Although defense firms have warned that some $500 billion in cuts over 10 years will ultimately cause the loss of more than two million jobs countrywide, they have little clarity on how the Defense Department will parse out the pain starting in January.
Pay and benefits for military personnel are exempt from the cuts, but executives are waiting to hear which weapons programs will be hit hardest.
DETAILS DUE WITHIN 30 DAYS
On Tuesday, President Barack Obama signed legislation requiring his administration to detail within 30 days how it will administer the cuts, which may help contractors decide where to cut.
“We’ll make a decision in the future as to whether or not we’ll issue WARN notices. Some of it may depend on what clarity we get in 30 days,” Hess said.
Job cuts at Pratt & Whitney’s U.S. operations could reach into the hundreds, Hess said. The Florida plant does development work on engines for the stealthy F-35 Joint Strike Fighter and builds rocket engines and has been under consideration for new investment to produce engines for exported F-35s.
Should the cuts cause a reduction in the fighter jet’s production rate, the company would have to re-evaluate its expansion plans, Hess added.
Tom Burbage, program integration manager for the F-35 at the plane’s prime contractor, Lockheed Martin, said his firm “appreciates” and will analyze the Labor Department guidance, but management must first answer to shareholders and employees.