04/14/2009 (7:12 am)
Defense cuts will cost us
The Pentagon’s pitch to scale back major defense programs may not only put hundreds of jobs at risk at Boeing’s Integrated Defense Systems unit in St. Louis, but also could affect many of Boeing’s suppliers in Missouri and elsewhere.
Defense Secretary Robert Gates wants to cap production of the Boeing Co.’s C-17 transport plane. While final assembly is in Long Beach, Calif., work on the C-17 means 1,000 Boeing jobs in St. Louis.
Missouri congressional leaders are concerned that Gates’ plan would jeopardize jobs at Boeing’s Hazelwood plant, which serves as the final assembly line for the F/A-18 fighter jets.
Gates also wants to stop making Lockheed Martin’s F-22 fighter in which Boeing has a stake.
"It’s not good news," said Republican Congressman Todd Akin of Town and Country, who sits on the House Armed Services Committee.
Like some Republicans, Akin said program cuts would weaken U.S. defense. He added that "Boeing is a big employer" in the St. Louis region.
Many congressional Republicans promised to oppose some of Gates’ cuts. Some such as Sen. Jim Inhofe, R-Okla., represent states where some defense work is in the Pentagon’s cross hairs. One of the vehicles slated to be cut from the Army’s Future Combat Systems program was to be worked on in Oklahoma.
"Sadly, the modernization of our Army is a ‘can that was kicked down the road’ today, yet again," Inhofe said in a statement last week. "Our soldiers deserve better than that."
Boeing is the lead systems integrator on the combat systems program, a role that’s similar to a general contractor.
Sen. Claire McCaskill, D-Mo., said she supported Gates’ efforts to control costs. Weapons systems have "routinely come in obscenely over budget," she said. But she added Gates’ final proposal for F/A-18s and C-17s will affect St. Louis jobs and "deserve close scrutiny."
Defense industry analysts say it may be too early to say who won and who lost, because Gates gave only an outline of spending priorities.
"I can’t give a scorecard," said David J. Berteau, lead defense industry analyst for the Center for Strategic and International Studies, a Washington-based policy research organization. "It’s like we’re being asked to grade a term paper and all we have is the first page and the last page."
Aerospace analyst Richard Aboulafia of the Teal Group said that at this early stage of the budget debate, congressional leaders get to show constituents they’re working for them, the Obama administration gets to show itself as "reformers and change agents," and defense contractors can rally their forces cash till payday advance.
"It’s the battle between ‘time for a change’ and ‘let’s support the folks back home" by preserving jobs, he said. "I would bet on the second. … It is the jobs that will win."
Boeing isn’t the only defense contractor facing possible losses under the Pentagon’s proposal. Lockheed Martin and other defense firms also have products that could be at risk.
Sen. Christopher "Kit" Bond, R-Mo., said the C-17 program is on schedule and within budget. He questioned the Obama administration’s proposal to make the cuts before the results of a Defense Department study of air mobility needs. They are due in June.
Political leaders weren’t the only ones warning of job losses at a time when the nation’s unemployment rate sits at 8.5 percent and is projected to soar higher.
"If we don’t receive additional C-17 orders this year, the production line will shut down by end of next year," said Jerry Drelling, a Boeing spokesman.
Terminating the C-17, he said, would affect 30,000 jobs across the country and would shutter the nation’s last large military aircraft production facility.
Potential job losses also rankled the aerospace workers’ union.
Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, took aim at the proposal to cut off funding for Lockheed Martin F-22 Raptor. Boeing workers in Seattle build the wings and rear fuselage.
"Not only is the decision to cut funding for the F-22 shortsighted militarily, but our economy can ill afford to disperse the thousands of aerospace jobs required to design, construct and maintain aircraft of this caliber," Buffenbarger said in a statement.
Missouri Democrat Ike Skelton, chairman of the House Armed Services Committee, said the "buck stops with Congress" in deciding whether to support Gates’ proposals.
And what if they mean job losses in key congressional districts?
"Just remember," he said. "Our job is to defend the United States, its people and our interests. Sometimes you just have to make tough decisions. That’s the bottom line."
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