BAE Avoids Plant Shut Down … For Now

BAE Systems has been fighting to keep its York, Pa.-facility open after the Army announced plans to halt work on the Bradley family of fighting vehicles from 2014 to 2017. The company has been somewhat successful in reducing the time the assembly line would be shut down, with work at the facility planned to continue through mid-2015.

“We continue to work with the Army, and I think that they are beginning to understand some of our concerns. The challenge is, we’re trying to turn off and then turn on a major manufacturing and supply base,” said Mark Signorelli, the company’s vice president and general manager for armored combat systems.

BAE originally was contracted to deliver reset vehicles through the first half of 2014. The company was able to extend that delivery schedule through an agreement with the Army, Signorelli told National Defense at a media day in Sterling Heights, Mich.  In 2015, BAE will convert M3 Bradley cavalry fighting vehicles to M2 configurations, which increases the number of soldiers it can carry from four to seven.

Signorelli believes there may be more opportunities to meet existing Army requirements in a way that would keep the York plant from shutting down, such as converting additional M3s or upgrading other vehicles in the Bradley family, which includes the M88 recovery vehicle, the M109 family of vehicles, the Paladin integrated management howitzer and the M113 personnel carrier.

Possible sales to Iraq and Saudi Arabia could also keep the production line hot. Iraq is considering buying up to 200 vehicles. Saudi Arabia, which is the only foreign country with Bradleys, is considering doubling its 400-vehicle fleet.

Decisions from Iraq and Saudi Arabia could come as early as 2014 and 2015, respectively, Signorelli said. “Realistically, those sales won’t really start to impact the base until ‘16. So there’s a six- to 12-month period in there where we’re really concerned about ... are there opportunities to fill this” gap?

Although BAE has mitigated the major risks to the industrial base in 2014, layoffs at the company are unavoidable, and company leadership will have to consider shutting down some facilities, Signorelli said.

“We have already slowed down the procurement and manufacturing process, and the unfortunate thing is that it hits your supply chain first,” he said. “Typically six to 12 months in advance of the time that we start to see the impacts in our facilities, it has already hit the supply chain.”

Signorelli would not comment on how many workers could be affected by the closure of the plant. BAE estimates the Bradley industrial base is made up of 586 small, medium and large businesses that employ 7,000 people across 44 states and Washington, D.C.

A week after the media day, BAE announced the closure of one of the sites that make up the Bradley industrial base — its Fayette facility in Lemont Fernace, Pa. All employees will be either laid off or relocated to another facility by the end of the year, the news release said.
The Fayette plant employs 78 full-time workers and 35 contractors, said a report by ABC 27 WHTM in Harrisburg, Pa.

Topics: Business Trends, Defense Department, DOD Budget, Land Forces