Reduced military spending and the loss of a defense contract will lead General Dynamics to drop 75 percent of its work force and change the mission of its once-thriving Force Protection plant in Ladson by year's end.
By December, the company that once had as many as 2,000 employees in 2007 at the height of the Iraq and Afghanistan wars no longer will make mine-resistant vehicles at the sprawling 400,000-square-foot plant.
General Dynamics said Monday it will lay off 170 workers at the factory along U.S. Highway 78 and reorganize the site as a "center of excellence," retaining about 50 workers to supply spare parts and supplies and offer field service support to its domestic and international customers.
The Virginia-based company's Land Systems division currently employs 226 people at the facility across from the Exchange Park Fairgrounds.
The majority of those getting pink slips, 143, will be out of a job by June when production on the Buffalo mine-resistant, ambush-protected vehicle, or MRAP, ends.
The facility makes the Buffalo, another MRAP model called the Cougar and peacekeeping security vehicles for the U.S. government and international customers.
"The company has arranged a variety of programs to assist these workers with their transition from General Dynamics," company spokesman Pete Keating said.
The site's new mission will include a core team with representatives from various departments to ensure continuity with existing customers, including the Marine Corps, the Defense Logistics Agency and international clients. It will focus on program management and support.
The shift away from manufacturing is the latest turn of events for a scrappy homegrown business that went from making prototype tank-like vehicles on the former Navy base about 17 years ago to playing a key role in the war on terror.
By 2007, Force Protection was an independent $1.3 billion a year supplier for the defense industry with about 2,000 workers on its payroll. It was nearly bankrupt by 2008, when new management was brought in to stabilize and diversify the business as vehicle orders slowed.
General Dynamics announced it was buying Force Protection in late 2011 for $360 million.
Even though General Dynamics will no longer make military vehicles at the Ladson plant, it doesn't mean another company won't be making some type of vehicle, Keating said.
The company is seeking to finalize an agreement with a "well-known South Carolina company" to maintain vehicle fabrication and assembly in the area. Keating declined to name the company, saying he hoped an announcement will be made soon.
"We won't be making the vehicles, but someone else could be making vehicles," Keating said. "It's a leased facility. They will have the ability to make the same military vehicles, but they could put other work in the building to support the lease and the cost of the production line for a much lower volume."
For instance, the new manufacturer could open the production line to fill a few military orders and then go back to building nonmilitary vehicles, he said.
Keating said the current contract to make 600 Buffaloes is coming to an end and General Dynamics tried to gain another contract through the State Department for vehicles going to Africa, but another company won the work.
General Dynamics has picked up other contracts since then, but it was not enough to make up for the loss, Keating said.
"Six-hundred-vehicle production is on an infrequent cycle," he said. "You are also seeing some contraction on the world market."
Reduced U.S. military spending has been trickling through defense contractors the past couple of years as the wars in Iraq and Afghanistan wound down, forcing them to look overseas to emerging markets in Asia and the Middle East to make up the difference. When those contracts don't come through, production cuts have to be made.
Defense analyst Winslow Wheeler with the Project on Government Oversight and Center for Defense Information in Washington said it's not the government's place to keep people employed in projects no longer needed.
"The purpose of the defense budget is not to provide jobs," he said. "It's to provide defense."
The U.S. has so many MRAPs, Wheeler said, it can't figure out what to do with all of them.
For General Dynamics, MRAP production in Ladson will soon end.
The company has no plans to trim the remaining 56 employees after December, Keating said.
"There is room to grow," he said. "We will see how it works out."
The company's decision to reduce the work force in Ladson does not affect its plant in Leamington Spa in the United Kingdom, where the Foxhound Light Protected Patrol Vehicle is made for the British Army.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.
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