Mass layoffs loom large on defense industry horizon

The U.S. defense industry might experience hundreds of thousands of layoffs if members of Congress don't take action to head off an additional $500 billion in defense budget cuts that could take effect in January 2013, a top Pentagon official said March 29, reports Reuters.

Frank Kendall, the Defense Department's acting under secretary for acquisition, technology and logistics, told the Senate Armed Services Committee that the cuts would have a detrimental impact on key contracts that DOD has with Boeing for a refueling plane and Lockheed Martin for littoral combat ships.

Given the way the Budget Control Act is worded, the defense industry would face fairly deep cuts if applied indiscriminately, rather than on a targeted basis, Kendall told the lawmakers.

He said there was a strong chance that President Barack Obama would use a legal clause to exempt the personnel accounts from the cuts, which would increase the burden that would fall on spending for new weapons, research and development programs, and upgrades for older weapons, the story said.

Defense Systems Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.