Published September 26, 2012
Sikorsky Aircraft Corp. – maker of the Black Hawk helicopter – has announced the elimination of 570 jobs, becoming the most recent defense contractor to announce financial struggles amid tightened defense spending and the potential for drastic cutbacks in January.
The Pentagon plans to cut $487 billion from its budget over the next decade, but contractors and lawmakers alike are alarmed about a separate wave of cuts that could begin Jan. 2 unless Congress and the White House team up to avert them.
The Sikorsky cuts are set to go into effect Dec. 31 when the company closes its upstate New York plant and sends the work to its facility in West Palm Beach, Fla.
"Faced with these difficult economic conditions, we must eliminate excess production capacity and increase operational efficiencies to remain competitive," Paul Jackson, spokesman for the Stratford, Conn.-based subsidiary of United Technologies Corp., said Monday.
The job cutbacks are the latest contractor casualty.
Northrop Grumman recently announced it was cutting 600 aerospace jobs. And the announcements come as House Republicans renew their calls for the Obama administration to reveal the full impact of the next wave of scheduled defense cuts. They're concerned specifically about guidance from the Labor Department over the summer that federal contractors would not have to give 60-days notice of mass layoffs despite a federal law that says companies facing such circumstances should.
The projected $500 billion in additional Pentagon cuts would be the result of so-called sequestration – the automatic spending reductions for the military and other areas that take effect because Congress failed to agree on a deficit-reduction plan this summer.
Rep. John Kline, chairman of the House Committee on Education and the Workforce, suggested Monday that the Labor Department is trying to conceal the full impact.
"The Labor Department is trying to hide the consequences of sequestration from workers," Kline, R-Minn., told Labor Secretary Hilda Solis.
The letter was the second in two months by Republican committee leaders in which they also asked for an update and more detailed information about the obligations federal contractors have in giving employees advanced notice about possible layoffs in January should Congress not reach a new agreement.
"The department's refusal to answer our questions regarding its controversial guidance and how it will affect families and businesses across the country is just the latest in a disturbing pattern of congressional obstruction,” Kline wrote.
Sikorsky's New York facility in Big Flats customized military helicopters sold to foreign governments. The helicopter maker and military contractor announced in September 2011 that it was trimming its worldwide workforce of 18,000 by about 540 jobs, citing the sluggish worldwide economy’s impact on commercial and military customers.
Sikorsky’s signature Black Hawk has been a workhorse for the U.S. military to strike targets and ferry troops in Iraq and Afghanistan. Since 2005, sales at Sikorsky have more than doubled, to $7.36 billion in 2011.
The Associated Press contributed to this report.