CHAMBERSBURG, Pa. — Franklin County’s largest employer braced itself for the fallout from the federal budget cuts set to go into effect Friday.
Letterkenny Army Depot Commander Col. Victor S. Hagan Sr. made a statement to the depot work force that a work furlough of up to 22 nonconsecutive days would begin the week of April 22 and could continue through September if an agreement is not reached.
Former Defense Secretary Leon Panetta told Congress on Feb. 20 that if automatic government spending cuts — called a “sequester” — kick in on March 1, he might have to shorten the workweek for the “vast majority” of the Defense Department’s 800,000 civilian workers.
Letterkenny’s 4,000 workers could lose one day of work per week or 20 percent of their pay as a result of sequestration.
“While we may have no control over sequestration, there are actions that you can start doing right now to prepare for its impact,” Hagan said.
Depot leadership and union partners are developing a Furlough Implementation Plan and will host a Financial Health Workshop and Wellness Fair in the next few weeks to encourage employees to review personal finances in the event of a 20 percent reduction in salary each pay period, he said.
“We now find ourselves in the midst of a perfect storm created by a continuing resolution that puts funding in the wrong places, a shortfall in funds for overseas contingency operations due to higher than anticipated costs in theater, and sequestration,” Hagan said.
“These fiscal constraints affect readiness, the Total Army (Active and Reserve components), DA Civilians and impact local communities,” he said. “In order to meet our national security responsibilities, the Army is prioritizing readiness and programs based on our strategy, while adjusting to fiscal resources available.”
“What we have created is a mess because of all of the rhetoric that has come out of Washington,” said L. Michael Ross, president of the Franklin County Area Development Corporation. “This thing has been so mismanaged and so over the top.”
Politicians made it appear as if the “sky was going to fall” on March 1, and there was going to be a mass exodus at Letterkenny on Monday, he said.
“(If that was to happen), it would be devastating,” Ross said. “Now, we’re learning that the implementation of these cuts is six weeks out, and it’s not going to be mass layoffs. We’re talking about reducing the number of hours they work each week.”
It’s been an unnecessary worry for people and it didn’t have to be, he said.
Letterkenny is working closely with its employees to make sure they fully understand what is taking place and has contacted Franklin County CareerLink for any employees who might need dislocated worker benefits, Ross said.
Ross said Congress still has seven weeks to come up with a solution that could negate the need for furloughs.
But if the federal budget cuts move forward, “people will be better able to manage the effects than we initially thought,” Ross said.
“Not only are they the largest employer in terms of number of employees, but those employees make wages that are higher than the median wage rates in Franklin County,” Ross said.
“Obviously we want Letterkenny at full strength,” Ross said. “But in terms of our abilities to manage the downsizing, we think we will be successful in attracting employers to the area and helping private-sector employers to help mitigate any downsizing that we might experience.”
The sequester is a result of the Budget Control Act of 2011, which passed the House by 269-161 margin with three representatives not voting, and passed the Senate by a margin of 74-26.
U.S. Rep. Bill Shuster and U.S. Sen. Robert Casey Jr. voted in favor of the legislation and U.S. Sen. Pat Toomey voted against it.
The Herald-Mail contacted Shuster’s office on Friday for comment and was told by an office spokesperson that Shuster was traveling and unavailable for comment.