Aerospace electronics maker Rockwell Collins Inc. is expanding in Orange County after slimming down its local operations a few years ago.
The Cedar Rapids, Iowa-based company plans to shutter its operations in Pomona and move about 500 workers to a 213,000-square-foot site in Tustin.
The company also is set to shift 120 workers from another site in Tustin and nine in Costa Mesa to Tustin Commons, an office and industrial park north of Jamboree Road near the Santa Ana (I-5) Freeway.
The move, which is expected to wrap up next year, will combine Rockwell Collins’ engineering operations for airline passenger entertainment systems,a growing business for the company.
Rockwell Collins signed a 10-year lease for the site at Tustin Commons, which is being renovated.
“One of the things we are trying to do is make a statement to the employees,” said Denny Helgeson, vice president and general manager of business and regional systems. “For them it should mean more opportunities as we move forward.”
Rockwell Collins got into the inflight entertainment market by acquiring Hughes-Avicom International in Pomona in 1997. After it bought Irvine-based Sony TransCom in 2002, Rockwell Collins moved about 200 workers to Pomona.
It also bought Tustin’s Airshow Inc. in 2002, but kept those workers in OC.
Consolidating inflight entertainment operations is part of a bigger move by Rockwell Collins to group its similar businesses at fewer sites.
Tustin was attractive because it’s in the heart of the region’s aerospace industry, including big operations of Boeing Co. and Raytheon Co., Helgeson said.
The OC site should help with recruiting and keeping workers in the competitive industry, he said.
“Things seem to be moving a little bit south” from Los Angeles to OC, Helgeson said.
Rockwell Collins’ Tustin Commons operation will house mostly engineers. More could be on the way from other Rockwell Collins sites, though Helgeson declined to give any specifics.
The company’s Pomona operation builds “cabin electronics,” which give airline passengers screens with basic flight information, video and music options.
In Tustin, the company’s Airshow unit develops electronics for private jets. They include TVs, maps and high-speed networking.
The small Costa Mesa operation makes radios for government customers.
“The passenger and cabin businesses really have a lot of common technologies,” Helgeson said.
Other Unit: Kaiser
Rockwell Collins has another unit in OC, Kaiser Electroprecision. The Irvine-based operation won’t be folded into the new site because it makes unrelated products for fighter pilots, spokeswoman Pam Tvrdy said.
With the Pomona workers, Rockwell Collins will become a top 10 defense contractor in the county by employees. Its estimated 250 Kaiser workers put Rockwell Collins at No. 15 on the Business Journal’s ranking of top defense contractors.
The company saw some challenges when commercial airline travel fell following the 2001 terrorist attacks. There were fewer new airline orders, and upgrades to existing ones were put off amid the airline industry’s struggles.
Rockwell Collins, which spun off in 2001 from what’s now Rockwell Automation Inc., cut some 200 workers in Irvine and more than 300 in Pomona since the attacks. But the company said its worker cuts are over.
In the past year or so, the commercial airline sector has rebounded and Rockwell Collins’ businesses have benefited.
The company’s Pomona unit returned to profitability in the quarter ended Dec. 31 and also was in the black in the March quarter, Chief Executive Clayton Jones said during an earnings call earlier this year. The company is set to report its June quarter results this week.
The Tustin business is a key growth driver at Rockwell Collins, said Chris Sessing, senior equity analyst at AMI Asset Management in Los Angeles. The company counts about half of its annual sales of $3 billion from commercial-related work, he said
“They’re the leader in the commercial entertainment industry,” Sessing said.
Revenue from its private jet business is on the rise. Executives are asking for more services from the cabin electronics systems, including scrolling news, telephones and networking.
“The market is broadening,” Sessing said. “Now, it’s becoming kind of a business necessity.”
The company also could use its inflight entertainment contract wins to sell other aircraft electronics gear that Rockwell Collins makes, Sessing said.
Rockwell Collins’ move to Tustin Commons follows last year’s sale of the complex. Palo Alto-based Broadreach Capital Partners LLC and Stonewood Properties of Newport Beach bought the 15-acre site last summer.
The buyers spent about $35 million to buy and renovate the 1960s-era buildings, including putting on a new facade, said David Simon, managing director of Broadreach in Los Angeles.
Jeff Manley, Ken Ward and Ken Blye of Cresa Partners in Newport Beach represented Rockwell Collins in the lease deal. John Collins of Voit Commercial Brokerage LP represented the owners.
