After an election campaign that featured jobs as a central issue, some of the nation’s businesses have responded to President Obama’s victory with a series of layoff announcements related to a variety of factors including the New Year’s “fiscal cliff.”
A number of companies had hoped the election of Republican Mitt Romney would raise the chances of avoiding the cliff’s $1 trillion in federal spending cuts, half of them defense-related, plus higher taxes from the expiration of the George W. Bush-era tax cuts. Other factors in the spate of layoff notices included costs related to Mr. Obama’s health care plan and environmental regulations.
The Boeing Co., Groupon Inc., Applebee's International Inc., Papa John's Inc. and Murray Energy Corp. are among those that have announced layoffs or other job cuts in the days since Mr. Obama was re-elected.
Defense giant Boeing, which stands to be one of the biggest losers if $500 billion in automatic defense cuts proceed as scheduled, announced the day after the election that it was cutting 30 percent of its management positions. The aerospace company already has cut costs by $2.2 billion since 2010 and plans to cut another $1.6 billion by 2015.
“We are at one of the most challenging yet opportunity-rich times in our history,” Boeing Defense, Space & Security President and CEO Dennis Muilenburg said in a statement that cited how “funding for the U.S. Department of Defense is under extreme pressure.”
In Washington, congressional leaders from both parties have sounded cautiously optimistic since Tuesday about reaching a long-term budget deal in the coming weeks that would head off the looming tax increases and spending cuts.
Sen. Bob Corker, Tennessee Republican, said Sunday that he is hopeful about a resolution.
“I think there is room. I’ve said, from Day One, the key to solving this is Medicare reform. If we can agree to Medicare reform, I think the other pieces will fall in place,” Mr. Corker said in an appearance on “Fox News Sunday.”
Some Democratic lawmakers and liberal pundits have suggested that going over the “fiscal cliff” would benefit the country more over the long term — and strengthen the Democrats’ political hand in the short term. But Sen. Kent Conrad, North Dakota Democrat, said those suggestions aren’t realistic.
“I don’t know where you are hearing that,” he said on Fox. “You certainty don’t hear that from me. I’ve spent five years trying to put together a package in a bipartisan way to get us back on a sound fiscal course.”
Although Mr. Conrad and other Democrats, including Mr. Obama, have emphasized that revenue would be a key part of any compromise, Republicans have insisted that tax increases could derail an already fragile economy.
“A tax increase never created a new job in this country, and what we need is economic growth,” Rep. Tom Price, Georgia Republican, said on the same Fox program. “We can increase revenue without increasing the tax rates on anybody in this country, we can lower the rates, broaden the base, close the loopholes and put in place pro-growth policies in energy and health care and the regulatory policy and address the spending.”
A Washington compromise on the fiscal cliff, however, was unlikely to change the outlook for some business leaders who already have determined that a second Obama term will be bad for the bottom line.
Murray Energy CEO Robert Murray blamed his company’s layoffs on Mr. Obama’s “war on coal” and pushes for clean-energy manufacturers, and the CEO punctuated his company’s layoffs with a seemingly anti-Obama prayer that he delivered to employees Wednesday.
Mr. Murray, who expects the U.S. coal industry to go out of business by 2030, said he was putting his company into “survival mode.” The Ohio-based coal company is laying off 102 employees at Utah American Energy and 54 people at American Coal, both subsidiaries.View Entire Story
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Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at email@example.com.
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