Sequestration Begins: Northrop Grumman says it wil cut its payroll by nearly 600 employees

Sep 20, 2012
Defense Drumbeat
U.S. Air Force says it may cancel Boeing Refueling Tanker Contract because of coming defense cuts

"Northrop to shed nearly 600 jobs"                                  
"Responding to proposed Pentagon budget cuts, Northrop accepts buyouts from about 590 workers in its aerospace unit....."
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"In January 2011, Boeing cut 900 jobs at its sprawling Long Beach plant, where it builds C-17 cargo jets. Later that year, Lockheed Martin Corp. cut about 1,500 positions across its aeronautics business, including jobs in California. Northrop cut 500 jobs in its aerospace division last year."

                                

The Los Angeles Times
September 18, 2012
                                   
Read Full Article by W.J. Hennigan Here

"In another wallop to Southern California's aerospace industry, defense giant Northrop Grumman Corp. said it is preparing to trim its payroll by nearly 600 workers. Responding to billions of dollars in proposed Pentagon budget cuts, Northrop confirmed it has accepted buyouts from about 590 employees in its aerospace division. Most employees participating in the voluntary buyout program, which began in July, will leave by the end of September. The rest will remain as long as Dec. 14.

'Because of defense budget uncertainties and pressures on current and projected business, we must adjust our budgets by the end of this year to be prepared to meet the challenges of what shapes up as a demanding 2013," Northrop spokesman Thomas Henson said in a statement. "This is a necessary step to address the affordability that will allow us to effectively compete in a very cost-conscious marketplace.'"

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"Under a law approved last year, federal funds of all kinds would be held back, or "sequestered," until there is budget agreement, at which time the funds may be reinstated. The buzzword used by contractors for the cutbacks is "sequestration."

Although there is much speculation about whether Congress would let those automatic cuts actually occur in January, military contractors have been ringing alarms about the potential fallout.

In a worst-case scenario, the Aerospace Industries Assn., an Arlington, Va., trade group, estimated 1 million jobs of all kinds would be lost nationwide, including 126,000 in California.

'We are absolutely anticipating more cuts in employment numbers as Jan. 2 approaches," association spokesman Dan Stohr said. "There's still a great amount of detail that companies need in order to plan a way forward.'

The new budget realities have especially stung Southern California's aerospace industry.

In January 2011, Boeing cut 900 jobs at its sprawling Long Beach plant, where it builds C-17 cargo jets. Later that year, Lockheed Martin Corp. cut about 1,500 positions across its aeronautics business, including jobs in California. Northrop cut 500 jobs in its aerospace division last year."
                                  
                                                                        
"Sequestration Threatens Tanker Deal: USAF Official"

Defense News
September 19, 2012

Read Full Article by Marcus Weisgerber Here

"The U.S. Air Force might have to cancel its contract with Boeing to buy refueling tankers if Congress fails to modify a law mandating federal spending cuts before January, according to a senior service official.

The announcement that the Pentagon might have to cancel the KC-46 contract and renegotiate a multibillion-dollar deal with Boeing is one of the most direct examples of how those budget reductions, know as sequestration, would impact the military.

“I don’t want to break my contract and I’m fearful sequestration may force me to do that,” Maj Gen John Thompson, tanker program executive officer and KC-46 program director, said during a Sept. 18 briefing with reporters at an Air Force Association-sponsored conference in National Harbor, Md.

Since the KC-46 contract award in February 2011, the Air Force has touted its ability to sign a fixed-price development contract for the initial batch of tankers, which are part of a 179-aircraft buy."                                  

112th Congress