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Lockheed Martin laying off 110 at Lexington facility

Global defense contractor Lockheed Martin is laying off about 110 employees from its Bluegrass Station facility in Lexington, the Maryland-based company confirmed Tuesday.

Lockheed Martin attributed the layoffs, which began late last month, to the changing status of a key Special Forces aircraft contract, which is ending production, said spokeswoman Melissa Hilliard.

"This decision comes after a thorough assessment of the work required to execute current and projected work on the Special Operations Forces Contractor Logistics Support Services contract," Hilliard said in a statement. "Employees at Bluegrass Station do excellent work. This reduction is purely a business decision to ensure appropriate staffing levels as requirements on aviation task orders transition from aircraft production to aircraft sustainment."

To receive supplemental severance benefits, laid-off employees were required to sign a release of claims, which apparently would prevent them from talking to media.

More layoffs might be coming: "Lockheed Martin will continue to monitor its operations and staffing needs and adjust accordingly to drive efficiency and affordability for our customers," Hilliard said in the statement. "We are working diligently with customers to bring in new work and expand current task orders. Workforce level projections are contingent upon these factors. As such, we are continuously evaluating available work, cost efficiencies and customer requirements."

State economic development authorities have touted Lockheed Martin jobs as secure employment opportunities.

In October, the defense contractor received approval from the Kentucky Economic Development Finance Authority for up to $10.8 million in tax incentives for the creation of 391 jobs and a $15 million project investment.

According to the KEDFA report, "Lockheed Martin was recently awarded a major contract for logistics support services to perform task orders for the government based upon nine core capabilities: some of which include aviation repair, warehouse supply services, small arms weapons repair, communications equipment, manufacturing and production. The company is fulfilling this contract at its facility in Lexington, Ky."

Lockheed must maintain base employment level of 1,009 in Fayette County to receive the incentives, which expire in October 2015.

It is unclear how the incentives will be affected by the recent layoffs.

Gov. Steve Beshear hailed defense contractor work at Bluegrass Station as a major job creator. But the results on the ground have been less robust.

"The announced layoffs at Lockheed Martin are very disappointing, and our hearts go out to the more than 100 affected employees impacted," Beshear said in a statement. "Unfortunately, Lockheed Martin has to deal with a loss of business as a result of budgetary reductions at the Department of Defense, which in turn impacts these employees in Lexington."

Incentives for Lockheed Martin originally were approved in February 2011 for up to $15 million for a $26 million investment and creation of 224 more jobs.

Lockheed was required to maintain base employment of 1,705 to qualify; the company was never able to claim the incentives.

Instead, employment apparently has dropped by 700 workers in 2½ years.

In September 2011, Lockheed decided to in-source work being done by a subcontractor; that resulted in almost 500 employees being laid off, although as many as 422 could have been hired back. It's unclear exactly how many Kentucky workers — who had to compete with potential new employees for their old jobs — were hired back.

Lockheed Martin's Bluegrass Station facility also was under federal investigation by the Department of Labor for wage and hour issues. Labor officials had no immediate comment on the results of that investigation.

Members of the "Lockheed Martin Team" at the plant in eastern Fayette County worked behind the scenes on helicopters for the 160th Special Operations Aviation Regiment at Fort Campbell, which ferried in Navy SEAL Team Six for the assault on Osama bin Laden's compound and took his body out.

Workers were laid off less than six months later.

Hilliard, the Lockheed Martin spokeswoman, said the company is working with laid-off employees "to see if there are other positions within the company that they would like to apply for, that their skill set would match."

According to the company, Lockheed Martin employs about 113,000 people worldwide. For its most recent quarterly earnings report, in April, the company said its profit jumped 23 percent to $933 million and sales fell 3.8 percent to $10.7 billion.

On Monday, the company was awarded a $915 million contract by the Air Force to build a radar system to track space junk.

Last month, the company announced it will expand its space systems business by buying Astrotech Space Operations, an Austin, Texas-based provider of satellite launch preparation services. The deal, if approved, is valued at $61 million and would close in the third quarter of this year.

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