About 170 workers at Bluegrass Station in Lexington went on strike at midnight Tuesday. By Wednesday, they were walking in picket lines outside the gates of the facility, which provides supplies for Army Special Forces.
The strike is over unfair labor practices, said Bob Wood, spokesman for the International Association of Machinists and Aerospace Workers. He said workers were being asked to take a pay cut of 30 percent to 50 percent.
The union has yet to see the contact between subcontractor AllSource Global Management and Lockheed Martin that mandates the reclassification of employees to a lower pay grade, Wood said.
"They're flaunting the law," he said. "We're kind of surprised because when you have a company that's a contractor for the military, you usually have a contractor that negotiates in good faith and follows the law. ... Our fight is not against the military. We certainly think Lockheed is behind this."
Lockheed had no comment other than to confirm negotiations had broken down.
Randy Groth, CEO of AllSource Global Management, of Sierra Vista, Ariz., said his company "has provided all of the documentation it's contractually allowed to provide."
He confirmed that the new contract would mean at least a 30 percent across-the-board pay cut for workers, who handle warehouse logistics.
Groth blamed diminishing spending on defense for the shrinking contract.
"This is a national phenomenon," he said. "This stuff's rolling downhill, and everybody's under pressure to cut budgets, cut budgets, cut budgets. ... This is a national crisis, and we're not any different than anybody else."
Negotiations are expected to resume with the union after a cooling-off period, he said.
In October 2013, Maryland-based Lockheed Martin received approval for up to $10.8 million in Kentucky tax incentives, provided it created 391 jobs and invested $15 million.
But in June, more than 100 workers were laid off.
To be eligible for the incentives, Lockheed must maintain base employment level of 1,009. The incentives expire in October 2015.