Vought Aircraft Industries Announces Plans to Consolidate Manufacturing Operations to Dallas Headquarters

Vought to Leverage State Grant to Create 3,000 Jobs in North Texas

DALLAS, FEB. 26, 2004 - Vought Aircraft Industries, the largest privately owned aerostructures manufacturing company in the United States, today announced it will receive a $35 million grant from the Texas Enterprise Fund, which is administered by Texas Gov. Rick Perry's office. In addition to the grant, Vought will work with the governor's office, the General Land Office and several other Texas state agencies to facilitate the creation of 3,000 new jobs in Texas by the end of 2009.

"Today, our company takes a new direction, and we see this Texas Enterprise Fund grant as the first step of a larger plan, that when combined with our own capital resources, will allow Vought to modernize our facilities and position ourselves for the future," said Vought's President and Chief Executive Officer Tom Risley.

"With the commitment of $35 million in Texas Enterprise Fund dollars, we are doing our part to leverage a major economic expansion by a valuable Texas employer that will bring 3,000 jobs to Texas, attract additional employers to our state, and provide the revenue we need to sustain important public investments in areas like education and health care," said Governor Rick Perry.

"Governor Perry, Speaker Craddick and I recognized the enormous economic impact that an investment in Vought Aircraft would have on our state economy. By choosing to invest in Vought, we're bringing good jobs to Texas, and laying the groundwork for additional job growth and investment in our state economy," said Lieutenant Governor David Dewhurst.

Although not finalized, plans for the Vought manufacturing facility in North Texas include resolving our long-term occupancy at the existing Dallas Jefferson Street facility following expiration of the current lease in 2006. The solution includes investment tools at the disposal of the Texas General Land Office, which are expected to allow Vought to solidify a long-term lease agreement in addition to modernization and renovation of the current facilities. State and local authorities are also committed to providing appropriate economic development incentives.

"The prolonged and dramatic downturn in the airline industry has been extremely challenging. We, as a company, have taken a hard look at our long-term business plan in order to remain competitive. Eliminating excess facility costs and plant modernization are two areas of focus for Vought as a company," said Risley.

In connection with the modernization of the Dallas facility, Vought intends to move work from its Stuart, Fla., and Nashville, Tenn., facilities to its Dallas site. The Stuart facility has been under tremendous economic pressure for sometime as a result of the falling demand in the airline industry. This pressure has intensified with the recently announced slowdown by Boeing on the 767 Tanker program. The Nashville facility contains over 2 million square feet, a large portion of which is not used. Operations at these facilities will transition to the Dallas site, avoiding the costs required to modernize and maintain those sites going forward.

Work at the two facilities will be transitioned to the Dallas location gradually over the next 18 to 36 months. Currently, Nashville and Stuart employ approximately 1,000 and 375 people, respectively, in manufacturing, clerical, professional and management positions. Vought intends to offer all employees in these operations the opportunity to transfer to Dallas with accompanying relocation benefits. For Nashville's represented employees, Vought understands that it has certain bargaining obligations with the IAM&AW, and will fully comply with those obligations. Employees at the affected facilities will be provided a schedule of the transition to Dallas, once the plans have been refined. Employees choosing not to move will receive completion bonuses and a severance package.

"While dealing with these types of issues is never easy, we feel that these plans are necessary to ensure that Vought is well-positioned, both now and in the future, to better meet the needs of our customers, the current industry environment and to be prepared for opportunities for growth," concluded Risley.

Some programs that Vought will establish in Dallas will require air delivery of large structures. Runway availability is a key element of the consolidation plan. The City of Dallas and the State of Texas plan to reopen the Hensley Field runway that is located next to the company's Dallas site. The runway could be used by Vought as a private industrial airfield to meet these new program requirements.

In addition to creating more manufacturing jobs in the North Texas region, Vought intends to create new engineering and design opportunities. The positions would be facilitated through a strategic relationship with the University of Texas at Arlington (UTA). Together, Vought and UTA plan to establish an engineering research program through which UTA students will collaborate with engineering teams at Vought on grant proposals and research and development projects.

About Vought

Vought Aircraft Industries, Inc. (www.voughtaircraft.com) is one of the world's largest independent suppliers of aerostructures. Headquartered in Dallas, the company designs and manufactures major airframe structures such as wings, fuselage subassemblies, empennages, nacelles and other components for prime manufacturers of aircraft. Vought has annual sales of approximately $1.2 billion and more than 6,000 employees in seven U.S. locations.


This release contains forward-looking statements within the meaning of section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks and uncertainties. Vought's actual financial results could differ materially from those anticipated due to the company's dependence on conditions in the airline industry, the level of new commercial aircraft orders, production rates for commercial and military aircraft, the level of defense spending, competitive pricing pressures, manufacturing inefficiencies, start-up costs and possible overruns on new contracts, technology and product development risks and uncertainties, availability of materials and components from suppliers and other factors beyond the company's control.

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Lynne M. Warne
(615) 974-6003