COVINGTON, La. -- Today, Gov. Bobby Jindal joined Globalstar Inc. (NASDAQ: GSAT) CEO Peter Dalton, Globalstar Inc. Chairman Jay Monroe, Louisiana Economic Development Secretary Stephen Moret, St. Tammany Parish President Kevin Davis and Greater New Orleans Inc. President and CEO Michael Hecht to announce Globalstar will relocate its corporate headquarters to Covington, La., from Milpitas, Calif. Additionally, Globalstar will relocate a variety of other global business functions to Covington, including product development, finance, accounting, sales, marketing, corporate communications and customer care.
Under a cooperative endeavor agreement with LED, Globalstar has committed to relocate or create more than 150 new jobs by the end of 2011, increasing to more than 200 new jobs by 2013. Additionally, the agreement calls for Globalstar's total Louisiana employment to increase by more than 500 by the end of 2019. LED estimates the direct new jobs will result in the creation of approximately 800 new indirect jobs, for a total of roughly 1,300 new direct and indirect jobs in Louisiana. LED further estimates the Globalstar project will result in $26.1 million in new, state tax revenue and $8.3 million in new, local tax revenue over the next 10 years.
"Today's announcement is a big win for Covington, the North Shore and our whole state," said Gov. Jindal. "This is exactly the kind of company that we positioned Louisiana to secure when we created Louisiana FastStartTM in 2008 and enhanced our digital media incentive program in 2009. Since early 2008, leading companies have announced moves of their headquarters or other significant operations to Louisiana from a wide variety of states, including California, Georgia, Mississippi, Rhode Island, Virginia, Wisconsin, Illinois, Oregon and Texas. And we're not stopping there. With our nation still enduring tough economic times and our state facing thousands of job losses associated with the federal deepwater drilling moratorium, our efforts to retain and attract jobs are more important than ever."
LED's Business Expansion and Retention Group began discussions with Globalstar several months ago after the company purchased Louisiana-based Axonn. Prior to selecting Louisiana for its new headquarters location, Globalstar executives considered a variety of locations in other U.S. states and Canada.
"Relocating to Covington will help dramatically reduce our operating costs as we execute our next-generation strategic initiatives," said Monroe. "We are positioning Globalstar for long-term success by lowering our cost of operations, improving revenue growth and speed to market for new products through vertical integration and through the introduction of new and innovative products developed in Louisiana. Thanks to LED's progressive digital interactive media incentives and tax credits, Globalstar can expect to benefit immediately and on an annual basis well into the future. The Gulf region boasts much lower taxes and employee cost of living compared with our former home in Silicon Valley. Combined with the work ethic and resourcefulness of the state's workforce, you have an extremely attractive environment for innovative global companies such as ours."
"Today is a great day for Globalstar, our stockholders and employees, and we are proud to call Covington and the state of Louisiana our new home," said Dalton. "This move maximizes the benefits of our recent acquisition of Covington based satellite asset tracking and messaging products manufacturer Axonn and creates in Globalstar the first and only vertically integrated mobile satellite company. Physically relocating our product team to work directly with the former Axonn engineers not only decreases our pre-production costs but it will shorten the time to market for our company's integrated wireless and satellite based products. We considered relocating our headquarters to numerous states but the overall advantages of moving here were simply too compelling to ignore."
To secure the headquarters relocation, LED committed to provide Globalstar with $4.4 million in performance-based financial assistance to reimburse expected relocation costs, as well as $3.7 million in performance-based incentives to offset facility costs for Globalstar's new headquarters and research and development operations in Covington. Through Louisiana FastStart, LED will provide customized workforce support to Globalstar, including assistance with employee recruitment, screening, training development and training delivery. In addition, Globalstar intends to use LED's recently enhanced Digital Media Incentive.
"This is an exciting win for Louisiana not only because of the new, high-paying jobs it will bring, but also because Globalstar is in one of our top new target growth industries for Louisiana -- digital media," said Moret. "Silicon Valley doesn't have a monopoly on innovation. Louisiana increasingly is being viewed as a great place in which to base a company that requires creative talent. This is only the beginning of an exciting new trend."
"We are extremely pleased to welcome Globalstar to Louisiana, and specifically, to St. Tammany Parish," said Davis. "We have created a business friendly climate in a unique area and are pleased to be one of the anchors of technology in Louisiana's economy. The people of Louisiana want to work, and we are glad Globalstar is giving us this opportunity. Our goal to make our entire region and Louisiana as a whole a nationally recognized corridor of technology is something we strive to achieve every day."
"Globalstar's move to Louisiana is significant not only in and of itself, but also because it will announce to the world that Greater New Orleans is a world-class location for high-technology companies seeking a better business environment," said Hecht. "We competed against locations around North America for this project, and won due to our business conditions, lifestyle, leadership and parish/region/state teamwork to get the deal done."
Globalstar Inc. (NASDAQ: GSAT) offers high quality, low-cost satellite voice and data services to commercial and recreational users from virtually anywhere in more than 120 countries around the world. The company is one of only a limited number of companies in the world that actually owns its constellation of satellites, and has recently invested over $1.2 billion in procuring and deploying a second generation of more modern satellites. Moreover, Globalstar is the world's first Low Earth Orbiting global satellite voice and data company that is on track to deliver and deploy a second-generation satellite constellation, giving the company a significant advantage over its competitors.
Established in 1991 and beginning commercial service in 1999, Globalstar currently offers service in more than 120 countries, as well as from most territorial waters and several mid-ocean regions. Globalstar acquired Axonn in 2009, which provided Globalstar ownership of Axonn's GPS tracking, messaging and other data-transmission products.