HARLINGEN — Space company United Launch Alliance has issued layoff notices to dozens of workers at its local facility, raising questions about how long the rocket-engine production site will operate here.
Officials with United Auto Workers Local 2346 confirmed 26 union workers at the facility at Valley International Airport will be laid off today. They also said 17 non-bargaining unit employees in management would be let go as well, leaving about 75 workers at the facility.
“Any layoff is tough,” said Juan Silva, president of Local 2346. “On the union side, they understand because we go by seniority and they’ve pretty much accepted it already.
“But nonetheless, it’s not a good sight,” Silva said yesterday.
The Harlingen facility’s specialty, the Atlas launch vehicle, has been a true workhorse for the company since its inception in 2002. But ULA is transitioning to the new Vulcan launch vehicle, and most Vulcan production work apparently will go to the ULA facility in Decatur, Alabama.
“Harlingen basically builds products for only one rocket — the Atlas rocket,” said Donald Mac Tavish, bargaining unit chairman for Local 2346. “The other facilities at ULA build Atlas and Delta rockets, and they’re going to be building the new missile — the Vulcan.
“This is supposed to be far more competitive price-wise with the competition,” Mac Tavish said yesterday. “But they have informed us on three occasions that we will not be getting any of that work.”
Emails and phone calls to ULA headquarters in Colorado were not answered yesterday.
ULA has been buffeted by the sudden competitiveness of the space launch industry, with Elon Musk’s SpaceX undercutting what ULA charges for launches. Another competitor, Jeff Bezos’ Blue Origin, announced in March it had signed its first customer for its New Glenn launch vehicle in commercial satellite operator Eutelsat.
Although widely recognized for reliability and its safety record, ULA executives last year admitted their firm could not match the launch prices of SpaceX.
The cost of a ULA launch to customers was a minimum of $125 million per launch but usually closer to $200 million, ULA executives said then. By contrast, SpaceX has been launching payloads as low as $60 million per launch.
Tory Bruno, ULA’s chief executive, has said his company hoped to reduce its costs to sell $99 million launches, and part of that savings would come from significantly reducing its workforce.
In April 2016, Bruno said the company would likely cut its workforce by 374 jobs in 2016 and another 400 to 500 employees in 2017.
Local union officials said while management employees let go in Harlingen will be receiving severance packages, bargaining unit employees did not have that option.
“They’re just getting laid off, and they will be getting unemployment,” Mac Tavish said.
“It’s very unfortunate because I know they’re going to have a very hard time finding a job here with the same benefits and pay scale,” he added.
It appears the loss of nearly 50 employees at the Harlingen facility also leaves ULA in violation of financial incentive agreements it signed with the Harlingen Economic Development Corp.
In March, the HEDC’s chief executive officer, Raudel Garza, announced the economic development agency had approved $150,000 for ULA after it met 2016 employment goals agreed upon with the city.
Garza said yesterday the minimum number of jobs required for ULA to meet its part of the agreement was 125 full-time equivalent employees.
“Yes, it is sad, but unfortunately it wasn’t totally unexpected since they announced that there would be layoffs company-wide some time ago,” Garza said yesterday.
“Like any other entity that enters into a development agreement with us, they are expected to live up to their obligations in order to earn the incentives,” he added. “Failure to meet the goals usually means that they will not be eligible to receive incentives.
“Our hope is that they approach us with a new idea related to their future growth,” Garza said.
The ULA facility is one of the cornerstones of Valley International Airport’s Aerotropolis project.
“Of course we are disappointed with the layoffs; however, we are hopeful that ULA will continue to see an economic benefit in the Harlingen facility as they develop the new Vulcan rocket,” said Marv Easterly, director of aviation for VIA.
United Launch Alliance has been in Harlingen since its inception in December 2006 when Lockheed Martin Corp. and The Boeing Co. established the joint venture. The company employs a total of 3,000 people.
ULA also has been hurt financially by the loss of its 10-year monopoly on space launches for the U.S. military. Last year, military leaders for the first time granted SpaceX the right to bid on and launch military satellites.
SpaceX’s first military contract will put a Global Positioning System satellite into orbit for the U.S. Air Force in May 2018. The fixed launch cost of $82.7 million is for a Falcon 9 rocket, spacecraft integration, launch operations and spaceflight certification.