NO LOVE AT SIKORSKY HELICOPTERS (04/26/24)

APRIL 26, 2024 — 1,500 LAYOFFS

The company has announced it is continuing its restructuring plan, which includes about 1,500 layoffs after the U.S. Army program ended the Future Attack Reconnaissance Aircraft scout helicopter and Shadow unmanned aircraft programs.

OCTOBER 5, 2023 — 179 IN CONNECTICUT

The company has announced that 179 employees in the company's business segment face layoff because “several major programs are progressing into production and they no longer need the same level of development support.”

According to a company spokesperson, "This was a difficult decision to make, and we intend to retain as many people as possible to fill our open business-critical positions that are required to support urgent national security missions.”

Sikorsky’s spokesperson also noted, that “they've been impacted by ongoing material shortages, which have affected their cost competitiveness.”

MARCH 3, 2023 — 176 EMPLOYEE LAYOFFS IN MARYLAND

The company, responding to the end of a contracted program, has announced plans for layoffs of 176 employees supporting the heavy lift helicopter program at Naval Air Station Patuxent River in Maryland.

According to a spokesperson, “We made staffing adjustments to the team supporting the heavy lift helicopter program at Naval Air Station Patuxent River, Maryland, to reflect the planned progression and conclusion of the CH-53K system development and demonstration test and evaluation program.”

JANUARY 25, 2023 — 800 POSITIONS IN ROTARY WING BUSINESS

Lockheed Martin announced that is cutting 800 jobs in its rotary and mission systems division, including Stratford, Connecticut-based.

According to a spokesperson, the company would cut the jobs through a mix of transfers to other Lockheed Martin subsidiaries, attrition through people leaving of their own accord, and a limited number of job cuts.”

DECEMBER 11, 2022 — BLACKHAWK DOWN?

Since the Army selected the Bell V-280 Valor tiltrotor aircraft to replace the Sikorsky Black Hawk, what happens to the 13,000 employees, with 8,500 located in Stratford, Bridgeport, Shelton, and Trumbull, Connecticut?

The loss of business also impacts approximately 250 subcontractors and other vendors of Sikorsky sub-components.

Since the company produces a number of other aircraft, could the slack be reduced by sales to foreign governments — possibly with dollars designated for Ukraine? Will there be a contract challenge? Sub-component work?

Time for employees to maintain situational awareness and possibly seek retraining or a side-hustle.

AUGUST 23, 2021 — CLOSURE OF THE COATESVILLE PLANT WITH 360 LAYOFFS

Lockheed Martin has announced the closure of its Sikorsky Coatesville, Pennsylvania helicopter plant scheduled for March 2022.

Approximately 360 employees will be affected by the closure.

According to a company spokesperson, “the company has made a final decision to exit its Coatesville facility and consolidate the work in other Lockheed Martin locations due to a downturn in the commercial helicopter sector.”

AUGUST 3, 2018

Sikorsky spokesperson Paul Jackson noted, “Sikorsky will not renew the lease for the Florida Assembly and Flight Operations property ... and will vacate the building by year-end.

Closing the helicopter assembly operation at the campus it shares with Pratt & Whitney will result in a lay off of about 500 — nearly half of the employees at the Palm Beach County site.

JULY 31, 2018

Sikorsky spokesperson Paul Jackson noted, “Sikorsky informed employees today of a decision to consolidate operations to adjust to lower US Government aircraft demand, eliminate the resulting excess capacity, and protect our ability to compete by reducing cost.

As a result, we will not renew the lease for the Florida Assembly and Flight Operations (FAFO) property in West Palm Beach and will vacate the building by year-end. We will continue to operate the Development Flight Center on the same campus.  Additionally, approximately 150 salaried employee layoffs will occur throughout the company by year-end as a voluntary separation package offered to salaried employees in June did not yield the expected number of applicants. These two actions combined will impact 5% of the Sikorsky workforce. These decisions are always very difficult but necessary to ensure we can deliver affordable products for our customers to complete their missions.”

APRIL 30, 2018 — Original post ...  

It appears that a confluence of events are likely to produce up to 200 permanent layoffs in the Sikorsky/Lockheed’s facility in Jupiter, Florida.

The layoffs appear to be targeted at workers involved with the Blackhawk military helicopter program. 

Lockheed Martin Chairman, President and CEO, Marillyn Hewson, commenting on first quarter 2018 net sales of $11.6 billion said, “Strong operational and program execution in the first quarter allowed us to increase our financial guidance for sales, profit and earnings per share. Our team remains dedicated to performing with excellence, offering affordable and innovative solutions for our customers, and delivering exceptional value to our shareholders.” While also noting that  sales in the Rotary and Missions Systems Group (which includes Sikorsky) increased by $96 million, but “These increases were partially offset by a decrease of $190 million for Sikorsky helicopter programs due to lower volume for government helicopter programs.”

Nothing is set in stone, but the handwriting for some employees is clearly on the wall as company spokesperson said, “We have not made any announcements but continually review all our business operations to ensure we are properly sized for current and longer-term business requirements and economic conditions within our marketplaces.”

Look for an upcoming shootout for the next generation of helicopters. Sikorsky/Boeing’s SB>1 Defiant against Textron/Bell’s V-280 Valor. We can only hope that critical workers can be retained to avoid what happened to the skilled staff at NASA – who appears unable to send astronauts to the International Space Station without Russian launch vehicles. 

Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life or promises for a bright future. We see good people being laid off through no fault of their own. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?

ARE YOU CAUGHT UP IN THE RAT RACE AND ASKING "AM I NEXT?"

Here is an amusing video "Rat Race - A short film story by Steve Cutts" that reminds us that even if we win the rat race, in the end, we are still rats to be manipulated by the external educational, political, economic, and environmental forces that surround us all. 

A reminder, many a truth is revealed in jest ...  

Drink, drugs, and diversions will only get you so far in coping with the complexities of modern life. It is better to have a good mindset and a personal mantra. that works for you. 

NO LOVE AT GUITAR CENTER (11/23/20)

NOVEMBER 23, 2020 — BANKRUPTCY!

Guitar Center filed for Chapter 11 bankruptcy on 11/21/20 in the United States Bankruptcy Court of the Eastern District of Virginia with a prior agreement with creditors. The company was plagued with debt and suffered major revenue loss as customers shopped in the stores where they could try, touch, and feel the goods — and the purchased online at a discount.

OCTOBER 28, 2020 — MORE RUMORS OF IMPRENDING BANKRUPTCY OR SALE

According to published reports, the company has missed a $45 million October interest payment and is in talks with creditors to avoid a default after a thirty-day grace period, after which could lead to a bankruptcy filing. The company faced a similar situation in April when it avoided bankruptcy using a distressed debt exchange.

The company is owned by a private equity firm Ares Management, which acquired its majority stake in 2014 by converting some of the debt it owned in the retailer into equity.

Original post…

Rumors regarding the financial condition of Westlake Village, California-based Guitar Center are swirling in the trade press, some suggesting that Guitar Center may be facing imminent bankruptcy or default on its debt obligations.

 It has been reported that a number of employees may be at risk for layoffs as the company attempts to recover from its financial difficulties.   

Many are pointing to the troubled nature of well-known guitar manufacturers and the changing nature of today’s music business as the proximate cause of Guitar Center’s decline. Others point to the company being run by financial engineering specialists at investment firms rather than retailers and musicians.

With more and more algorithmic sophistication, weak voices can be turned into powerhouse singers and non-musicians can actually create music. Traditional music marketing appears to be dying as record labels turn to 360-degree deals to capture profits in merchandising, videos, and ancillary-branded products. Why pay for music works individually when entire music libraries are available for listening at little or no cost. 

The financial juggling game continues …

It appears that Guitar Center has managed to re-negotiate a portion of its billion-dollar debt by exchanging its 9.625% Senior Unsecured Notes due 2020 with replacement 13% Cash/PIK (Payment In Kind) notes due 2022. 

April 12, 2018 – "Guitar Center, Inc. (the “Company”) announced the expiration and final results of its previously announced exchange offer and consent solicitation to (i) exchange its existing 9.625% Senior Unsecured Notes due 2020, of which there are currently $325 million aggregate principal amount outstanding, for (a) 5% Cash/ 8% PIK Notes due 2022 and (b) warrants to purchase shares of common stock, par value $0.01 per share, of Guitar Center Holdings, Inc., a Delaware corporation and the direct parent of the Company, and (ii) solicit consents to certain proposed amendments to the indenture governing the Existing Notes, commenced by the Company on March 12, 2018".

"At settlement, the Company issued $317,957,000.00 in aggregate principal amount of Exchange Notes, paid an Early Tender Consideration of $1,589,785.00 and support party fees totaling $1,512,775.00 in cash and Holdings issued Warrants, in each case, in exchange for Existing Notes validly tendered and accepted for exchange pursuant to the Exchange Offer. The New Securities have not been registered under the Securities Act of 1933, as amended or the securities laws of any state and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws."

For those unfamiliar with PIK’s, “a PIK or payment in kind is a type of high-risk loan or bond that allows borrowers to pay interest with additional debt rather than cash. This makes it an expensive, high-risk financing instrument because the size of the debt may increase quickly, potentially leaving lenders with big losses if the borrower is unable to pay back the loan.”

March 14, 2018 -- "Guitar Center, Inc. announced that its indirect wholly owned subsidiary Guitar Center Escrow Issuer, Inc. has priced $635 million in aggregate amount of 9.500% senior secured notes due 2021 at an issue price of 98.140%. The Notes are being offered to “qualified institutional buyers” in a private placement, in reliance upon the exemption from the registration requirements of the Securities Act and certain non-U.S. persons outside the United States in accordance with Rule 902 under the Securities Act. The Notes Offering is expected to close on March 16, 2018, subject to customary closing conditions. Following satisfaction of conditions including the completion of the Company’s exchange offer and consent solicitation relating to the Company’s 9.625% Senior Notes due 2020, the Issuer will be merged with and into the Company, with the Company surviving."

"The Company intends to use the net proceeds from this offering, together with borrowings under the Company’s $375.0 million senior secured asset-based revolving credit facility (the 'ABL Facility'), to (i) redeem all of the Company’s outstanding 6.500% Senior Secured Notes due 2019 (including accrued and unpaid interest, if any, to the redemption date) and (ii) pay fees and expenses related to the Notes Offering, the Exchange Offer and an amendment and extension to the ABL Facility.

"The Notes will not be registered under the Securities Act of 1933 or the securities laws of any state and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security, nor shall there be any sale of the Notes or any other security of the Company, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction."

The play here is to move the maturity dates further toward the future to give the company additional breathing room to operate.

The ratings companies such as Moody’s and S&P Global appear unimpressed, with the ratings suggesting a high-degree of risk, weakest creditworthiness relative to other debt issuers, and have the greatest prospect for the recovery of principal or interest. 

The 59-year-old company, controlled by their primary investor Ares Management. L.P., is said to be the world’s largest retailer of musical instruments and associated paraphernalia.

For employees, the handwriting is clearly on the wall and it remains to be seen if Guitar Center can overcome the plague that is affecting the retail sector. 

Are you asking yourself, Am I Next?