Layoffs became official today at the BAE Systems plant in Fridley -- 314 is the official number cut.
The layoffs unveiled today are the inevitable fallout from a Pentagon decision earlier this year to end a crucial Army contract to build the Non-Line-of-Sight Cannon, a weapon designed and built at Fridley and once thought to be a battlefield weapon of the future.
We've been keeping close tabs on the project's fate and its potential effects on the Fridley workforce after a source in MPR's Public Insight Network alerted us to what was happening. About a month ago, more than 300 workers were placed on paid leave.
It's not clear if 314 is the final layoff number. Earlier this year, BAE said about 400 of the roughly 1,500 jobs at the plant were tied to the cannon.
Here's the official announcement from BAE late this afternoon:
BAE Systems has announced an involuntary layoff of approximately 314 employees at its Minneapolis facility. These layoffs come as a result of the Partial Termination Notice and Stop Work Orders the company received for its FCS manned ground vehicle program contracts.
BAE Systems deeply regrets having to reduce its workforce, but given circumstances beyond our control, we are left with no other choice. The company will continue to aggressively pursue future opportunities in order to maintain market share.
UPDATE: Regarding possible future layoffs, a BAE spokeswoman tells us:
At this point, we do not anticipate additional reductions. However, there may be unforeseen circumstances in the future that would require us to reevaluate this issue.
We will continue to monitor our business situation and work with customers to assure that our business and staffing plans are aligned to meet the customer's requirements and our future strategic objectives.
Here's a post from Public Insight Network editor Andrew Haeg:
One aspect of the health care debate that's gotten lost in the ruckus is the economic argument for health care reform--an argument that transcends party lines. It's on our minds because of a storyline we're hearing repeatedly from self-employed Minnesotans in the Public Insight Network, like Mark Long of Minneapolis.
"The first thing you ask yourself before you start a business," Long says is "not will someone buy my product or service" but, "can I afford health care?"
Less than half of small businesses with three to nine employees offer health care, according to research from the Council of Economic Advisors. Those small companies that do manage to provide the benefit, pay on average 18 percent more per worker than larger companies, says the same study.
The burden is getting heavier for Long. He and his wife are barely able to afford their health care plan, which has risen an average of 10 percent a year. Thankfully, they're healthy and, right now, they have enough to pay for their high-deductible plan. But not for long.
"We will close our business and find jobs that offer health coverage if nothing is done to curb costs in the next 10 years," he says. And that's without any major, unexpected health issues.
We've heard from several self-employed Minnesotans who are seriously considering leaving the land of the scrappy and self-employed. Less than a year ago, John (not his real name, he requested anonymity so his current employer wouldn't find out) had to quit working as a self-employed consultant in Plymouth when he found out he had inflammatory bowel disease. John said the move was all about risk management. He was covered by his wife's plan (and still is) but worried that if something happened to her job, they would be in big trouble.
"Closing my consulting business and getting a job was a way of hedging my bets," he says.
That sort of risk calculus is, at least anecdotally, forcing more self-employed to make similar decisions. The net effect is that, as Mark Long says, "The cost of health care absolutely is crushing innovation and entrepreneurship."
For yet more evidence, Consider Jenn Posterick of St. Francis. She runs a small massage business, but is sidelining her business and urgently looking for full-time work so she can get health care benefits.
"Ironic," she says, "that I care for other people but have a hard time caring for myself."
Here's a post from my colleague Mike Caputo:
When economic times are good, people tend to function on auto-pilot. Who needs deep introspection when salaries are rising and profits are rolling in?
But hard economic times can force people to re-engage, and ask tough questions about what they do for a living, and how they do it.
"This recession has caused me to step back and rethink my business," says Public Insight Network member Kevin Stirtz. He runs a customer loyalty consulting business. The recession is forcing Stirtz and others to ask core questions about their business strategy and personal commitments.
I've asked the questions: What do I really love to do? What do I do very well? What do my customers want most? " he says. "Where these answers intersect is where I am pointing my business. The recession has caused me to ask the questions. But the answers are based on the lifestyle design I want, NOT the current economic climate.
Others have to reconsider how they bring their creative side to their venture.
"I've been stunned into new activity," says Georgia Gould-Lyle, a freelance publicist from Golden Valley. The recession has made her scrappier and more willing to try something off the wall as a way to attract potential clients.
In contrast, Minneapolis graphic designer Lori Gleason says she has had to pull back on the more creative aspects of her work.
"The nature of my work is highly customized and many clients cannot afford this right now," Gleason says.
I am "streamlining" all of my products (logo design, printed materials and web design) to offer small packages that clients can afford. It's quite a challenge and is not very satisfying creatively right now. I must learn to "shut down" the creative process of generating ideas to stay within time constraints that are practical. But necessity is the mother of invention and I plan to develop a leaner but smarter business over the next few months.
Getting back to basics is a major theme of these economic times. So much so that, in September, Minnesota Public Radio will host a forum with small business owners, freelancers and entrepreneurs to explore how the economic climate has challenged their fundamental values.
Would you like to participate? Start by sharing your story about the challenging economic times and your values.