Officials at Bell Helicopter Textron [TXT] Oct. 29 said the company would lay off approximately 500 workers, representing about four percent of the workforce, following the Defense Department’s decision earlier in the month to terminate the potential $6.2 billion Armed Reconnaissance Helicopter (ARH) development contract.
Richard Millman, president and CEO of Bell Helicopter, said, “With the loss of the ARH-70A program, we must make changes in our staffing and structure to reduce costs and ensure that our products remain competitive. Staffing decisions are always difficult, especially in light of the global economic conditions. Our actions are intended to ensure that we retain the talent most needed for the projected business environment and treat every affected employee fairly and with respect and dignity.”
In accordance with government regulations, Bell will provide pay and benefits to the affected employees for 60 days following the date of their layoff notice. It will also provide severance pay in accordance with standard company policy.
Bell has made arrangements to provide each employee with post-employment support through the services of an outplacement firm and the Texas Workforce Commission.
The program termination was filed late on the same day Textron reported its earnings. In its recent Securities Exchange Commission 8-K filing, Textron said it was assessing avenues whereby “we may recover some or all of our inventory and obligations to vendors, as well as the amount of our ultimate vendor termination obligations,” Karen Gordon, a company spokeswoman, said.
Meanwhile, the company is cooperating with the government as the ARH contract is closed. The Army is moving forward quickly since the armed reconnaissance helicopter requirement for 512 aircraft remains (Defense Daily, Oct. 20).