Defense Industry Layoffs to Roil Election, Stocks
Originally published on Fox Business
For defense industry workers, the fiscal cliff everyone is talking about may come sooner than expected.
And Moody's Investors Service is warning that cliff won't be good for certain defense stocks, although it maintains a stable outlook on the sector.
Defense companies are preparing for the automatic U.S. budget cuts coming January 2, 2013, an estimated $52 billion per year, or 10% of the budget, over the next decade.
That means the U.S. defense and aerospace industries, which employs about 1 million workers, are already contemplating job cuts, like the 123,000 job layoffs Lockheed Martin (LMT: 83.30, -0.95, -1.13%) is now warning about.
Under a 1988 law, the Worker Adjustment and Retraining Notification (WARN) Act, defense companies must notify workers 60 days in advance of plant closings and mass layoffs. That puts those layoffs on November 2, two days before the presidential election.
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