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Contractors Ignore GOP Warnings on Layoffs

Bill Clark/CQ Roll Call File Photo
Sen. Kelly Ayotte (above) has campaigned around the country, warning of the danger of the sequester with GOP Sens. John McCain and Lindsey Graham.

He believes that Republicans, who have been calling for WARN Act notices before the elections, are looking to score political points and draw attention to the need to address sequestration, which many lawmakers believe would hurt national security and economic growth.

On Wednesday, Sen. Kelly Ayotte (R-N.H.) said: “Sequestration is the law of the land. The administration is effectively telling defense companies to willfully ignore the WARN Act — and assures them that taxpayers will pay for their legal expenses if they do so. Rather than being transparent with American workers about the mass layoffs that will occur as a result of sequestration, the administration is skirting the law, endangering our national security and keeping defense workers in the dark. I will continue my push to get answers about the administration’s legal basis for circumventing WARN.” Ayotte has campaigned around the country, warning of the danger of the sequester with GOP Sens. John McCain (Ariz.) and Lindsey Graham (S.C.).

Defense companies, which largely injected themselves into the pre-Election Day layoff notice squabble months ago, now are caught between Senate Republicans who want them to issue the WARN Act notifications on Nov. 2 and the Obama administration.

One defense industry lobbyist said Defense Department contractors used the WARN Act notices to draw attention to the looming cuts in a way that the president and lawmakers, who are focused on Election Day, would understand.

But several big firms, such as EADS and Lockheed Martin, have backtracked and now say they do not plan to send sequestration-related WARN Act notices this year after the OMB and DOD said it was unnecessary. The administration’s guidance, Lockheed said in a statement, indicated that “DOD anticipates no contract actions on or about 2 January, 2013, and that any action to adjust funding levels on contracts as a result of sequestration would likely not occur for several months.”

AIA’s Sterling said that, no matter the administration’s guidelines, the industry’s message is unchanged on sequestration.

“It doesn’t change anything, whether those workers are notified in October, November or January — 2.14 million people will be losing their jobs,” he said.

Sterling added, “The only thing that will change is if Washington’s leaders come together and develop an alternative during the lame-duck session.”

Even companies that are too small to fall under the WARN Act say they could feel the coming hit if the sequester takes place.

Dorothy Coleman, vice president of tax and domestic economic policy at the National Association of Manufacturers, said her group has focused on smaller businesses that supply big defense contractors.

“These companies are worried that they’re going to have to shut down,” Coleman said. “If they’re not going to have to close their business, they’re looking at having to lose a significant portion of their business.”

Those job losses will ripple through the local economies, she said, affecting businesses of all types. “There is a frustration out there that no one in Washington is trying to solve this problem,” she said.

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