Lockheed Martin Corp., the world’s largest defense contractor with operations in Akron, dropped plans to issue layoff notices in anticipation of defense spending cuts set to begin Jan. 2.
Lockheed said Monday that it decided notices under the Worker Adjustment and Retraining Notification Act aren’t needed “after careful review” of guidance issued last week by the White House Office of Management and Budget and the Defense Department.
Defense contractors had said they might be compelled to warn thousands of workers their jobs might disappear unless President Barack Obama and Congress act before January to avert the spending cuts.
Such 60-day notices would have gone out just before the Nov. 6 elections.
Sequestration, a process intended to reduce the federal deficit, will slice $1.2 trillion over a decade from planned spending, including more than $500 billion from defense.
The federal WARN Act, which became law in 1988, requires most employers with 100 or more workers to give 60 days’ notice of plant closings or “mass layoffs” — defined as labor cutbacks affecting 500 or more workers, or at least 33 percent of the workforce for companies with fewer than 500 employees.
The Labor Department said in July that blanket layoff notices would be “inappropriate” for sequestration given the uncertainty of the spending cuts and how they would affect federal contracts.
Richard Ginman, the Defense Department’s director of defense procurement and acquisition policy, wrote an industry group on Sept. 28 that “any action to adjust funding levels would likely occur, if it occurred at all, several months after sequestration.” The same day, the Office of Management and Budget said the government will cover legal and compensation costs if contractors are held liable in court for not giving enough notice.