Louisville, KY (WHAS11) - Raytheon Missile Systems in Louisville has laid off 51 of its 415 employees.
The 42 union workers and nine salaried employees were informed of the reductions Friday morning.
“Today’s action is to better align the workforce to current and future business requirements,” said Raytheon spokesman John Eagles.
Armed with information about their unemployment benefits and career counseling, the laid off workers walked out of Raytheon Friday morning.
A “number of factors” contributed to Raytheon's decision, Eagles said, yet it is clear that reduced defense department budgets are reducing Raytheon's work and workforce.
"The whole budget cutting phenomenon can have uneven effects throughout the country," commented Steven Koven Phd, an assistant professor of management and urban policy at the University of Louisville.
"In the abstract, some people like cutting spending because they think it will lower taxes," Koven continued, "It might stimulate business development and lift the economy in the long run, but that's a long run phenomenon."
When federal contracts are trimmed or cut, the job cuts are immediate.
The Strawberry Lane plant manufactures, repairs and overhauls the Phalanx Close In Defense System for the US Navy and 23 allied nations. Made of radars, computers and one huge Gatling gun, the Phalanx can fire 4,500 bullets every minute. But it is defenseless to budget cuts.
"Over time there might be a reaction and people might say this is really hurting our economy," Koven said, "and we need to take a second look, but that time is not here yet."
One year ago, Raytheon was granted $500,000 in state tax incentives tied to jobs and the expansion of its Louisville facility. However, Eagles said Raytheon did not initiate the incentives and never put them in force.
The spokesman added that Raytheon hopes to rehire the workers when the business climate improves.
The Louisville plant also makes a ground-based version of the Phalanx, launchers for another ship-defense system, and a guided missiles system with automatic tracking capabililty.