Granted, most of Lockheed Martin’s 600 or so Akron jobs will disappear by the time 2015 rolls around, according to the company’s plant closure announcement that shocked the region Thursday.
But chances are good that many of the defense contractor’s local employees will end up with other jobs — in large part because the economy is improving and because their work skills are in demand, observers said Friday.
“Kind of the hopeful piece of this, I think, is because the local economy has been rebounding, manufacturing is in better shape; there really will be opportunities for many of the people laid off,” said John Green, director of the Bliss Institute of Applied Politics at the University of Akron. “There’s never a good time to close a facility but there’s strength in the local economy.”
And that means Lockheed Martin employees will have job opportunities they wouldn’t have had during the Great Recession from 2007-09, he said Friday.
Maryland-based Lockheed Martin early Thursday announced it was closing its Akron facility and four other operations across the country by 2015. Total job losses will be about 4,000 — with 500 of those in Akron. The company cited continued declines in federal government spending as the main reason for its decision. About 82 percent of Lockheed Martin’s $47.2 billion in revenue last year came from the U.S. government.
Lockheed Martin said it will maintain a staff of fewer than 100 people at the landmark Akron Airdock that it leases and has used for aerostat and blimp testing and assembly.
Experts on Friday cited a variety of reasons for Lockheed Martin’s decision, including federal budget decisions that are reducing defense spending. Some state and local economic development representatives said they were talking with the defense contractor over the summer with no indication that massive job cuts were being planned.
Green said he was deeply saddened to learn the news.
“But I guess I wasn’t surprised, given what I have been hearing about the effects of the sequester,” he said. “Part of the problem has been the sequester, which was an automatic set of budget cuts put into place mostly to frighten members of Congress into doing the right thing. So, we got these across-the-board cuts. ... The problem is, they’re just mindless.”
It’s doubtful Lockheed Martin will reverse its decision, said Michael Nelson, chair of the University of Akron economics department.
The overall impact of losing 500 Lockheed Martin jobs will be minimal in the two-county Akron metropolitan area economy that has about 327,000 people employed, Nelson said. (The Akron metro area is made up of Summit and Portage counties.)
“Still, it’s 500 good-paying jobs,” he said. There will be a spinoff effect that hurts suppliers and a “secondary job loss,” he said.
Eric Freedman, chief investment officer with Raleigh, N.C.-based CAPTRUST Financial Services, talked about the Lockheed Martin cutbacks after his appearance Friday morning at the Greater Akron Chamber’s annual economic outlook breakfast.
“It’s obviously a devastating event that can happen when folks have a job uprooted,” Freedman said. “I do think one of the great things about the economy right now, both in terms of Akron and Ohio ... is that manufacturing is seeing increased demand.”
The kinds of skilled labor jobs being cut by Lockheed Martin will be in demand by growing parts of the regional economy such as health care, energy and manufacturing, Freedman said.
Industry analysts who follow Lockheed Martin said the job cuts and plant closures were a business decision.
Lockheed Martin’s cutbacks were necessary and other defense contractors will likely be making similar moves, industry analyst Brian Ruttenbur at CRT Capital Group told Bloomberg News. The United States is reducing military spending in large part because of the wind down of the wars in Iraq and Afghanistan, he said.
JobsOhio, the state’s private development arm, and Greater Akron Chamber officials who met with top Lockheed Martin Akron executives in July said they were given no indication then that jobs were at risk.
Richard Rebadow, executive vice president of the Greater Akron Chamber, said the July meeting was among a series of visits the chamber makes to local businesses. “Everything seemed positive to us,” he said.
Public officials learned of a possible shutdown in late October, said Kristi Tanner, a managing director of JobsOhio. State and city and county officials set up a “response team” to pull together a proposal to retain Lockheed’s Akron jobs, she said.