Alliant Techsystems Inc., the world’s largest maker of ammunition, plans to cut close to 200 jobs by April 1 as it faces heightened competition for its military contracts and lower demand from the Pentagon, CEO Mark DeYoung said.
The company, also known as ATK, plans to combine its missile unit with its armaments division, which produces munitions and rockets.
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Alliant employs about 20 armaments workers at an office in Clearfield, but no manufacturing takes place there, spokeswoman Amanda Covington said Thursday.
The company employs 17,000 people worldwide, including about 3,000 in Utah, mostly in its aerospace systems group.
Impacts at the Clearfield office, which is headquarters for the ammunition group, will be "immaterial," Covington said, but added that any specific information will be released later.
ATK’s major armament manufacturing facilities are in Independence, Mo.; Mesa, Ariz.; Radford, Va.; and Plymouth, Minn.
"Local leaders at those facilities are communicating with their employees today [Thursday]," Covington said. "Obviously we’ll have reorganization across the company as we make the shift."
On another front, ATK reported Thursday that its third-quarter profit missed analysts’ estimates because of lower sales of ammunition and aerospace products. The company also said fiscal 2012 sales would fall at the low end of its outlook and that it expects a "constrained federal budget" the following year.
"We’re going to have top-line pressure," DeYoung said. "We’re going to take proactive steps to continue to reduce costs."
BAE Systems, based in London, has been stepping up the competition for munitions contracts and revenue. The U.S. military on Jan. 24 awarded BAE a contract to operate the Radford Army Ammunition Plant. ATK had held the contract, valued at as much as $850 million for 10 years, since 1995.
BAE last month formed a joint venture with Olin Corp. to compete for ATK’s largest contract, for the operation of the Lake City Army Ammunition Plant in Independence. The contract, to be awarded this year, accounted for 15 percent of ATK’s revenue in the fiscal year ended March 31, 2011, and is valued at $2 billion over 10 years.
ATK’s armaments revenue may fall 13 percent in fiscal 2013 because of defense cuts and contracts lost to competitors, according to a report by KeyBanc Capital Markets Inc., a Cleveland investment firm. Authors Michael Ciarmoli and Kevin Ciabattoni reduced their rating of ATK shares last month to hold from buy.
Tribune reporter Cathy McKitrick contributed to this story.
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