Bob Stevens: Sequestration Will Affect Existing Business Beginning in March

Bob Stevens

Lockheed Martin CEO Bob Stevens said that scheduled across-the-board cuts to the U.S. defense budget (sequestration) would not affect existing business before March, The Wall Street Journal reported Thursday.

However, Stevens added, there had been “no communication” from the government that the almost $500 billion in military spending cuts over the next decade would be avoided.

According to Stevens, the sequestration plan does not consider national security needs and could force the Lockheed to shed 10,000 jobs.

Lockheed’s CEO said the Pentagon had advised that no contracts were “likely” to be affected for three months after the cuts came into effect on Jan. 2. The company has delayed sending layoff notices.

Lockheed, Boeing Co. and Northrop Grumman Corp. have reported better-than-expected third-quarter profits and have raised their full-year guidance.

Lockheed executives have said the budget cuts could drive more industry consolidation.

“The President is confident that Congress will take the appropriate action to achieve a balanced deficit-reduction package in order to avoid these onerous cuts in both defense and nondefense discretionary spending that were written into the law by Congress,” said White House press secretary Jay Carney.

Stevens said Lockheed plans to continue looking for acquisition opportunities.

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