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White House, defense industry officials meet to discuss cuts

February 07, 2013|By W.J. Hennigan
  • Officials view the naval version of Northrop Grumman Corp.'s Global Hawk spy drone at the company's Palmdale manufacturing facility.
Officials view the naval version of Northrop Grumman Corp.'s Global… (Al Seib / Los Angeles Times )

With automatic federal spending cuts set to hit the defense industry on March 1, senior White House officials met with chief executives from contractors to discuss the potential impact.

White House spokesman Jay Carney made the disclosure Wednesday after President Obama urged Congress to find other ways to postpone the $85 billion in cuts.

Under a law approved last year, federal funds of all kinds would be held back, or "sequestered," until there is budget agreement, at which time the funds may be reinstated. The buzzword used by contractors for the cutbacks is "sequestration."

"The focus of their conversation was the potential devastating impact of the sequester going into effect," Carney said.

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The meeting with Obama's top economic advisors included executives from Northrop Grumman Corp., BAE Systems, Pratt & Whitney and ship-maker Huntington Ingalls Industries Inc.

Budget cuts unrelated to the sequester have already stung the Southland.

In November, Northrop, maker of the B-2 bomber and Global Hawk spy drone, revealed plans to eliminate about 200 positions in Woodland Hills and Salt Lake City. In September, the company confirmed that it has accepted buyouts from about 590 employees in its aerospace division. Most of them were at sprawling complexes in Redondo Beach, El Segundo and Palmdale.

That same month, Boeing Co. said it was trimming its executive workforce 30% from 2010 levels. It also revealed plans to sell office buildings in Seal Beach and demolish one in Huntington Beach. It has already sold property in Anaheim.

And there is a trickle-down effect: Northrop, for example, has about 20,000 small businesses that supply parts to its hardware.

In a worst-case scenario, the Aerospace Industries Assn., an Arlington, Va., trade group, estimated that 1 million jobs of all kinds would be lost nationwide, including 126,000 in California.

“It’s a reminder that what happens here and the decisions made, or the failure to act, all of this has an effect on people around the country; it’s not just a parlor game here in Washington,” Carney said.  “These are real-world decisions that significantly affect our economy and the American people.”

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