By Geoff Fein
Lockheed Martin [LMT] yesterday began notifying hundreds of employees that their services will no longer be needed following the White House’s decision to terminate the VH-71 presidential helicopter program.
“Today, we are notifying approximately 600 colleagues that their positions will be eliminated as a result of the decision to terminate the VH-71 presidential helicopter program,” the company said in a statement. “Under the New York Workers Adjustment Retraining Notification Act, affected employees will receive 90 days of continued pay and benefits. In addition, Lockheed Martin severance benefits will be provided to help ease the transition from the business.”
VH-71 is built at Lockheed Martin’s Owego, N.Y., facility.
While the company acknowledged the difficult step it must take, Lockheed Martin noted it has to take this action to comply with the government program termination.
“We must take this action now to ensure our compliance with the government’s direction to terminate the VH-71 program. Based on our business outlook, no further reductions are planned,” according to the statement.
Since Defense Secretary Robert Gates’ decision to terminate VH-71 this past April, personnel at Naval Air Systems Command (NAVAIR) have been focused on closing out the program and looking ahead to a new presidential helicopter effort, Cmdr. Victor Chen, a Navy spokesman, told Defense Daily.
“Since the VH-71 termination, the focus of day-to-day activities has shifted to the termination of one program and the prompt development of an FY ’11 follow-on program, as called for by Office of the Secretary of Defense,” he said. “Work in the near-term will focus on supporting development of these options as supported by the President’s Budget submitted to Congress. The Navy continues to explore all options for retaining government equities from our investment in the VH-71 program.”
In April, Gates pointed to the rising cost and schedule slip as reasons for the decision to end the presidential helicopter program.
“This program was originally designed to provide 23 helicopters to support the president at a cost of $6.5 billion. Today, the program is estimated to cost over $13 billion, has fallen six years behind schedule, and runs the risk of not delivering the requested capability,” Gates said at the time (Defense Daily, April 7).
A source familiar with the VH-71 program told Defense Daily that contract personnel at Naval Air Station Patuxent River, Md., know they will be leaving. Some personnel have already found jobs elsewhere, the source noted. Other employees will be leaving by Oct. 1.
According to the Navy, “government employees and contract support services personnel will be retained as required to support termination efforts.”
VH-71 was to be built in two increments. Increment I would provide five new aircraft for the president, along with several test vehicles for the Navy. Those five would be temporaries until the delivery of Increment II, which would have longer range, increased payload capability and improved endurance.
While the team of Lockheed Martin, AgustaWestland and Bell Helicopter Textron [TXT] were nearing completion on nine Increment I helicopters, Increment II posed challenges for the team (Defense Daily, Feb. 27).
Adding to the cost, schedule and technical issues that challenged the effort, in January, the Navy submitted paperwork notifying Congress that the VH-71 presidential helicopter had a Nunn-McCurdy breach (Defense Daily, Jan. 30).
Since December 2007, System Development and Demonstration (SDD) work on Increment II has been under a Navy issued a stop work order. There was an expectation the order would be lifted as of last October. The order, however, was extended to Sept. 30, 2009.
Even as the White House moves to end VH-71, some lawmakers were looking at ways to salvage parts of it.
In June, Rep. Roscoe Bartlett (R-Md.) floated the idea of building 14 of the Increment I aircraft under a fixed-price contract (Defense Daily, June 5).
“I was assured by the manufacture of the helicopter that they can do their part of it well within the $6.8 billion original forecast for what the presidential fleet would cost,” Bartlett said last month.
The proposal would include the nine Increment I helicopters either completed, or in various stages of production, and increase the total buy to 14 aircraft. No Increment II aircraft would be built under the plan, Bartlett added (Defense Daily, June 5).