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General Dynamics Plans Stryker Layoffs

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After months of waiting for the U.S. Army to confirm plans for converting its 700-unit fleet of Stryker armored personnel carriers from a "flat hull" configuration to more survivable, MRAP-like "double-V hulls," defense contractor General Dynamics (NYSE: GD  ) is done waiting. According to the company, it's begun taking steps to wind down retrofitting operations on the vehicle at its facility in Anniston, Ala.

To date, GD's Land Systems subsidiary has converted 51 of the vehicles to a double-V configuration at the Army's request. But it's recently had to slow the conversion rate to about 20 vehicles a month, and it anticipates having to cut this rate in half before ultimately winding down the operation. At the Anniston location, 139 jobs are at risk, and the company has begun notifying workers to expect that layoffs will begin in March.

Pete Keating, vice president for communications at General Dynamics Land Systems, notes that converting the Stryker to the more survivable double-V configuration costs about $1.6 million per vehicle, or about half the cost of building a new Stryker from scratch.

General Dynamics shares closed up 0.3% Tuesday at $70.58.

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8/26/2016 4:02 PM
GD $151.58 Down -1.10 +0.00%
General Dynamics CAPS Rating: ****