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Defense Industry Restructuring: Updated Cost and Savings Information

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Report Type Reports and Testimonies
Report Date April 30, 1998
Report No. NSIAD-98-156
Subject
Summary:

The seven defense business combinations reviewed by GAO estimated that they had spent $1.2 billion on such restructuring activities as the disposal and relocation of facilities and equipment, consolidation of operations and systems, relocation of employees, and workforce reductions. Of this amount, the business combinations spent about $115 million on expenses linked to workforce reductions. Severance pay constituted the majority of these expenses, with lesser amounts going for temporary health benefits and outplacement services. Overall, the business combinations reported that about 18,000 workers or positions were eliminated because of restructuring efforts. Although the Defense Department believes that billions of dollars in benefits will flow from industry restructuring, GAO cautions that those amounts may be overstated.

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