Nathan Hodge
Wall Street Journal
YORK, Pa.—The BAE Systems tank factory here turned out the Bradley fighting vehicles that helped win the 1991 Gulf War and the Hercules tank-retriever that pulled down the statue of Saddam Hussein in 2003. As the Iraqi insurgency raged, plant workers produced new armored trucks to protect U.S. troops from roadside bombs.
Now the York plant faces a new battle: coping with a downturn in military spending after a decade of war.
The Obama administration's budget plan calls for shifting resources to special-operations troops and high-tech equipment, such as drones. And as the war in Afghanistan winds down, the Army plans to deactivate at least two of its heavy brigades—units built in large part around the armored vehicles assembled at the 143-acre plant, set in the rolling hills of south-central Pennsylvania.
"When things are active in a conflict somewhere in the world, we're busy," said Edward Green, a welder with more than three decades of experience at the plant. "And when it's not, we're just hanging in there…In our business, peace kind of sucks."
Worries at the York plant—one of the largest employers in the region—reflect broader national concerns as the Pentagon sets about cutting $487 billion over the next decade. Military spending touches every state in the country, and the Pentagon's biggest weapons projects rely on parts suppliers that are often spread across dozens of congressional districts.
Some defense companies have already shed lines of business they see as less profitable as the Pentagon shifts focus to higher-tech weaponry. Northrop Grumman Corp., for instance, spun off its labor-intensive shipbuilding segment to concentrate on cyberspace and robotic systems.
Compounding the anxiety is the possibility of an additional, across-the-board spending cut beginning next year. If Congress doesn't reverse parts of the 2011 debt-ceiling deal, the Defense Department will be forced to impose the deeper cuts.
A study funded by the Aerospace Industries Association, a trade group lobbying against additional cuts, projected more than one million U.S. jobs might be lost if total military spending cuts reach $1 trillion. The jobs-lost figure includes direct defense-industry employment, supplier jobs and the overall effect of reduced payrolls. The study projects the aerospace and defense sector would lose in the neighborhood of 350,000 jobs under a trillion-dollar cut, out of a current work force of around one million.
The Project on Defense Alternatives, a group that advocates military spending reductions, has said the initial cuts represent only a "modest" trim to bloated defense budgets. But co-director Charles Knight said sudden, sweeping cuts in 2013 may not be ideal in an economy recovering from recession.
"Now everybody [in Washington] wants to back away from it," he said.
Boom-and-bust cycles in military spending are nothing new for the York plant, which has been arming American forces since 1961 in a region with a strong manufacturing tradition. During the Clinton administration, the work force on the shop floor dwindled to around 400 employees.
Orders began to pick back up after the Sept. 11 attacks, and surged with the arrival of the Mine Resistant Ambush Protected Vehicle, or MRAP, a crash program to build blast-resistant trucks for troops in Iraq and Afghanistan. Amid that surge, the labor force peaked at around 2,000, said Melvin Nace, operations manager at the facility.
The plant delivered its final MRAP in 2008, and the last new Bradley ordered by the Army rolled off the line in September.
The company has already done a fair amount of consolidation, shrinking the footprint of the manufacturing floor, consolidating warehouses and making other changes so the company can "do more with less" in an age of fiscal austerity, said Alice Conner, the director of manufacturing engineering for the plant. "The initial budget reductions, OK, fine, we understand that," said Ms. Conner. "The next one would be catastrophic."
Still, there are some bright spots for the factory, where the line that produced Bradley fighting vehicles is now focused on upgrading and rebuilding existing vehicles. The Army has begun to modernize self-propelled howitzers at the facility, and company officials hope international sales will help offset U.S. budget cuts.
Todd Harrold, vice president of manufacturing and York site executive, said the U.K.-based parent company, BAE Systems PLC, and its U.S.-incorporated subsidiary have "a diverse product portfolio" and global customer base that would enable BAE to respond to fluctuations in military spending. And he said the York facility's manufacturing process is leaner and more responsive than it was during the Cold War.
But further cutbacks would ripple through the community. The plant provides business for 700 suppliers and around 10,000 supplier jobs, according to the company. Last year, the company spent $26 million with 139 suppliers in York County, Pa., where motorcycle maker Harley-Davidson Inc. also has an assembly plant.
Kevin Schreiber, the city of York's economic development director, said cuts could "damage the psyche" of the region and its manufacturing base.
Wall Street Journal
YORK, Pa.—The BAE Systems tank factory here turned out the Bradley fighting vehicles that helped win the 1991 Gulf War and the Hercules tank-retriever that pulled down the statue of Saddam Hussein in 2003. As the Iraqi insurgency raged, plant workers produced new armored trucks to protect U.S. troops from roadside bombs.
Now the York plant faces a new battle: coping with a downturn in military spending after a decade of war.
The Obama administration's budget plan calls for shifting resources to special-operations troops and high-tech equipment, such as drones. And as the war in Afghanistan winds down, the Army plans to deactivate at least two of its heavy brigades—units built in large part around the armored vehicles assembled at the 143-acre plant, set in the rolling hills of south-central Pennsylvania.
"When things are active in a conflict somewhere in the world, we're busy," said Edward Green, a welder with more than three decades of experience at the plant. "And when it's not, we're just hanging in there…In our business, peace kind of sucks."
Worries at the York plant—one of the largest employers in the region—reflect broader national concerns as the Pentagon sets about cutting $487 billion over the next decade. Military spending touches every state in the country, and the Pentagon's biggest weapons projects rely on parts suppliers that are often spread across dozens of congressional districts.
Some defense companies have already shed lines of business they see as less profitable as the Pentagon shifts focus to higher-tech weaponry. Northrop Grumman Corp., for instance, spun off its labor-intensive shipbuilding segment to concentrate on cyberspace and robotic systems.
Compounding the anxiety is the possibility of an additional, across-the-board spending cut beginning next year. If Congress doesn't reverse parts of the 2011 debt-ceiling deal, the Defense Department will be forced to impose the deeper cuts.
A study funded by the Aerospace Industries Association, a trade group lobbying against additional cuts, projected more than one million U.S. jobs might be lost if total military spending cuts reach $1 trillion. The jobs-lost figure includes direct defense-industry employment, supplier jobs and the overall effect of reduced payrolls. The study projects the aerospace and defense sector would lose in the neighborhood of 350,000 jobs under a trillion-dollar cut, out of a current work force of around one million.
The Project on Defense Alternatives, a group that advocates military spending reductions, has said the initial cuts represent only a "modest" trim to bloated defense budgets. But co-director Charles Knight said sudden, sweeping cuts in 2013 may not be ideal in an economy recovering from recession.
"Now everybody [in Washington] wants to back away from it," he said.
Boom-and-bust cycles in military spending are nothing new for the York plant, which has been arming American forces since 1961 in a region with a strong manufacturing tradition. During the Clinton administration, the work force on the shop floor dwindled to around 400 employees.
Orders began to pick back up after the Sept. 11 attacks, and surged with the arrival of the Mine Resistant Ambush Protected Vehicle, or MRAP, a crash program to build blast-resistant trucks for troops in Iraq and Afghanistan. Amid that surge, the labor force peaked at around 2,000, said Melvin Nace, operations manager at the facility.
The plant delivered its final MRAP in 2008, and the last new Bradley ordered by the Army rolled off the line in September.
The company has already done a fair amount of consolidation, shrinking the footprint of the manufacturing floor, consolidating warehouses and making other changes so the company can "do more with less" in an age of fiscal austerity, said Alice Conner, the director of manufacturing engineering for the plant. "The initial budget reductions, OK, fine, we understand that," said Ms. Conner. "The next one would be catastrophic."
Still, there are some bright spots for the factory, where the line that produced Bradley fighting vehicles is now focused on upgrading and rebuilding existing vehicles. The Army has begun to modernize self-propelled howitzers at the facility, and company officials hope international sales will help offset U.S. budget cuts.
Todd Harrold, vice president of manufacturing and York site executive, said the U.K.-based parent company, BAE Systems PLC, and its U.S.-incorporated subsidiary have "a diverse product portfolio" and global customer base that would enable BAE to respond to fluctuations in military spending. And he said the York facility's manufacturing process is leaner and more responsive than it was during the Cold War.
But further cutbacks would ripple through the community. The plant provides business for 700 suppliers and around 10,000 supplier jobs, according to the company. Last year, the company spent $26 million with 139 suppliers in York County, Pa., where motorcycle maker Harley-Davidson Inc. also has an assembly plant.
Kevin Schreiber, the city of York's economic development director, said cuts could "damage the psyche" of the region and its manufacturing base.