WASHINGTON — A $12 billion U.S. Defense Department program to build an amphibious tank at a Lima, Ohio, factory was canceled Thursday, killing plans to hire 250 workers next year and jeopardizing 200 existing jobs.
Peter Keating, a spokesman for the northwest Ohio plant run jointly by the federal government and General Dynamics Land Systems, said the decision will mean an end to the planned hiring within a year and could affect existing workers.
“There's going to be some consequences,” he said.
The plant, called the Joint Systems Manufacturing Center, has about 1,000 workers, all performing military work, including doing welding and assembly of Abrams tanks.
Lima Mayor David Berger said the Defense Department decision was unexpected.
“I believe there are 200 jobs currently that will be affected by that decision, and that's a very immediate concern for us as to what implications this has for people already working,” he said.
Allen County, where the factory is located, has a jobless rate of 9.8 percent, with 5,000 people out of work.
A typical tank plant job yields $65,000 in pay and benefits.
“General Dynamics is really a tremendous industrial assert not only for Lima, but for the nation,” the mayor said. “The [plant] has been working on the development phases of the [fighting vehicle] for years and this year it had worked out a number of glitches in the previous testing.”
General Dynamics has been developing the latest assault vehicle for the U.S. Marine Corps since 2003. The Expeditionary Fighting Vehicle, as it is called, is a 31-ton, sea-going tank that can carry 17 marines at a speed of 20 knots for 25 miles in the water, then go up to 300 miles on land at a speed of 45 mph.
The defense contractor has spent about $3.3 billion developing the vehicle, producing 16 prototypes over seven years. It delivered to the Marine Corps the final seven prototypes last year. Those went through successful sea trials off the coast of Camp Pendleton, Calif., General Dynamics said.
But Defense Secretary Robert Gates announced Thursday announced cuts of $78 billion, which included the Expeditionary Fighting Vehicle. The Marine Corps had wanted 1,000 of the vehicles and $8.2 billion had been included in the Defense department's budget to build 573 of the vehicles.
Although the vehicle was in testing, Mr. Keating said, General Dynamics planned to start production in early 2012 and start hiring and training workers at the Lima plant late this year.
He said the company must consider other options for employees who had been trained to build the fighting vehicle. The Lima factory once employed thousands, but had dropped to 400 workers a few years ago and recently rebounded to 1,000 workers.
Mayor Berger said: “We have gone through a number of peaks and valleys with Defense-related decisions. So we have gone through this before. But I think the fact this is surprising in that is the Marine Corps continues to articulate the need for this vehicle. It's mission critical for them. It's a vehicle they say they need to carry out their operations throughout the world.”
General Dynamics, in a statement, lamented the end of the program: “As to affordability, the Marines could purchase fewer vehicles and still capture the value of the investment made to date. Purchasing 200 vehicles — two Marine Expeditionary Brigades' worth — would give the Marines the new capability and still save approximately $4.6 billion from the current estimated program cost.”
The Marines use a 1960s-era amphibious assault vehicle that the Expeditionary Assault Vehicle was designed to replace.