As politicians in Washington, D.C., continue to wrangle over the details of sequestration, many employers and employees across Cobb County wait and worry.
“Potentially, furloughs and layoffs are considerations, probably more layoffs than furloughs,” said Johnny Whitaker, spokesman at Lockheed Martin Aeronautics Co.’s South Cobb Drive plant. “I don’t want to cause a panic because right now we don’t know how the sequestration cuts are going to affect us.”
The sequester is a group of cuts to federal spending that took effect March 1, including $42. 7 billion in defense cuts this year. Overall, the sequester cuts discretionary spending across-the-board by $109.3 billion a year from 2014 to 2021 and $85.4 billion this year.
The majority of Lockheed Martin’s business is with the U.S. Department of Defense and federal government agencies. Sales at the Marietta plant are $3.5 billion a year, according to Whitaker. In Cobb County, Lockheed does business with more than 70 outfits, representing businesses located throughout the county and its six cities.
“Of those companies, nine of them are multi-million dollar contracts ranging from $1.1 million to $6.8 million,” Whitaker said. “When you add up the dollar amount of the 70 plus businesses we do business with in Cobb County it totals approximately $38.4 million.”
But the ripple effects of sequestration cuts will be felt far beyond the plant, its 6,800 employees and its suppliers. From falling restaurant receipts to fewer tax breaks, other local businesses will be squeezed as well.
“We do a lot of party or meeting type events for Lockheed,” said Shilling’s manager Janette Pope, whose husband works at Lockheed. “Whenever there are slowdowns or cutbacks at the plant you can tell. Year after year you get the same groups coming in for various events, then all of a sudden you don’t; instead of dinners, they’ll do lunches to save some money, or they just don’t do them at all.”
According to Cobb Chamber Chairman Greg Morgan, there will be a reduction to the refundable portion of the Small Business Health Care Tax.
“This credit is hard to qualify for, but it does mean that some small businesses will feel the pinch and ultimately providing health care coverage just got more expensive for those businesses,” Morgan said. “Right now, we’re waiting to see what’s going to happen with the sequestration. We have good faith in our Georgia delegation that they’re fighting for the business community’s needs.”