One week after reporting a $230 million loss for 2005, Vought Aircraft Industries announced Tuesday that it plans to eliminate up to 600 jobs locally, most of them at its Dallas aircraft-parts manufacturing plant.
In a tersely worded statement released by the company, Chief Executive Elmer Doty said 450 employees whose jobs do not directly involve manufacturing or assembly of aircraft parts and structures will be laid off by mid-April and an additional 150 by midsummer.
The action comes as Doty tries to stanch Vought's losses, which have mounted over the past two years after the privately held company undertook a restructuring plan aimed at moving work from plants in Stuart, Fla., and Nashville to its Dallas and Grand Prairie facilities.
"What I am announcing is difficult but necessary, given our situation," Doty said in the prepared release. "Our situation is simple -- we are spending more than we are taking in. We have to fix this."
Vought officials declined to comment further. The release said the cuts were one of several steps being taken to boost cash flow and trim costs.
The layoffs, which amount to about 15 percent of Vought's 4,000-plus work force in Dallas and Grand Prairie, come little more than two years after the state of Texas gave the company a $35 million grant in exchange for a pledge to create 3,000 new jobs by 2010. The company had added about 800 jobs since it announced plans in 2004 to close the other plants and move the work to Texas over a three-year period.
Kathy Walt, spokeswoman for Gov. Rick Perry, said state officials were aware of the impending layoffs but still expect Vought to abide by the agreement.
"They have five years to get to their target," Walt said. "There are claw-back provisions in the contract" that allow the state to reclaim the money.
"They will be held to the contract terms."
The Vought announcement comes after a week of rumors that cuts were imminent. James Splawn, president of United Auto Workers Local 848, said he received a letter from Doty on Tuesday saying the company had "no choice but to eliminate the jobs of a lot of very good people."
Splawn said the cuts will likely come from both union and nonunion positions. Some nonunion workers, who moved up from the production lines earlier in their tenure at Vought, retain rights to revert to their old positions. That, in turn, could result in other production workers losing their jobs.
Vought is owned by the Carlyle Group, a Washington, D.C., investment group. The company has not turned a profit since it was purchased from Northrop Grumman Corp. in 2000 in a leveraged buyout. The company's losses increased in 2004 and 2005, totaling $385 million, after it began the reorganization plan.
The company announced in December that the Nashville and Stuart plants would remain open indefinitely and that some of the work the company planned to shift would no longer be moved to Dallas.
But in recent weeks, Splawn and others said, the company has shifted some work that had been brought to Dallas back to Nashville. The individual plants are now bidding to see which can perform work at the least cost.
"At this point all I can tell you is we're in a bidding war with the other sites," Splawn said.
Doty, who joined the company Feb. 1, has declined interview requests.
He apparently hasn't spent much time talking to employees either.
"We requested a meeting to hear his game plan, but we haven't heard anything," Splawn said. "I've never seen the lack of communication we have right now."
Vought is one of the world's largest producers of large aircraft structures and a major supplier to Boeing, Lockheed and Airbus, among others. The company reported sales of $1.3 billion for 2005. It also operates facilities in Hawthorne, Calif.; Everett, Wash.; and near Charleston, S.C.
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