Lockheed Martin
on Monday backed down from its summertime threat to issue layoff
warnings to employees just before the November election, saying the
Obama administration has given assurances that it won’t immediately kill
any major defense contracts when automatic spending cuts go into effect
in January.
The announcement ends a months-long standoff with the administration that could have turned into a political headache, but the news drew criticism from Republicans who questioned whether the Pentagon and White House budget office even had the legal authority to give those assurances.
Lockheed Martin and other defense companies had said with massive budget cuts, known as sequesters, slated to take effect Jan. 2, they would have had to send out notices warning of potential layoffs 60 days in advance, under the federal Worker Adjustment and Retraining Notification Act, or the WARN Act.
But now, according to Lockheed, the administration has said no contracts will be canceled in January. What’s more, the Office of Management and Budget said the federal government will pay for severance costs mandated by the WARN Act.
House Armed Services Committee Chairman Howard P “Buck” McKeon accused the White House of something close to extortion.
The announcement ends a months-long standoff with the administration that could have turned into a political headache, but the news drew criticism from Republicans who questioned whether the Pentagon and White House budget office even had the legal authority to give those assurances.
Lockheed Martin and other defense companies had said with massive budget cuts, known as sequesters, slated to take effect Jan. 2, they would have had to send out notices warning of potential layoffs 60 days in advance, under the federal Worker Adjustment and Retraining Notification Act, or the WARN Act.
But now, according to Lockheed, the administration has said no contracts will be canceled in January. What’s more, the Office of Management and Budget said the federal government will pay for severance costs mandated by the WARN Act.
House Armed Services Committee Chairman Howard P “Buck” McKeon accused the White House of something close to extortion.
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