Thursday’s announcement will bring employment at the facility from 294 employees to 134 employees. The company announced that 160 people will be losing their jobs when BAE Systems transfers military production from Butler County to its Sealy, Texas, facility, which is 50 miles west of Houston.
The trend in military spending doesn’t bode well for military production. The U.S. Defense Department has been told to cut $487 billion from planned spending over the next 10 years, starting next year.
“This is a significant cut and we have spent the past eight months on the Armed Services Committee carefully reviewing the administration’s specific proposals to meet this goal consistent with our national security needs in a dangerous world,” said Sen. Rob Portman (R-Ohio). “Every day that passes without removing the threat of sequester brings increasing uncertainty that is having a negative effect on our economy and its workforce within our nation today.
Such doubts are having chilling effects on the defense industry now, Portman said.
“Many of the industries are not hiring at all or at the rate they would be if sequestration were off the table,” he said. “Firms are already reluctant to make speculative capital investments – starving our economy of the stimulus such investments bring. Furthermore, companies are not investing in training their workforce to their desired capacity because that very workforce may have be laid off if sequester occurs.”
The military production part of BAE Systems produces armored cabs, turrets and armor parts supporting armored military ground vehicles and construction equipment for the U.S. Armed Forces and original equipment manufacturers of military vehicles. BAE Systems’ local facility will continue work on commercial armored vehicles, transparent armor and JLTV engineering.
“The decision to cease military production in Ohio and transition the work to our Sealy, Texas, plant streamlines our organization, reduces cost and improves our competitive position,” Keller said. “We own the facility in Sealy and it is more cost-effective for BAE Systems to consolidate the military production work currently being performed in Ohio to Sealy.”
As part of an enterprise zone agreement with Butler County and the township, BAE Systems was to retain 75 percent of its committed jobs, township spokeswoman Barb Wilson said. That translates to about 520 employees.
In 2011, BAE Systems fell below minimum employment requirements as stipulated by the agreement and remained there for 2012.
Should the company remain below 75 percent of the estimated created or retained jobs for a third consecutive year in 2013, the Butler County Tax Incentive Review Council could take action in 2014 to recover tax incentives provided to the company.
BAE Systems has been a good corporate neighbor, but “their market has changed and they have to make difficult decisions,” Wilson said.
“West Chester, however, continues to be successful in job creation and retention and we continually see new investment and new jobs in our community,” she said.
“With the continued investment in West Chester, both new companies locating and existing companies expanding, the economics will be absorbed,” said Judi Boyko, the township’s administrator. “At this time the most important thing is to assemble and introduce resources to those BAE Systems’ employees in the hopes of re-engaging them in the workforce.”
The facility at Le Saint Drive will release employees from November through April, according to the company.
“BAE Systems is committed to assisting employees through these difficult times,” Keller said.
Severance packages and career transition assistance will be available to all full-time employees, the company said.
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