Report: Military budget cuts would cost SC thousands of jobs

jwilkinson@thestate.comFebruary 23, 2013 

  • How much money do we want our government to spend and on what? How is government shaping our lives and communities? S.C. and the sequester's defense cuts


    Across-the-board cuts to the U.S. military because of the "sequester" set to take effect Friday, could cost South Carolina:

  • More than 13,600 jobs shed from the state's nearly 4,000 defense-contracting companies over the next two years, according to a conservative think tank that tracks defense spending.

  • $807 million in lost earnings during the same period from those contracts, which represents a $1.17 billion decrease in Gross State Product, according to that think tank

  • $60 million in lost payroll this year due to furloughs of up to 22 days for the state's 11,348 civilian Defense Department employees, according to the Defense Department.

  • 2,600 civilian Defense Department jobs lost.

  • Lower funding for training, operations, maintenance and building programs at the state's eight military installations.

  • SOURCES: Department of Defense, For The Common Defense, Center for Security Policy, S.C. Military Base Task Force

COLUMBIA -- Tim Anderson went to work for Columbia's FN Manufacturing, a Belgian firm that produces rifles and machine guns for the U.S. military, a decade ago.

Now, the 42-year-old husband and father of three from Cayce watches the news each night with an increasing sense of dread that automatic cuts to the nation's defense budget, set to take hold Friday, will dry up FN Manufacturing's orders and put him out of work.

"This is my survival," Anderson said as he drilled rifle barrels last week at the Old Clemson Road plant in Northeast Richland. "I have to take care of my family, put my kids through college. And this is jeopardizing my job."

The military faces $500 billion in across-the-board cuts over the next 10 years unless Congress and the president can find an alternative. Those cuts, called the "sequester," are part of $1.2 trillion in cut-- half to the military, half to domestic spending -- mandated after last August's debt-ceiling debacle. Those cuts come on top of $487 billion in reductions already targeted for the Pentagon -- together equaling about 18 percent of the 2012 defense budget.

That's a scary figure in South Carolina, where eight bases and thousands of defense contractors pump $16 billion into the economy each year.

Although the exact fallout of the cuts is hard to pin down, they could cost the state more than 13,000 jobs and $807 million in annual payroll just from its nearly 4,000 defense contractors, according to a conservative, pro-military think tank. Those firms provide everything from toilet paper and salad greens for recruits at Fort Jackson in Columbia and Marine Corps Depot Parris Island in Beaufort County, to armored vehicles built in Ladson to keep soldiers safe from roadside bombs in Afghanistan.

Already, FN Manufacturing has dropped to 500 workers from 785 in 2008, at the height of Iraq and Afghanistan wars. Many of its remaining jobs were saved because the company has transitioned to doing more non-military business, such as making pistols for law enforcement. Those lines make up 40 percent of the company's business today, compared to 5 percent 10 years ago.

"This business is cyclical," said Ralph Young, the company's vice president of human resources. "You have to diversify. "It's going to be traumatic."

More immediately, the cuts could trigger furloughs for the state's 11,348 civilian workers who work for the military -- unpaid days off totaling about 20 percent of their salary -- that will have to be taken by the end of this year. Those workers serve in myriad positions from on-base schools and hospitals, to programs that help returning soldiers deal with post-traumatic stress disorder and find jobs.

State officials, military leaders and defense experts say the numbers are a moving target. Beyond the furloughs, few know what the outcome for the local economy is going to be.

"The estimates change from day to day," said Christine Brim, spokeswoman for the conservative think tank For The Common Defense, which made the job-loss predictions for South Carolina using defense contract data from 2011. "It's all in flux."

While the S.C. Board of Economic Advisors said it can't provide or confirm any specific data about the cuts, it has lowered its estimate of how much personal income will grow in the state to 3 percent this year from 3.5 percent in anticipation of the sequester. Chief economist Frank Rainwater expressed frustration that is seemingly universal among military, economic, political and business leaders: No one seems to know exactly where the ax will fall hardest and how deep the blow.

In a Defense Department memo to base commanders, Pentagon officials have laid out possible measures to save money. They include, among dozens of other suggestions:

  • Laying off temporary and contract workers

  • Cutting maintenance on ships and military hardware

  • Delaying research and defense contracts

  • Cutting flying hours for military pilots

  • Canceling air shows and military flyovers

  • Reducing operating budgets for bases by 30 percent

  • Slowing production of new weapons systems like the F-35 fighter jet.

  • For South Carolina, cancellation of the F-35 could have a big impact. Sumter's Shaw and Marine Corps Air Station Beaufort both are slated to receive the new planes. If they don't, that could impact the bases' scoring in a new round of base closures and realignment, called BRAC, which some experts think could occur as soon as 2015.

    "That is a concern," said William "Dutch" Holland, a retired two-star Air Force general and former commander of the Shaw-based 9th Air Force, who now is executive coordinator of the S.C. Military Base Task Force, charged with protecting the state's bases. "''I don't see how they can make these cuts and not call for another round of BRAC."

    For FN Manufacturing employee Doug Fisher, 52, of Lugoff, the ability the prospect of cuts is unsettling.

    Fisher began working for the gun manufacturer at age 18, when the plant first opened, rising from basic machinist to "setup" specialist today. In that job, he makes sure all of the sophisticated weapons are working properly.

    Fisher said he has never had another job. And if he was laid off, he isn't certain that he could get another one with the same good wages and benefits that he has now.

    "It scares me to death." he said.

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