The move follows advisories from the Department of Defense and the federal Office of Management and Budget “indicating that DOD anticipates no contract actions on or about 2 January, 2013, and that any action to adjust funding levels on contracts as a result of sequestration would likely not occur for several months after 2 Jan,” a Lockheed spokeswoman in Bethesda, Md., said.
The Budget Control Act of 2011 created a supercommittee to cut the federal deficit, but also contained a poison pill sequestration instituting across-the-board cuts of at least 9 percent if the supercommittee failed to make cuts.
Lockheed and other defense contractors warned this summer that layoff notices could be sent days before the election. In response, President Barack Obama’s administration on Friday said the government would cover severance costs if contracts are indeed canceled, resulting in layoffs.
According to The Hill publication, contractors that send out job-loss warnings before sequestration begins would not be eligible for such monies.
Republican Sen. Johnny Isakson, who lives in east Cobb, agreed the layoff warning notices are being made a political football.
“This is my opinion: The president would like for sequestration to happen. It would force $1.2 trillion in cuts without any accountability, and it puts blame on Congress,” Isakson said. “But it would be devastating for our military and our country’s defense.
“Lockheed Martin has already been hit with the ending of the F-22. That, of course, cost jobs in Marietta, Cobb County and north Georgia. The impact of sequestration on forward orders for the C-130 and other aircraft would cause further layoffs,” Isakson said. “My personal opinion is that after the election, Congress will forestall it going into effect and make cuts individually on a cost-benefit basis. But prior to that, the uncertainty does have political consequences, and I think that’s why the president is doing what he’s doing.”
Denise Rakestraw, president of machinists union local 709 in Marietta, said she believes the company’s decision not to send out the WARN notices was based on discussions with the Department of Labor.
“I don’t know for sure whether it is politically motivated or not, but it sure seems that way,” said Rakestraw, whose local represents about 3,500 workers at Lockheed’s plant in Marietta. “The notice is designed for employees to be able to make plans to make a living. If the notice comes with no clear indication as to whether there is going to be layoffs, then the intent of it is lost.”
Lockheed spokeswoman Jen Allen said her company and its leaders still believe the sequestration cuts are ineffective and inefficient public policy “that will weaken our civil government operations, damage our national security, and adversely impact our industry.”
Lockheed Martin’s stock closed at 93.16 Tuesday, down 28 cents, on the New York Stock Exchange.