AAR Mobility Systems in Cadillac is planning a permanent mass layoff of 130 employees at the end of next month.
In a letter to the Workforce Development Agency in Lansing, a spokeswoman for the company says reductions in Department of Defense spending is partially to blame.
"Due to the reductions in Department of Defense spending, the delay in the defense budget, combined with the delays associated with the DLA contract AAR Mobility Systems continues to experience reductions in sales orders," the letter says.
According to the letter, the mass layoffs will take place on May 31.
A United States labor law requires most employers with 100 or more employees to provide 60 calendar-day advance notice of plant closings or mass layoffs.
This advance notice is intended to give workers and their families transition time to adjust to the loss of work and find other work.
Local businesses in the area are worried about how these cuts could impact them. Maggie's Tavern, a local hot spot in Cadillac, located just around the corner from the factory, sayS that they serve nearly 50 AAR employees per week.
Assistant Manager, Laurie Brunk, says that roughly 15-percent of their business comes from people who work at the facility.
" It will definitely affect the bottom line," says Brunk. "Considering they come in here mostly for lunch, and some come in for dinner, away from business. You figure you multiple those times the amount of a ticket at lunch time, you're going to lose a substantial amount of money."
AAR Mobility Systems is a production company that provides rapid deployment equipment and shelters used by the military. The company was forced to lay off 282 employees in October of 2010 as well.