Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=217000
Story Retrieval Date: 12/12/2013 10:21:35 AM CST
Breeanna DuBuke/Flickr Creative Commons
Illinois-based defense manufacturers are not likely to be hit immediately by proposed sequester cuts.
Sequester could furlough 14,000 civilian defense employees in Illinois
The sequester cuts that threaten to chop defense spending Friday could affect Illinois jobs as soon as April, while local manufacturers would likely be hit later rather than sooner.
Defense stands to lose $42.7 billion, or 9.4 percent, from its 2013 budget over the next seven months.
For Illinois, this could mean approximately 14,000 Department of Defense civilian employees being furloughed, reducing gross pay, the White House said last week. While payroll scale backs are all but certain, manufacturers are confident that current contracts will not be immediately affected.
In addition, the administration said U.S. Army base operations in Illinois could be cut by about $19 million and U.S. Air Force funding slashed by roughly $7 million. This could include the cancellation of four scheduled demolition projects at the Naval Station Great Lakes totaling $2 million and the cancellation of the Blue Angels show in Rockford.
“The Department of Defense estimate of furlough impact for Illinois is just over $88 million,” said Navy Region Midwest public affairs officer Ken Cronk. “The logistics are still being worked out but this means we would work and get paid 16 hours less within a two week pay period.”
AAR Corp. is an Illinois manufacturer that provides a wide array of products and services to the aviation and defense industry.
The Wood Dale-based company held a rally last year in Florida opposing the sequester and its cuts to defense spending. Defense currently makes up approximately 40 percent of AAR’s sales, with the majority of its business coming from commercial aviation customers.
“The number one economic challenge we face is jobs and we must create awareness of these impending cuts and their potential effects,” David Storch, company chairman and CEO, said at the time.
The company, which ranks among the world’s top 100 defense contractors, recently won a Blackhawk helicopter parts contract with the U.S. Army in November.
“Businesses that support defense customers have seen some uncertainty regarding future defense spending priorities,” said communications director Chris Mason. “However, the company remains optimistic as its services help defense customers achieve cost reductions and efficiency gains, enabling them to do more with less.”
Oshkosh Corp. is more sanguine. The Wisconsin-based producer of tough specialty vehicles used in tours oversees.
“The sequester will not impact us in the short-term,” said vice president of communications John Daggett. “What impacts us it that tours are winding down and certain contracts are ending.”