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Defense Industry Layoffs Could Stir Up Election, Stocks

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  • Description

    FBN's Liz MacDonald on defense industry layoffs and possible downgrades.

  • Duration 2:28
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109 while the defense industry.

Could be laying off tens of thousands of workers -- automatic budget cuts hit.

But the timing of those layoffs could impact the election and defense -- to and a Fox Business exclusive Elizabeth my dollars and with in next bottom line what did you learn.

What we found out was lucky Martin confirming a Fox Business yes 123000.

Job layoffs is what the companies now contemplating.

And there's a wrinkle in what's going on and a half -- with the federal legislation that was passed in 88.

Meaning that defense contractors have to start warning their workers about these layoffs.

Possibly November 2 which comes in days before.

The presidential election because few months at a time that I.

I wiped -- after the sequestration budget cuts coming down possibly January 2 Picasso that's a big deal and we're also be hearing possibly general dynamics.

-- is already doing layoffs -- so you know what we're talking two to -- Moody's is telling us information that they are saying now that this is credit negative the budget cuts.

Although we are at post World War II highs and depth and defense spending.

-- such as say for certain companies it is credit negative it could downgrade these companies when these budget cuts actually kick in.

OK so can businesses get -- November 2 okay that would these businesses two days before the election right.

And Moody's you've been talking to Moody's did you ask them who would get hit the hardest to get their opinion that's right we did find out and hear the names that they said they have a negative outlook on.

You gonna see here United Technologies -- they're gonna see.

Orbital Sciences and GO -- know why these companies -- here's the here's that's -- They don't have other commercial operations like -- does with an air airplane business.

So that that's the key for defense companies went have been heavily reliant on government spending they have to be able to have commercial operations to withstand this.

But again and again -- -- saying watch out this is credit negative and they are also saying they expect the defense cuts to commence late in 2013 and 2014.

After a big fight in Washington DC so they're still saying.

Watch out now the -- get a -- quickly is.

Starting this July defence companies are gonna start to have basically give their forecasts.

And they could be negative forecasts -- watch out defense industry sector stocks could get hurt.

Coming in the coming weeks of -- can't wait see with the analysts are to say about that -- looming cuts as well exclusive star formulas don't thank you very much delighted.

All right our next.

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