WASHINGTON ― Defense firms are warning they expect to lose employees who refuse to comply with a federal COVID vaccination requirement for contractors, due to take effect in December.
Days after Raytheon Technologies chief executive Greg Hayes said the the company may lose “several thousand” workers due to the mandate, Northrop Grumman chief executive Kathy Warden said Thursday the company is still assessing potential losses.
“It’s really too early to predict what those impacts might be, until we have a better sense of not just the pure quantity of employees who may not meet their requirements, but where they work and what they do in our company,” Warden said on the company’s quarterly earnings call. “We are proactively increasing our hiring now, in anticipation that we may have some loss of workers.”
Some Republican lawmakers have urged the White House to reverse course, suggesting the mandate will result in defense supply chain disruptions and damage national security. The House Armed Services Committee’s ranking member, Rep. Mike Rogers, R-Ala., and 10 of his colleagues released a letter warning the mandate could yield cost and schedule overruns on key contracts.
“We strongly urge you to reconsider the manner in which you are seeking to address this issue so as not to harm the livelihood of civilian contractors, industry partners, and strategic goals of our armed services,” they said in the Oct. 22 letter to President Joe Biden and Defense Secretary Lloyd Austin.
Senate Armed Services Committee member Tommy Tuberville, R-Ala., in his own letter cautioned that workforce reductions at defense firms could worsen defense supply chain problems. He noted Alabama alone employed nearly 100,000 federal contractors in 2020, and “more than 5,000 contractors who support the Department of Defense.
“They provide capabilities to the Pentagon that are often difficult to replicate. Losing any sizable share of a small firms’ workforce means a direct reduction in the ‘economy and efficiency’ that your Order purports to seek to advance. When these firms are unable to perform, our country is at risk,” Tuberville said.
The administration is expected to soon release details about implementing the mandate, which Biden issued Sept. 9. He has said companies with at least 100 employees will have to require all their employees be vaccinated or undergo weekly testing. The mandate for federal contractors goes into effect in Dec. 8, and it does not have a testing option.
Employees of some federal contractors have been protesting what they see as federal overreach into private lives. This month saw 100 shipbuilders protest outside the Bath Iron Works shipyard in Maine, more than 150 General Electric workers stage a walkout in Greenville, S.C., and more than 1,000 Ingalls Shipbuilding workers and their family members rally in Pascagoula, Miss.
For its part, the Pentagon had yet to see any disruptions related to the mandate, but it was in close touch with its vendors and ready to support the mandate, spokesman John Kirby told reporters on Wednesday.
At a Thursday hearing on military depots, Rep. Doug Lamborn, R-Colo., raised concerns about the potential firings or early retirements of skilled depot workers who refuse to get the vaccine and the subsequent loss of institutional knowledge.
“I’m concerned that if we start having firings, and with the organic industrial base that’s already limping in some ways, that’s not going to make the situation any better,” Lamborn said.
Steven Morani, the acting assistant secretary of defense for sustainment, said at the House Armed Services readiness subcommittee hearing the Defense Logistics Agency expects about 1,000 employees to ask for a medical or religious accommodation to not receive the vaccine. So far, he said, people seeking accommodations appear to be more likely to do so on religious grounds.
But he noted that the department will have escalating disciplinary actions for those who do not comply with the vaccine mandate.
And, he said, there is still time to educate workers on the importance of being vaccinated, and the risks of remaining unvaccinated. Some may decide to take the vaccine when it becomes clear their job is at risk, he said.
“We are early in the process, we want to let the process work,” Morani said. “No one is going to be fired on [Nov.] 22nd,” the deadline for civilian defense employees to be vaccinated.
Lamborn said the department should also allow those who previously had COVID to be excepted from the vaccine requirement, saying they have a natural immunity. The Centers for Disease Control and Prevention said in August its study showed vaccination offers higher protection against the disease than having a previous infection.
On Thursday, the White House’s coronavirus response coordinator, Jeff Zients, signaled the Biden administration could be flexible as it enforces the president’s executive order requiring federal workers and government contractors to vaccinate their workers. He downplayed the possibility of workforce disruptions, saying enforcement would be gradual.
“These processes play out across weeks, not days. And so, to be clear, we’re creating flexibility within the system. We’re offering people multiple opportunities to get vaccinated,” Zients said. “There is not a cliff here. And the purpose, I think, most importantly, is to get people vaccinated and protected, not to punish them.”
On Tuesday, Hayes, the Raytheon chief, said in a CNBC interview that 83 percent of the company’s roughly 125,000 U.S. employees are already vaccinated while another 6 percent are “in the process of being vaccinated.” Another 3 percent is seeking religious or medical exemptions, while the remaining 3 percent said they don’t intend to receive the vaccine. (A Raytheon spokesman said the figures are approximate.)
“So, we’re going to be faced on Dec. 8 with a choice. We’re going to potentially lose several thousand people who refuse to be vaccinated,” Hayes said. “Now, this is a tough thing, but we are preparing for it.”
The company, which issued a companywide mandate requiring vaccination by Jan. 1, has already begun hiring people to fill the upcoming vacancies, Hayes said.
The U.S. Chamber of Commerce is among business groups that have asked for a delay of the mandate until after the holiday season in meetings with the White House Office of Management and Budget.
Some defense industry groups have warned the White House that small defense firms would be the hardest hit by the vaccine mandate. The National Defense Industrial Association said it has asked for testing and remote work as alternatives to vaccination.
“The overarching message coming out of these calls [with the White House] is that the administration is willing to take the risk of companies losing some employees,” the chairman of NDIA’s board, Arnold Punaro, said in a letter to members this month. “They believe from their data that there will be ‘noise up front and compliance in the back’ as this directive is implemented.”
“Because we know your workforce is your most valuable asset and one that is not easily replaced, NDIA does not agree unnecessarily losing employees is an acceptable risk to our companies,” he added.
The Associated Press contributed to this report.
Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.
Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.
