By Bill Hudson, WCCO-TV

EAGAN (WCCO) — The sprawling glass paneled plant has been a fixture along Pilot Knob Road in Eagan since 1967. Sitting on a 50-acre parcel of prime real estate, Lockheed Martin’s engineers and skilled workers have been designing some of the most sophisticated communications equipment for the U.S. military. News of Lockheed’s intentions to phase out the plant by 2013 is sending shock waves throughout the city of 67,000 people.

One of the plant’s major contracts has been electronic equipment onboard the aging P-3 Orion submarine surveillance plane, headed for retirement.

“I am disappointed, because it’s going to affect the community and it’s disappointing that a lot of people in the area will be losing their jobs,” said Steve St. Marie.

One-thousand people are currently employed at the plant — down from the estimated 3,000 employees from several years ago. But as the Pentagon makes cuts to the defense budget, defense contractors are left little choice but to make cuts too!

“This isn’t the first time we’ve been dealt this kind of news here in Eagan,” said Eagan Mayor Mike McGuire.

For the city, it’s the second setback in as many years. The sprawling Northwest Airlines world headquarters campus just a few miles away in now empty. That’s the result of the merger with Delta Airlines and its decision to consolidate the office jobs at Delta’s Atlanta headquarters. The decision meant another 1,000 jobs were exported out of the city and Minnesota.

The impact, according to McGuire, is that, “there are small businesses that are potentially impacted by this. Those people live and work and play in the community and there are community contributions that come from those employees.”

It’s obvious that the impact will be felt in many ways. However, McGuire adds that the city can boast of another 50,000 jobs in Eagan. From that standpoint, the looming Lockheed loss would represent about 2 percent of the city’s workforce.

Lockheed intends to offer transfers to roughly 650 of the Eagan workers to relocate to other company facilities on the east and west coasts. Still, barring a change of heart, the technology rich plant will be prime for redevelopment as recession thaws and companies grow.

“While it is discouraging and I understand that, everybody needs to process through the shock and emotion,” said McGuire.

McGuire says city and state leaders will first try to get Lockheed to reconsider its decision to shut the plant down. But if that effort fails, city leaders are confident the site will be highly valued because it sits along a major artery and is wired with fiber optic cable.

A city spokesperson confirms that the city has already taken calls by several interested developers expressing interest in the property.