August 09, 2012
Credit: Credit: DoD
U.S. defense contractors facing automatic budget cuts at the year-end are still considering issuing layoff notices to employees just before the Nov. 6 elections, even though the Obama administration says such warnings are unnecessary.
David Hess, president of aircraft engine maker Pratt & Whitney, told Reuters on Wednesday the company was still examining its legal obligations regarding notification of employees who could be put out of jobs in January.
At issue are some $55 billion in automatic spending cuts for fiscal 2013 that are due to hit on Jan. 2 and which could cost the defense industry thousands of jobs.
Hess and other aerospace industry executives are mounting a campaign to persuade Congress to stop them.
In a controversial move last week, the U.S. Labor Department said the circumstances surrounding the planned cuts were too uncertain to require defense and other federal contractors to comply with the provisions the so-called WARN Act, which requires employees to be notified 60 days before major layoffs or plant closures.
Republican lawmakers immediately accused the Obama administration of trying to suppress potentially damaging notices of layoffs just before the election.
“Right now the WARN Act is the law, and we always comply with the law, so we’re not quite sure we understand the direction from the Department of Labor,” Hess told Reuters at a rally for employees at Pratt & Whitney’s jet engine test facility and rocket engine plant near West Palm Beach, Florida.
The cuts in January stem from an August 2011 congressional budget deal to avoid a historic default on U.S. Treasury debt. Congress pledged to find $1.2 trillion in additional spending cuts by the end of 2012, or they would happen automatically, with half coming from defense spending.