| 2017-04-10 16:27:09|
AJRD 16:27 04/10 04/10/17
Aerojet Rocketdyne says expanded CIP program to result in $230M in yearly saving
Aerojet Rocketdyne, Inc., a subsidiary of Aerojet Rocketdyne Holdings announced plans for the next phase of its Competitive Improvement Program, CIP, that was launched in 2015. The next phase includes additional consolidation and optimization of Aerojet Rocketdyne facilities over the next two years. "We are two years into the first phase of our CIP affordability drive and the consolidation progress, and overhead cost reductions achieved to date have exceeded our expectations," said Aerojet Rocketdyne CEO and President Eileen Drake. "We intend to build on this success by expanding our CIP-related consolidation efforts so we can deliver the value our customers demand and position our company for further growth." Aerojet Rocketdyne plans to consolidate its Sacramento and Vernon, California and Gainesville, Virginia sites while centralizing and expanding its existing presence in Huntsville, Alabama with a new state-of-the-art manufacturing facility for AR1 engine production, Additive Manufacturing, Composites production and Research & Development, expected to be ready for production in mid-2019. "This expanded CIP effort is expected to result in $230M in annual savings once complete, inclusive of the $145M from the first phase of CIP," said Drake. "Given the dynamic nature of this industry, strategic business decisions such as these, while difficult, are critical to establishing a solid course for our future." At the company's Sacramento site, defense-related program management, engineering and related support positions will be moved to the company's Huntsville, Alabama facilities, home of Aerojet Rocketdyne's Defense headquarters and Rocket Shop? Defense Advanced Programs, by the end of 2018. The majority of the remaining programs and support positions will be relocated to the company's Space headquarters at its Los Angeles, California, site. Between now and the end of 2019, the company will complete its manufacturing commitments in Sacramento, and the site will become the Shared Services Center of Excellence. In total, approximately 1,100 of the existing 1,400 positions in Sacramento are expected to be relocated or eliminated. The company plans to close its Gainesville, Virginia facility in the third quarter of 2018. Approximately 170 positions there will be relocated or eliminated with relocations planned to Huntsville and the company's facility in Orange County, Virginia. To accommodate the company's consolidations, overall growth plans for Huntsville include the addition of approximately 800 jobs to support America's space and defense needs for the next quarter century and beyond. "We believe these actions are essential for the performance of our business and the growth of the company. The results from this initiative will benefit our valued employees, customers and shareholders alike," said Drake.