Global technology company Lockheed Martin announced Wednesday morning that it will add 224 jobs to its operations at Bluegrass Station in Avon in eastern Fayette County over the next few years.
Last week, the company was approved for more than $15.4 million in state tax incentives, foreshadowing the announcement.
Gov. Steve Beshear called the deal a "tremendous vote of confidence in Kentucky's workforce. ... It will mean 224 new jobs for 224 Kentucky families who will be able to go to bed at night much more secure."
The company was considering several states, including North Carolina and Florida, in which to expand to fulfill a military contract estimated to be worth as much as $5 billion.
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Lockheed Martin vice president Howard Yellen said in a statement that the company's $26 million investment at Avon "will improve the existing equipment, tools and facility infrastructure as well as the overall efficiency and quality of work."
Lexington Mayor Jim Gray said the expansion provides "good jobs with a future."
The bulk of the investment will be made over the next three years and jobs will be added as they go along, said Linda Pyfrom, a Lockheed Martin manager of operational excellence for this project. She said the investment reiterates the company's "long-term commitment to the state of Kentucky."
She said about 60 existing job openings are already posted on the company's Web site, Lockheedmartin.com (click on "Careers").
The new jobs will include clerical, manufacturing, information technology and management positions.
Lockheed Martin representatives told state officials that the jobs would pay an average of $21.58 hourly, including benefits.
The costs eligible for Kentucky Business Investment tax incentives totaled $15 million over 10 years, making it a somewhat rare case in which the state agrees essentially to fully fund the eligible parts of the project through incentives.
The state also approved up to $415,000 in tax benefits through the Kentucky Enterprise Initiative Act, which allows companies to recoup state sales and use tax on construction costs, building fixtures, and electronic processing equipment.
In general, when a company is approved for tax incentives, it can keep that amount of money, which it would otherwise pay in taxes, assuming it fulfills the terms of the deal.
Pyfrom said Wednesday that the state incentives swung the contract in Kentucky's favor.
"It really does make a huge difference," she said. "The initiatives made it very easy for us to partner with the state."
The incentives will pay for upgrades at existing state-owned facilities that currently are employed in refurbishing military aircraft and vehicles. Much of the new work will be in logistical support for streamlining the shipping and stocking of parts and equipment, Lockheed Martin said.
There currently are 1,856 full-time employees at Lockheed Martin and partner companies across Kentucky, including at Bluegrass Station, Fort Campbell and the Blue Grass Army Depot in Richmond.
"Many people don't realize it, but from an employment standpoint, the military's impact is felt throughout the Bluegrass," Bob Quick, president and CEO of Commerce Lexington, said in a statement. "Together, Bluegrass Station in Fayette County and Blue Grass Army Depot in Richmond account for an annual economic impact of more than $400 million within our region."
Gray said the company was drawn to Lexington's great quality of life and will in turn improve that of the region.
"A company like Lockheed Martin brings great skill sets, great project management systems," Gray said. "That can teach us beyond our employees at the site. ... That can teach our community."