It looks like several defense contractors will side with high-profile Republicans and ignore the Department of Labor guidance, and send out layoff notices to thousands of their employees four days before the election. At least two contractors will press ahead:
Despite administration warnings that notices related to sequestration were unnecessary, Lockheed Martin and Pratt & Whitney are continuing their preparations.
Lockheed Martin and Pratt & Whitney are going forward with plans to issue layoff notices to thousands of employees due to looming defense cuts under sequestration, despite administration claims that such warnings are unnecessary.
The layoff notices are required, say the defense contractors, under the WARN Act, which requests that federal contractors notify employees of potential layoffs within 60 days of action. The automatic sequester, which would cut $600 billion in defense spending over a ten-year period, would trigger on January 2. About $55 billion of that would affect Fiscal Year 2013. Sixty days notice means that the pink slips would go out November 2, four days before the 2012 elections.
The Labor Department put a couple theories in a guidance for the defense industry arguing that the notices were unnecessary. One, that Congress could overturn the sequester, seemed pretty weak to me. If current law means anything, you have to honor it with anything it triggers. But the Labor Department also said that, because of how procurement works, the actual layoffs wouldn’t happen for months after the trigger hits, meaning that the 60-day clock should not begin on the first day of the trigger.
But the defense industry will ignore this. They know that the best way to ensure that they can get those cuts cancelled is to put the fear of God into their employees and build mass opposition from there. The industry has almost never followed the law when it comes to the WARN Act, but all of a sudden now they are sticklers for detail. The fact that this could affect the Presidential election in states like Virginia and Florida, with high concentrations of military contractors, isn’t far from the minds of these CEOs, I’m sure.
Engine maker Pratt and Whitney’s President David Hess left a little wiggle room in his announcement about the layoff notices, saying that “Some of it may depend on what clarity we get in 30 days,” Hess said. The President has 30 days to deliver a report to Congress detailing how the Administration would handle the sequester cuts if they came to pass. This will guide the industry as to where the cuts will land and how hard they would hit contracting. But regardless of that report, expect the more ideological defense contractors to send out the layoff notices, causing mass anxiety at a sensitive time.




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At least at the defense contractor I work for, corporate management is blaming it all on congress.
Lockheed Martin’s stock price is up today.
PW/UTC is also up.
Bloated businesses frequently have to make staffing cuts as a matter of course, especially if new technology is increasing productivity. There’s no business more bloated than defense contractors, who are also big beneficiaries of government-developed technological innovation. They’ve also got union contracts (and staffing requirements) to deal with when they try to trim the fat.
Blaming it on the gub’mnt is a win-win for them. DC is nothing if not a company town.
They’d have a lot more leverage if they had not off shored so much work to folks who do not live in the U.S.
An excellent book on Lockheed Martin:
http://www.amazon.com/Prophets-War-Lockheed-Military-Industrial-Complex/dp/1568584202
They’re basically just the real government welfare queens.
Good point – they probably also want to loose US employees and take those jobs overseas. Nice excuse.
It’s not like Eisenhower didn’t warn us.
And Lockheed has lots of brothers and sisters sucking on the tit too!!
Raytheon, GE, GD, Halliburton/KBR……just top name a few.
This practice has a long and dishonorable history. Back in the day, on the payday before the election, employers would put a pink slip in their employees’ paychecks. The pink slip warned: “If Candidate X (a Democrat, of course) wins, you’re going to get fired.”
Nice game they play. Lay off people just before the election to help change people’s mind. What can be done to make people equally afraid of cuts to SS and medicare? Defense contractors are the recipients of perpetual military Keynesian stimulus – need it or not. Nice to have friends like Johnny Boy and Lindsey the Tough. We have to stay prepared to beat the shit out of anyone who looks cross eyed at us.
I love this shit. Spend billions to take a trip to mars and leave twenty five million looking for a job. Then add more billions to keep the world’s most well equipped military with their steak dinners while another fifty million citizens live in poverty. O man are we screwed up or what?
Yeah, I attended a workshop years ago in which a couple of L M execs were in attendance. Damn arrogant folks. imo. There was them and then there was the rest of us.
I don’t know about the rest of Jane and John Q Pub(l)ic, but I don’t have any short n’ curlies left. Yank away, Corporate America, yank away! There may be a tipping point coming when none of us have any sensation down there. . .
Signed,
Matthew Detroit
President and CEO
Torch and Pitchfork, LLC.
Election or no, it’s a good thing to know ahead of time before you make major plans based on income you may not have a few months later.
Shut the mofos down. And good riddance.
No, they’re the real government, minus any pesky overhead. . . like humans.
The Mars mission, the 35th mission total since 1965 and the fifth where we landed a satellite on the planet’sa surface, cost $2.1 billion.
FYI…The government is giving each political party $50 million for their conventions. GOP has raised another $50 million in donations.
BTW, I was asked to go the demoicratic convention as a ddelegate but I had to pay my own way or get donations from the community.
Nobody really lkes me that much.
Sounds like you are suffering from “reince preibus”. Loss of sensation in the genital area. UNtreated that can spread to your gingrich.
Which, of course, leads to a messy release of Santorum.
The Magnificent Mindless ‘Merican Murder Machine will still kill.
Starve that beast.
You’re right about that. I stand corrected.
Very good.
I think one of the problems with what’s going on is that as far as I know, the Defense Department still hasn’t said how it plans to implement sequestration, which I guess in itself is a political act- although I’m not sure exactly who it benefits. Really, the DoD should release its sequestration cuts, then let congress argue about them. It would probably quickly take the wind out of the mass pink-slip approach, as well as give congress some concrete facts to argue about.
A single B-2 bomber cost 2 billion.
What is left of the space program is trivial compared to defense spending.
Agree.
Maybe it would help to look at how previous pink slip controversies were provoked and resolved under WARN. Then peel it like an onion taking away partisan motives. If nothing’s left, and never has been, what does that tell us about WARN?
If it’s only partisan, recognize that, and don’t waste more time with it.
It’s almost as if no one is expected to have heard the news about the budget, or have any imagination about what the consequences could be.
I thought defense jobs are not to be out-sourced by law – for national security reasons? But I should say I remember this from a Nation magazine article way back when the F22 (Raptor) purchase was about to be debated. I think Obama admin’s decision to cut purchases of F22 passed despite the industry’s objections.