Tuesday, April 7, 2009

Defense Budget Cuts Could Effect C-17A Production

Two major military aircraft programs that support thousands of Southern California jobs - including Boeing's Long Beach-based C-17 line - could lose their funding if Congress supports Pentagon budget priorities announced Monday. A third program with a major local presence could see reduced funding, according to the Defense Department proposal.

Defense Secretary Robert Gates said the nation should stop pouring billions into the futuristic, super- expensive F-22 jet fighters and the C-17 Globemaster, a heavy-duty military transport plane. He also recommended reduced funding for the F/A-18 Super Hornet. While assembled in St. Louis by Boeing Co., the Super Hornet's center and aft fuselage are made in El Segundo by Northrop Grumman Corp.

Boeing builds the C-17 in Long Beach with subcontractors in the South Bay. The F-22 and super Hornet also have local subcontractors. The Pentagon, Gates said, wants to move away from both outdated weapons systems conceived in the Cold War and futuristic programs aimed at super-
sophisticated foes. "We must rebalance this department's programs in order to institutionalize and finance our capabilities to fight the wars we are in today and the scenarios we are most likely to face in the years ahead," Gates said.

He also recommended expanding spending on equipment that targets insurgents, such as $2 billion more on surveillance and reconnaissance equipment. That would include funding for 50 new Predator drones such as those that have rained down missiles on militants hiding along the Afghanistan-Pakistan border.

With recession unemployment rising, Congress may balk at many of the cuts in Gates' proposed $534 billion budget for the coming year. Still, despite all the talk of cuts, the total figure would rise from $513 billion for 2009, and Gates spoke of using money more wisely, not asking for less.
Gates' announcement may mean that the 5,000 jobs at the Long Beach plant (as well as its 30,000 suppliers) may be at risk, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. "This would represent a significant hit to the local economy if this comes to fruition," Kyser said. "And you have a down economy and you lay off people and that's just going to slow down the economy."

In an effort to extend the C-17 line, Boeing has been working to secure more international contracts. Some feared that the C-17 line would close this year, but the line will continue until at least August 2010, thanks to a $2.95 billion Air Force contract to build 15 more C-17s.
Some of the Pentagon's defense priorities go counter to those of Rep. Dana Rohrabacher, a Republican whose district includes Long Beach. Rohrabacher's earmark requests for the 2010 federal budget include $4.2 billion for the C-17 program and $3.7 billion for more F-22s.

Rohrabacher said Monday that the C-17 and F-22 represent important programs "hiring thousands upon thousands of people, not only in Southern California, but elsewhere."
"I have recently visited Afghanistan and Iraq, and there's no doubt that the C-17 is a workhorse that enables our troops to get their job done and to be safe," Rohrabacher said. "And to cut the C-17 at a time when you're claiming to be concerned about jobs is absurd.

"At a time when the administration is basically supporting the spending of billions of dollars in the name of stimulating the economy and creating jobs, it's going to pull the plug on a program that already employs thousands and thousands of people. ... It totally reflects a distorted value system." Gates says the Pentagon won't continue the F-22 program beyond 187 planes already planned. Bethesda, Md.-based Lockheed, the nation's largest defense contractor, has said almost 95,000 jobs could be at stake. While Lockheed Martin Corp. builds the F-22, nearly 380 companies in California supply the F-22 program. The aircraft work amounts to annual revenue of about $575million for California contractors.

Gates also hopes to buy just 31 Super Hornets next year, down from 45 this year.

(Long Beach Press Telegram)

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