Fairchild Industries Inc., unable to find either overseas buyers for its A10 combat-support aircraft or friends in Congress who will continue the project for the Air Force, said yesterday it planned to mothball part of the giant Hagerstown plant that makes the plane and begin laying off workers.
The 704th of the 713 A10s that Fairchild is building for the Air Force was in final assembly at the 900,000 square-foot Hagerstown plant yesterday, and the company has been unable to find any new buyers for the plane, which some analysts believe is too expensive and complex for most foreign air forces.
The Germantown-based company said it would lay off 400 workers at Hagerstown as a result of the waning production of the A10, as well as a slowdown in Fairchild's work building subassemblies for the Boeing 757 and a reorganization of the Hagerstown plant that will end non-manufacturing functions at the facility.
In addition, Fairchild warned that it would lay off additional workers if it cannot soon find customers for the A10, which is now scheduled to go out of production next February.
Fairchild said it would lay off 240 workers because of the slowdown in the A10 and 757 programs and 160 because of the plant reorganization, and mothball 312,000 square feet of manufacturing space at the facility. The Hagerstown plant employs 1,600 workers.
"I think they are realistically coming to the conclusion that it's harder to sell A10s than they had hoped," said Eliot Fried, an analyst at Shearson American Express. "It's a very difficult period to make foreign sales."
The company appeared to be on its way to buying a little more time for the program on Monday, when the Senate Armed Services Committee approved a $50 million plan to build spare parts for the A10 at Hagerstown. That contract will allow the company to operate the plant a little longer while it searches for foreign buyers.
But Fairchild so far has been unable to win congressional approval of a far more ambitious plan to to build 24 more A10s for the Air Force.
One analyst who follows Fairchild, however, suggested yesterday that the company's layoff announcement might be a ploy to drum up new congressional interest in the A10 program. "When you say you're laying off people, it's to point attention to the 24-plane proposal ," said the analyst, who asked not to be named.
Fairchild's Hagerstown plant also builds a variety of subassemblies for Boeing's new 757 passenger jet, including fuselage and wing parts. But several airlines have delayed scheduled purchases of 757s, slowing Boeing's demand for the Hagerstown products. Fairchild is producing three or four sets of subassemblies a month at the plant.
The Hagerstown plant might be in for a revival in mid-decade as Fairchild gears up for the production of the new T46 training plane. But a spokesman said yesterday the company had not yet decided where the T46 would be produced.