Sikorsky Begins Layoffs in CT in Advance of Decision on Army Contract

March 21, 2023
Against the uncertain outcome of a protest awarding a major contract to rival Bell, Sikorsky reportedly has begun layoffs in, with those workers hitting a continuing strong job market for those with strong technical skills or or business experience.

Mar. 20—Against the uncertain outcome of a protest awarding a major contract to rival Bell, Sikorsky reportedly has begun layoffs in Stratford and Maryland, with those workers hitting a continuing strong job market for those with strong technical skills or business experience.

Sikorsky has begun job cuts among salaried employees not covered under union agreements, as reported by New Haven Biz. Sikorsky parent Lockheed Martin announced plans in January to eliminate 800 jobs in its rotary and mission systems division, without stating how many Sikorsky jobs could be cut.

The company employed 8,000 people in Connecticut at last report and 13,000 in all, with its workforce expanding and ebbing over the years depending on military orders.

In Maryland, the company is laying off about 175 people next month, which the Washington Business Journal reported is the result of testing having been concluded on Sikorsky's new CH-53K King Stallion helicopter for the U.S. Marine Corps. The Marines aim to field a fleet of 200 King Stallions now being built in Stratford.

A Lockheed Martin spokesperson forwarded a corporate statement to CT Insider saying the action addresses lower production volumes.

"We intend to retain as many as possible who can fill our open business-critical positions in our Rotary and Mission Systems business segment and across Lockheed Martin and will continue to hire for roles that are required to support our customers' urgent national security missions," the Lockheed Martin statement reads.

Sikorsky currently has more than 40 openings in Connecticut for varying positions.

The cuts come as Sikorsky awaits an April decision by the Government Accountability Office on a U.S. Army decision to replace the Black Hawk helicopter in the long term with a tilt-rotor aircraft proposed by Bell and its Providence, R.I.-based parent Textron, under the Pentagon's Future Long Range Assault Aircraft program, or FLRAA. Bell has already begun laying the plans for a new facility in Grand Prairie, Texas, to further develop systems for its V-280 Valor utility tilt-rotor picked by the Army, according to the Dallas Morning News.

In boilerplate language in its annual report and an investor document last week, Lockheed Martin raised the possibility of an impaired value for Sikorsky, a development that could impact profits if any such impairment were to be recorded in future quarterly results.

Bell and Sikorsky both remain in the running for another potential Army contract, to build a new fleet of armed scout helicopters. A planned "fly off" has been pushed back to 2024, after GE Aviation hit delays in a new engine planned for whichever company's aircraft is selected, according to Breaking Defense.

The White House is expected to unveil this year a new fleet of Marine One helicopters that are being built by Sikorsky in Stratford.

Last year, the Connecticut General Assembly signed off on incentives should Sikorsky win the Black Hawk replacement contract, the scout helicopter or both. In the interim, Sikorsky has continuing work producing Black Hawk helicopters for the Army and international militaries, King Stallion helicopters for the Marines, and a new rescue helicopter for the U.S. Air Force.

Under a prior incentive deal for King Stallion production, Lockheed Martin is getting $220 million in grants and tax exemptions over 15 years through 2033, promising to maintain a workforce of more than 8,500 people in Connecticut during the full production phase of the King Stallion. Through last June, Lockheed Martin had collected about $50 million in those incentives, according to the state's most recent estimates.

"When you look at where we are with CH-53K, between now and 2027 the revenues will double, so that'll be a big driver," said Jay Malave, chief financial officer of Lockheed Martin, speaking last week during an investment conference sponsored by JPMorgan Chase. "The upside from there would be if we are successful with FLRAA."

Luther Turmelle contributed to this report.; @casoulman


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