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Job Cuts Scare Off Would-be Workers

Oct. 21, 2013 - 09:13PM   |  
Lockheed Martin, which among other things builds C-130 aircraft, has shed 17,000 workers since the end of 2010.
Lockheed Martin, which among other things builds C-130 aircraft, has shed 17,000 workers since the end of 2010. (Lockheed Martin)
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WASHINGTON — No single event is driving workers from the defense industry, but the cumulative toll of the downturn paired with near constant brinksmanship in the budget process is starting to push workers away from the sector.

Roughly 10,000 workers were furloughed for stretch during the government shutdown, according to an estimate from the International Association of Machinists and Aerospace Workers (IAMAW). Not only were those furloughs costly to the personal finances of employees, but even the furlough process itself was convoluted.

“Some people were called back and then told they may get sent home again in two weeks,” said Neil Gladstein, director of the strategic resources department at IAMAW.

And it wasn’t just primes, but suppliers lower in the chain were feeling the pressure.

“If Boeing and Lockheed aren’t producing planes, that’s going to ripple through all of the suppliers,” Gladstein said.

On the same day that the shutdown was temporarily resolved, Lockheed Martin announced that it would be cutting another 600 jobs from its workforce. Lockheed isn’t alone in downsizing, as many large defense contractors have been trying to cut costs ahead of the full impact of the sequester.

“This action is necessary to address continuing challenges in our business environment, including continued uncertain program funding, delays in contract awards and an extremely competitive market,” Lockheed Martin Spokesman Keith Little said in a statement.

Little noted that the decision wasn’t tied to the government shutdown itself. “While the government shutdown did impact our business this action is independent from that event,” he said.

Since the end of 2010, Lockheed has dropped 17,000 workers from its payroll, a 13 percent decline from 133,000 total.

The specific employees who will be laid off hasn’t been determined yet, as employees will be informed by Nov. 6, but they will come from the company’s Mission Systems and Training unit. That unit creates components for littoral combat ships and the Aegis combat system, among others.

The announcement came the week after Lockheed lost an Aegis radar competition Raytheon. The competition, worth $1.6 billion for development and delivery of the systems, was seen as a crucial test for Lockheed, which had been providing radars for the Aegis system for decades.

BAE also announced last week that it is closing its Sealy, Texas, plant. About 325 jobs will be lost.

Collectively, the furloughs and the layoffs are making it hard for workers to commit to the sector long term, Gladstein said.

“Some of them are making the decision to move somewhere else given the setbacks,” he said. “There are a lot of workers who are telling their kids not to get into these sectors.”

The Aerospace Industries Association has been warning for the past several years that cuts to defense budgets are taking a toll on workers.

“We’re not surprised by recent announcements of layoffs and plant closures in the aerospace and defense industry in response to budget cuts over the last couple of years,” said Dan Stohr, a spokesman for the association. “Our greatest worry is that important skills and capabilities will be lost as workers transition to other industries as a result of these layoffs. Our workforce has a unique and highly-prized skill set that will be difficult and costly, perhaps impossible, to recreate. We urge Congress and President Obama to work together to put aside sequestration, address the real drivers of our debt and deficit issues and avoid slashing the very innovation and investments we need to grow in the future.”

With the government only funded through the beginning of the new year, the specter of another shutdown and furloughs looms, Gladstein said.

“Everybody is scratching their heads today asking whether we’re going to be going through this again in another couple of months.”

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