Bell Helicopter to lay off 325 workers as V-22 orders decline
By YAMIL BERARD | Fort Worth (Texas) Star-Telegram | Published: May 6, 2014
FORT WORTH, Texas — Bell Helicopter is cutting 325 more jobs as the Fort Worth-based manufacturer continues to downsize in the face of declining defense spending and competitive pressures, officials said Monday.
The layoffs will affect both managerial and nonmanagerial employees, as well as employees who are members of the United Auto Workers Union Local 218 in Hurst, the company said.
The latest cuts, which will largely affect its Fort Worth operations, brings Bell’s staff reductions to more than 700 since early last year.
The company, which is a division of Rhode Island-based Textron, reported a drop in revenues of $76 million, or 8 percent, to $873 million, in first-quarter earnings released last week. The sales slump was blamed on lower commercial and military aircraft deliveries, according to the report.
Bell CEO John Garrison attributed the new round of layoffs to continuing reductions in the nation’s defense budget.
“Staffing decisions like this are always difficult — but it is necessary to ensure that Bell Helicopter remains a viable business in the future,” Garrison wrote in a memo to employees Monday.
UAW officials did not respond to an email requesting comment about the layoffs.
Bell had announced several layoffs since March 2013. In January this year, it announced 115 layoffs for company engineers. In September, it laid off 290 workers, mostly in Fort Worth. And in March 2013, it announced layoffs of about 15 hourly workers. It has also offered buyouts to workers 55 and older.
In recent years, the Pentagon has cut by almost half its orders for the V-22 Osprey, the tilt-rotor aircraft produced in Fort Worth and Amarillo. Under a current contract, which ends in 2015, the company is producing about 30 aircraft a year. More than 200 Ospreys are in operation.
In June 2013, the company was awarded a second multiyear contract to build 99 more V-22 Ospreys. The five-year contract for production and delivery of the aircraft was valued at about $6.5 billion, officials said. The contract with the U.S. Naval Air Systems Command also included a provision to produce 23 additional aircraft.
The V-22 uses tilt-rotor technology to combine the speed and range of a fixed-wing airplane with the vertical performance of a helicopter. The aircraft, produced in partnership with Boeing Co., is being used in Afghanistan to ferry freight and soldiers. It’s assembled at Bell’s plant in Amarillo with many parts made in the Fort Worth area.
Last year, Israel requested U.S. permission to buy six V-22s, which would be the first foreign sale of the tilt-rotor.
In last week’s earnings report, Textron said that Bell delivered eight V-22s and five H-1s in the quarter, compared with nine V-22s and six H-1s in last year’s first quarter. Deliveries of commercial helicopters declined to 34 from 40 units last year.
Textron said that Bell’s first-quarter profit decreased by 25 percent to $96 million, primarily reflecting an unfavorable mix of commercial aircraft deliveries and the lower volumes.
Bell’s backlog at the end of the first quarter was $6.3 billion, down $197 million from the end of 2013.
Bell employs about 6,500 workers in Tarrant County, of whom 5,000 work in the Fort Worth area.
The company is undergoing a $235 million modernization of its headquarters in east Fort Worth, including construction of a 200,000-square-foot, four-story administrative building scheduled to open this year.
Bell will consolidate operations from other parts of Tarrant County when the expansion is complete.
The city of Fort Worth approved a tax-incentive deal worth $13.5 million over 10 years for the expansion. As part of the deal, Bell committed to keep 4,500 employees in Fort Worth through 2020, 4,100 workers in 2021 and 2022, and 3,900 from 2023 through 2028.