Atlanta Business Chronicle - April 30, 2012, By Jacques Couret, Senior Online Editor
Lockheed Martin Corp. warned in a Securities and Exchange Commission filing an additional $1.2 trillion in federal cuts could lead to closures, staff reductions and crippled operations.
Specifically, Lockheed said in its 10-Q quarterly report, filed April 26, the scheduled January 2013 cuts, known as sequestration, would cause “disruption of ongoing programs and initiatives, facilities closures and personnel reductions that would severely impact advanced manufacturing operations and engineering expertise, and accelerate the loss of skills and knowledge, directly undermining a key provision of the new security strategy, which is to preserve the industrial base.”
The federal Budget Control Act of 2011 cuts defense spending by $487 billion over a ten-year period starting in fiscal 2012.
Lockheed’s (NYSE: LMT) Marietta, Ga.-based Aeronautics unit last year saw the ending of the F-22 Raptor program and the loss of about 215 jobs through about 115 involuntary layoffs and 100 voluntarily layoffs.
The Marietta unit’s segment profit rose 6.7 percent to $1.6 billion in 2011.
“The possibility remains, however, that one or more of our programs could be reduced, extended, or terminated as a result of the [Obama] Administration’s continuing assessment of priorities,” Lockheed said in the filing. “Notably, should Congress and the Administration fail to change or delay a pending sequestration of appropriations in fiscal year 2013 imposed by the Budget Act, our customers could see their budgets dramatically reduced across the board in January 2013 with an attendant impact upon procurement of products and services.”
The information above is for general awareness only and does not necessarily reflect the views of the Office of Economic Adjustment or the Department of Defense as a whole.