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Panetta Meeting Top Execs to Discuss Sequestration’s Effects

Jun. 26, 2012 - 06:39PM   |  
By VAGO MURADIAN and MARCUS WEISGERBER   |   Comments
U.S. Defense Secretary Leon Panetta has summoned heads of top defense companies to the Pentagon in recent days to hear how sequestration will impact their businesses and to take the pulse of the industry.
U.S. Defense Secretary Leon Panetta has summoned heads of top defense companies to the Pentagon in recent days to hear how sequestration will impact their businesses and to take the pulse of the industry. (File photo / Getty Images)
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U.S. Defense Secretary Leon Panetta has been summoning the heads of top defense companies to the Pentagon this week to hear how sequestration will impact their businesses and to take the pulse of the industry.

One of the meetings took place June 26, sources said.

Panetta has been meeting with executives “to discuss the way ahead, not just on budget, but partnering generally,” Pentagon Press Secretary George Little said June 26.

Little characterized the meeting as an opportunity for Panetta to touch base with the defense industry, something Panetta has done regularly since taking the reigns at DoD in July 2011.

Panetta’s meetings come a week after the heads of Lockheed Martin, Northrop Grumman and Pratt & Whitney met with top Office of Management and Budget officials seeking greater clarity on the government’s plan for implementing nearly $500 billion in mandatory defense cuts over the next decade that are scheduled to start Jan. 2.

OMB told the executives it does not plan to issue sequestration implementation guidance until after the November elections, sources said. The meeting was requested by Aerospace Industries Association President Marion Blakey.

Although defense industry leaders have long said that planning for sequestration will be difficult given it is unclear what the specific impact of automatic cuts will be, they have become increasingly vocal that job losses would be unavoidable starting in January.

And they’ve stressed that federal guidelines require them to notify their workers of potential mass layoffs at least 60 days in advance — that would be on the eve on the election.

Last week, Lockheed chairman and CEO Robert Stevens said that if Congress fails modify the sequestration law, hundreds of thousands of defense jobs would be at risk.

These themes were among the topics of discussion with Panetta during the meetings, sources said.

In addition, Pentagon acquisition chief Frank Kendall met last week with former DoD officials — know as “grey beards” — to discuss ways to address sequestration, one source said.

Staff writer Zachary Fryer-Biggs contributed to this report.

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