US Defense Budget Cuts Causes Army Ground Vehicle Program To Close

This post is also available in: עברית (Hebrew)

In a surprise announcement with serious implications for the US Army’s ground vehicle industrial base, BAE Systems announced that it is shutting its Sealy, Texas, production facility by the end of June 2014.

According to Defense News a total of 325 employees will be put out of work between November and June, and some of the work being done at the facility will be moved to other BAE facilities, a spokesperson for the company said.

The facility at Sealy was focused on wheeled vehicle production. With orders having dried up for mine-resistant ambush-protected vehicles and the family of medium tactical vehicles, and no new orders coming in, the company commented it did not have sufficient work to keep the line open.

iHLS – Israel Homeland Security

“We explored every possible option to maintain the viability of the facility, but the decline in US defense spending has made it necessary for us to continue rationalizing our business base,” said Erwin Bieber, President of BAE Systems Land & Armaments sector, in a statement.

“This was a difficult decision, but it in no way reflects upon the hard work and commitment of the employees. We will do all we can to assist them during this difficult transition.”

The move has implications beyond BAE Systems. The company had an agreement with Lockheed Martin to manufacture Lockheed’s Joint Light Tactical Vehicle (JLTV) at Sealy, but the company said that it will still provide the armored cabs, protection solutions and manufacturing expertise. Lockheed said that it is moving production of the JLTV to the company’s Camden, Ark., manufacturing facility.

In August, 22 JLTV prototypes left the Sealy line en route to the Army as part of the program’s Technology Development and Engineering and Manufacturing Development phases.

BAE executives have been warning of layoffs for some time.