Defense Contractors Begin to ‘Warn’ of Mass Layoffs

FREDERICKSBURG – Virginia’s military-industrial complex keeps chugging along … for now, at least.

Few defense contractors are among the companies announcing layoffs and plant closures in the Old Dominion. But that doesn’t mean cuts aren’t coming.

“Everyone is scared to death,” said Ted Hontz, former chairman of the Fredericksburg Chamber of Commerce Military Affairs Council. “There are so many unknowns about sequestration and how it will be implemented.”

Under the federal Worker Adjustment Retraining and Notification (WARN) Act, any company planning to lay off 50 or more workers is required to notify state officials 60 days ahead of time.

So far, the biggest WARN announcement has come from meat producer Smithfield, which expects to close its Portsmouth plant on April 12, throwing 388 people out of work. That layoff has nothing to do with sequestration.

But defense contractor SERCO could be right behind. The Reston-based company filed WARN notices for facilities in Harrisonburg, Chesapeake and Merrifield.

The company said its “mass layoffs” could affect a combined 373 workers.

SERCO’s filing indicates that 82 employees will lose their jobs in Merrifield on April 1. The firm’s “contingent notices” did not provide dates for Chesapeake, where 216 layoffs are possible, or Harrisonburg, where 75 layoffs are forecast.

Officials at SERCO, whose website touts “innovative service solutions to all branches of the U.S. military, federal civilian agencies and the intelligence community,” declined to comment on the situation.

Hontz, vice president of Basic Commerce & Industries in King George, said the government’s 60-day WARN requirement puts defense-related companies in a difficult position as $45 billion in sequestration cuts begin to roll out.

“You may have a contract today. But you’re lucky to get 24 hours notice (from the government) if that contract is pulled,” he told Watchdog.org Tuesday.

Hontz’s company, which provides software engineering services to the military, has not filed any WARN notices.

Advanced Federal Services Corp., with military contracts at Fort Lee and Fort Eustis, anticipates a combined 168 layoffs, taking effect on March 28 and April 30 respectively.

And defense giant Science Application International Corp.  already handed out pink slips to 80 workers at its Charlottesville office on Dec. 28.

Also in Charlottesville, General Dynamics Information Technology made 84 “permanent reductions” Feb. 28.

Two ship-repair contractors – BAE Systems in Norfolk and NSC Technologies Worldwide in Portsmouth – filed contingent notices late last month. Amid uncertainty about sequestration, neither company indicated how many workers could be affected, nor gave any timelines.

Prior to this month, Virginia’s no-defense businesses dominated the WARN list.

Coal companies Alpha Resources in Wise and SunCoke in Vansant filed closure notices, wiping out 237 jobs.

And two cabinetmakers – Masterbrand of Martinsville and Masco of Atkins – closed their plants during the past five months, laying off 345 and 280 workers respectively.

See this week’s WARN list here.

By Kenric Ward

“This article first appeared on Franklin Center. Reproduced with permission”

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