General Dynamics Warns of Layoffs

by Christopher Freeburn | March 5, 2013 10:21 am

General Dynamics Warns of Layoffs

Workers at General Dynamics’ (NYSE:GD[1]) NASSCO shipyards are bracing for pink slips resulting from sequester-mandated defense spending cuts[2].

The company, which builds U.S. Navy ships, has notified 1,040 workers that they could be laid off indefinitely starting in late April. Large businesses are required to give workers a warning 60 days before major payroll reductions, Reuters noted.

NASSCO operates three shipyards based in Florida, Virginia and California. It operates the West Coast’s biggest full-service shipyard.

Under the sequester, which took effect after the White House and Congress failed to reach a budget deal last week, federal discretionary spending will be trimmed by $85 billion this year. A substantial portion of the cuts will hit Defense Department contractors[3].

Despite the news, shares of General Dynamics rose fractionally in Tuesday morning trading. Other major defense contractors, including Boeing (NYSE:BA[4]), Lockheed Martin (NYSE:LMT[5]) and Northrop Grumman (NYSE:NOC[6]) were also trading modestly higher.

Endnotes:
  1. GD: http://studio-5.financialcontent.com/investplace/quote?Symbol=GD
  2. resulting from sequester-mandated defense spending cuts: http://www.foxbusiness.com/news/2013/03/04/general-dynamics-unit-others-issue-layoff-notices-blame-us-budget-cuts/
  3. will hit Defense Department contractors: http://investorplace.com/investorpolitics/taking-stock-of-the-sequester/
  4. BA: http://studio-5.financialcontent.com/investplace/quote?Symbol=BA
  5. LMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=LMT
  6. NOC: http://studio-5.financialcontent.com/investplace/quote?Symbol=NOC

Source URL: http://investorplace.com/2013/03/general-dynamics-warns-of-layoffs/
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