WASHINGTON — Less than a month after changing its leadership, Aerojet Rocketdyne announced March 9 a four-year plan designed to reduce the company’s costs by shrinking both its facilities and its workforce.
Under what the company calls its Competitive Improvement Program, the company plans by 2019 to reduce the footprint of its largest facility by 40 percent and reduce its workforce by 10 percent.
“Aerojet Rocketdyne has made a commitment to our customers and to the government to improve the affordability of our products,” said Scott Seymour, president and chief executive of both Aerojet Rocketdyne and its parent company, GenCorp, in a statement announcing the plan.
“We believe that these actions are essential to improving both the near and long-term health and performance of our business, in the context of a highly competitive and resource-constrained market environment,” he said.
The biggest effects of the plan will be on the company’s headquarters near Sacramento, California. Aerojet Rocketdyne plans to reduce the size of its facilities there, which currently encompass more than 230,000 square meters, to about 140,000 square meters.
Aerojet Rocketdyne spokesman Glenn Mahone said March 10 that the company plans to move solid-rocket motor manufacturing work for three missile programs currently done at the Sacramento facility to company sites in Arkansas and Virginia. Other potential consolidations are under study across all the company’s facilities, he said.
Aerojet Rocketdyne also plans to reduce its current workforce of more than 5,000 employees by 10 percent. Mahone said about 250 of the affected positions are in Sacramento. The company expects at least some of the job reductions to come through attrition, but he said that it was too soon to know how many employees, if any, would be laid off.
“This is a very difficult decision and I recognize the impact on our dedicated colleagues that will be affected,” Seymour said in the statement, in reference to the planned job cuts.
In a March 10 filing with the U.S. Securities and Exchange Commission, GenCorp said it expects the consolidation plan to cost the company $110 million over the next four years. However, the company expects the plan to result in annual savings of $145 million starting in 2019.
The announcement comes less than a month after Seymour replaced Warren Boley as president of Aerojet Rocketdyne. The company offered no official explanation for the Feb. 13 leadership change, but it came two weeks after GenCorp reported a net loss of $53 million in fiscal year 2014. Nearly all of GenCorp’s revenue comes from Aerojet Rocketdyne.
In a separate announcement March 9, GenCorp announced it will change its name to Aerojet Rocketdyne Holdings, Inc. The company’s ticker symbol on the New York Stock Exchange will change from GY to AJRD in late April.