Tuesday, June 5, 2012

Mandatory Sequestration Threatens Defense Contracting Workers

The trillion dollar mandatory federal spending reduction scheduled to start the first of next year, if Congress fails to come up with a specific deficit  reduction plan by then, could begin taking their toll on employees of defense department contractors as soon as this coming September in the absence of Congressional action. The mandatory spending cuts are required by present law to come half from Department of Defense budgets.

While Congress gave iteslf until January 1, 2013, to act, employers are required by state and federal layoff notification laws to start sending out pink slips to employees as soon as September of this year. Robert J. Stevens, Chairman and CEO of Lockheed Martin, the country’s biggest single defense contractor, “It is quite possible that we will need to notify employees in the September and October time frame that they may or may not have a job in January. … We may have to notify every one of our employees and all or suppliers and subcontractors … and … start this huge cascding effect and bow wave of contract actions. For us, the consequences of sequestration are real, and they are nearer-term than some discussions that are underway today suggest.”

We can only hope our Senators and Congressmen realize that their self imposed deadline of January 1, 2013 really means September 1, 2012 under layoff notifications laws they have pushed through in the recent past.

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