BAE contract canceled; Fort Worth laying off 190

FORT WORTH – BAE Systems will shut down a development operation at Alliance Airport and lay off about 190 workers after South Korea canceled a contract to upgrade more than 130 F-16 fighter jets with new electronics.

The British defense manufacturer had received a $140 million contract for development work in May, and the value of the full contract had been estimated at $1.3 billion.

The upgrade would have put new central mission computers, radar, communication, sensors, navigation and weapons targeting systems on the fighters.

Workers were notified of the layoffs Nov. 6, BAE spokesman Neil Franz said. The company said it plans to offer severance packages to eligible employees who are regularly scheduled to work more than 20 hours a week.

South Korea backed out after the U.S. government indicated that the program’s cost, being negotiated between the governments, would increase to as much as $2.1 billion to $2.4 billion. That would include expenses and services beyond the BAE work, including infrastructure and training.

In May, the first two South Korean F-16s had arrived in Fort Worth and were sitting in the BAE hangar near the Alliance Airport control tower to be worked on. The company had hired about 200 workers and expected to have 300 in north Fort Worth by the end of the year.

In September, South Korea reached an agreement to pay about $7 billion for 40 F-35s — the country’s biggest-ever weapons purchase.

On Nov. 6, BAE said it is “evaluating all current opportunities to upgrade F-16s for international customers to determine, in light of this decision, whether we will pursue these opportunities.”