SEALY, Texas -

BAE Systems announced Tuesday the planned closing of its Sealy facility by the end of June 2014.

The facility was a  production site for U.S. military tactical vehicles since 1990. A total of approximately 325 employees that currently support military production will be affected by the closure of the Sealy facility. It is anticipated that most of the Sealy employees will be released from the company between November and the end of June 2014.

"It's a difficult day for Sealy faculty," said John Machisak, director of operations at BAE Systems Sealy.

"The company greatly appreciates the hard work and dedication of the entire workforce in Sealy," said Erwin Bieber, president of BAE Systems Land & Armaments sector. "We explored every possible option to maintain the viability of the facility, but the decline in U.S. defense spending has made it necessary for us to continue rationalizing our business base.  This was a difficult decision, but it in no way reflects upon the hard work and commitment of the employees.  We will do all we can to assist them during this difficult transition."

BAE Systems Sealy facility was the largest of the company's 12 locations in the United States. It produced 75,000 military vehicles over the last 20 years.

"Over last four years we've seen defense spending in vehicles based market been reduced after Iraq surge heavily armored which we produced in 2008-2010 came in excess to the government," said Machisak.

The news hit the town hard in Sealy. Residents will soon loose the largest employer. The historic downtown already has dwindling business; some shops have closed due to the lack of business.

"They keeping laying off our customers will keep leaving they moving Houston move away," said barber Sharon Golightly. "It's killing a lot of businesses around here."

BAE Systems says it will continue to focus on fulfilling its customer commitments and will begin the process to complete or transition existing program work to other BAE Systems facilities.

According to the company, its Sealy facility produces U.S. government and Foreign Military Sales (FMS) trucks for missile platforms, turrets and turret systems for various vehicle platforms, multiple construction cabs, and spare parts for FMTV-based vehicles and MRAPs. The facility also has contracts for commercial oil and gas equipment enclosures.