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Defense industry leaders say continued defense cuts could be devastating
by Gene Rector
Mar 13, 2012 | 3537 views | 0 0 comments | 18 18 recommendations | email to a friend | print
Defense budget cuts and the prospect of even more reductions are having a telling impact on the nations aerospace and defense industry.

At an Air Force Association event last week in Arlington, Va., Fred Downey, Aerospace Industries Association vice president, said, “We don’t believe the cuts will stop” and “more unplanned cuts are sure to come.”

According to an AFA account of the session, Downey said defense industry officials met with Defense Secretary Leon Panetta last November regarding the runup period to the fiscal year 2013 budget. That budget request, submitted to Congress in February, will begin a ten-year series of cuts in defense spending totaling $487 billion.

“We told him that the $487 billion in cuts were manageable though not desirable,” Downey told the AFA audience.

But the AIA official said he had serious doubts regarding assumptions in the 2013 budget, particularly those that indicated $60 billion will be saved through additional efficiencies.

“Nobody on the planet believes that,” Downey asserted, “and industry leaders believe investment accounts will be hit harder.”

The fiscal year 2013 budget includes an Air Force request for 54 aircraft, the lowest number since 1914, according to the AFA.

For that reason, companies with cash are not investing in more defense capability, Downey noted, “but rather in information technologies and health care.”

A report commissioned by AIA warns that continued steep cuts in the nation’s defense budget could have devastating effects on the industry and on the nation’s economy.

According to the report, U.S. aerospace and defense companies accounted for $324 billion in sales revenue during 2010. The industry directly employed more than one million workers and created 2.5 million indirect jobs. The industry contributed a net $42 billion to the nation’s trade balance and accounted for 2.23 percent of the country’s gross domestic product.

Marion Blakey, AIA president, is quoted in an AIA release: “The data speak for itself. America’s aerospace and defense industry is a sector that punches far above its weight. Over one million American jobs and the security of our nation are at stake.”

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