Layoffs Loom as U.S. Army Mulls Stryker Upgrade

Nov. 22, 2012 - By PAUL McLEARY Defense News

More than 100 civilian employees at the Anniston Army Depot in Alabama are facing layoffs in January unless the U.S. Army decides before the start of the year to refurbish more than the 47 Stryker vehicles it has already contracted for as part of the upgrade program.

On Nov. 8, General Dynamics Land Systems issued notices under the Worker Adjustment and Retraining Notification Act to 139 employees working on the Stryker exchange program, in which parts from old vehicles are used to complete new-build Strykers.

The move follows recent announcements by vehicle makers Oshkosh Defense and BAE Systems that they are letting go of 450 and 145 employees, respectively, as a result of a slowdown on Army ground combat vehicle programs.

While General Dynamics is waiting until January to begin the layoffs, it does not appear any new Stryker work will come in by then — if it ever does — according to Scott Davis, the head of the Army’s Ground Combat Systems office.

Davis told Defense News the Army “is thinking through and prioritizing whether we want to continue” with its Stryker exchange program, part of a public-private partnership between General Dynamics Land Systems and Anniston.

The Army and General Dynamics will finish producing the 47 Strykers under contract early in 2013, but “I don’t hold an active requirement or the dollars to continue it” after that, Davis said. He added that his shop is preparing to brief Army leadership on the cost and benefit of modernizing Strykers in December, while a decision on which platforms and which capabilities might be upgraded is expected in February.

The Stryker exchange program harvests usable parts from older, flat-bottomed Strykers and uses them to complete builds on new double-V-hull Strykers (DVH) at Anniston. Company officials say the exchange program will not only give the Army more durable combat vehicles but also drive the cost down from $2.4 million for a new DVH to $1.6 million for an exchange vehicle.

Without new DVH contracts, operations at the facility will drop to 13 vehicles a month, well below the minimum requirement of 20 vehicles per month needed to keep the workforce at current levels.

The Army has ordered 789 DVH Strykers, and about 500 new DVH vehicles have been delivered from the Anniston facility.

The Stryker program is not the only one Army leadership is fretting over.

When it comes to overall budget pressure, Davis said, “we cut through the skin and we’re down to the bone” on development activities, and “any additional pressure will make it extremely difficult” to continue to modernize and upgrade all variants of combat vehicles on schedule.

One of Davis’ chief priorities is to identify ways to protect both the manufacturing and the intellectual industrial base in the face of budget cuts, he said. The number of companies that can design and build ground combat vehicles is limited, he added, saying, “the intellectual industrial base is mostly BAE and GD — it’s those engineers and logisticians who provide the design improvement skills” that he is looking to retain.

One of the big points of contention when it comes to the service’s ground vehicle industrial base is the battle over the Abrams tank line in Lima, Ohio. The Army doesn’t want to begin the next major round of Abrams modernization until 2017, and on Sept. 27, it awarded General Dynamics an eight-year, $395 million contract to study what capabilities it can add to the platform when those upgrades begin.

Davis said the Army and General Dynamics are studying the critical skill sets that need to be preserved at Lima and how much workflow will have to go through the line to sustain it at the minimum level of 33 tanks a month. The Army is conducting a four-month industrial base study to flesh out those issues.

One thing Davis said might help is foreign military sales (FMS).

“We’re very, very much in support of putting FMS in Lima,” he said. “We’ve got active cases in Saudi Arabia, Egypt and Morocco [for Abrams tanks], and to a large degree, that will help span that gap of U.S. production.”

The Saudi and Moroccan deals have not been fully approved by the U.S. government, but Davis said “if things go the way we anticipate it with FMS, we feel good about” the Lima Abrams line being able to meet its minimum production rate.

Because the Army and industry face the quandary of Abrams, Stryker and Bradley production ending in 2014, other new programs — such as the Armored Multi-Purpose Vehicle (AMPV), the M113 replacement — have taken on added importance. The service has said it plans to buy up to 3,800 AMPVs, making the program “pretty critical” for the overall health of the industrial base.