Defense Cuts Starting to Hurt

In preparation for expected defense cuts, Northrop Grumman, the U.S. government's fourth largest contractor, was a no-show at this year's Farnborough International Airshow.

Farnborough is one of the premier aerospace and defense gatherings on the trade show circuit, featuring aerospace companies and products from around the world. It is also the site of multimillion dollar deals with aerospace buyers and sellers converging for equipment demonstrations and sales negotiations. Northrop Grumman officials cited the company's need to control costs ahead of expected defense cuts as the reason behind its decision to skip this year's event. Science Applications International Corp. (SAIC), another top 10 U.S. government contractor, joined Northrop Grumman in not exhibiting at Farnborough.

The Worker Adjustment and Retraining Notification Act (WARN) of 1988 requires employers to provide notice 60 days in advance of covered plant closings and mass layoffs. The failure of last year's Budget Supercommittee to cut government spending means that automatic cuts go into effect on January 2, requiring layoff notices to be delivered to defense workers on November 2 just prior to the presidential election on November 6. The prospect of mass layoffs prior to the election, coupled with the already high unemployment rate, does not bode well for the reelection chances of President Obama or congressional Democrats blocking legislation and demonizing American business.

Tom Roberson blogs at

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