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General Dynamics tells 139 workers of pending layoffs

By Andrea Shalal-Esa

WASHINGTON (Reuters) - General Dynamics Corp said on Monday it notified 139 of its employees at the U.S. Army Depot in Anniston, Alabama last week that they face layoffs beginning in March due to a reduction in the company's production of Stryker armored vehicles.

General Dynamics issued notices to the workers under the federal Worker Adjustment and Retraining (WARN) Act, notifying them that the expected layoffs will kick in from March through April, said company spokesman Peter Keating.

The company already laid off 98 people at the facility last year. The latest layoff notices will reduce the number of General Dynamics workers to around 260 from just over 400 now, Keating said. He said additional layoffs may be announced later, depending on the level of work to be done at the facility.

Many of the workers are represented by the United Steelworkers of America union.

General Dynamics says it could have staved off those layoffs if the Army had placed additional orders valued at around $170 million to retrofit existing Stryker vehicles with a tougher hull designed to survive roadside bombs, but those orders did not come through in time.

The Army and other military services are unsure about future budget levels given mounting pressures on the overall defense budget, and the failure so far of lawmakers to avert $500 billion in additional spending reductions due to kick in on March 1.

Over 300 workers at the General Dynamics plant wrote to Alabama lawmakers in December, urging them to continue their efforts to avoid what they called "unnecessary layoffs," especially since Army officials have already said that more double V-hulled Strykers will likely be needed in the future.

The Army has a total of 3,300 Strykers, including about 600 built with the double-V hulls, and nearly 50 that were retrofitted with the stronger hulls.

General Dynamics says it can exchange the hulls on the wheeled military vehicles for about half the cost of building new ones. It says the new hulls protect soldiers about as well as Mine Resistant Ambush Protected vehicles built specifically to reduce injuries and deaths caused by roadside bombs.

It has urged the Army to place orders for additional upgrades now, arguing that interrupting production and restarting it later will be more expensive and will trigger layoffs at its own facility and those of key suppliers.

Some of those workers could be rehired later, depending on when additional orders are placed.

Senator Richard Shelby, an Alabama Republican and member of the Senate Appropriations Committee, warned the chief of staff of the Army, General Raymond Odierno, in a letter in December that delays in placing orders for a third brigade of Strykers with the double-v hull could jeopardize good jobs at the plant and would put U.S. soldiers' lives at risk.

In the letter, Shelby said Army officials had told him they planned to buy a third brigade of the upgraded vehicles, which he said offered an exponential increase in soldier safety, but could not give him a timeline for signing a contract with General Dynamics and starting production.

"I ask that you personally engage on this issue to ensure our bureaucracy does not unnecessarily limit the rapid production and fielding of this needed capability," he wrote.

No comment was immediately available from the Army.

Of the 406 General Dynamics workers now at the plant, about 350 currently work on the Stryker program, a company spokesman said. If no contract is signed with the Army for additional hull exchanges the total number of workers is likely to be reduced to around 159, the spokesman said.

(Reporting By Andrea Shalal-Esa; Editing by Bernard Orr and Tim Dobbyn)

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