCALayoff511/29/2013

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Safeguard Properties Management30870 Russell Ranch RoadWestlake VillageCAClosure824/2/2013



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