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Viewpoint: Aerospace and Defense Industry Joins Forces with Other Groups to Fight Sequestration

By Marion Blakey

With the White House and Congress still at loggerheads on the issue of averting sequestration, AIA has ramped up our efforts to encourage national leaders to come to a balanced, bipartisan solution to the nation’s debt and deficit issues. 

The need to be heard is clear.  After months of warning about the negative economic implications of massive indiscriminant budget cuts to defense and other important government discretionary programs—on top of the cuts we are already experiencing—our message has been borne out.  GDP went into negative territory last quarter for the first time in four years, due in large part to reduced defense spending, and more than half of 100 major government contractors reported experiencing flat or declining revenue and plunging profits in 2012.  Meanwhile, key figures in both parties are making noise about the need to stop sequestration before it causes further damage, but a pathway to resolving this mess is not yet clear.   

Because the stakes are so high, AIA continues to leave no stone unturned in our effort to communicate with policy makers about why sequestration would be a disaster for the economy, national security and our country’s ability to maintain our competitive edge. 

For instance, on February 6, a number of aerospace and defense industry leaders engaged top White House officials in a frank and energetic dialogue about the potential devastating impacts of the sequester going into effect.  Joining me in the meeting with senior White House staff—consisting of Senior Advisor Valerie Jarrett, National Economic Council Director Gene Sperling, OMB Director Jeff Zients and Council of Economic Advisors Chairman Alan Kruger—were AIA Chairman and Northrop Grumman Chairman, CEO and President Wes Bush, Pratt & Whitney President and AIA’s immediate past Chairman David Hess, BAE Systems Inc. President and CEO Linda Hudson, Aurora Flight Sciences Corp. Chairman and CEO John Langford, ITT Exelis President and CEO David Melcher and Huntington Ingalls Industries President and CEO Mike Petters.

As Presidential spokesman Jay Carney accurately described the meeting, a number of the participants disputed the notion that “allowing the sequester to take effect would somehow have limited effect or would be reversible.”  Carney added, “For some of these major companies, the impacts would be long lasting, as they would have to make decisions about programmatic changes they would make and therefore contractual changes.  A company like Northrop Grumman, I believe, would have, for example, something like 20,000 small businesses in their pipeline that would be severely affected by implementation of the sequester.  A lot of these companies, while they are defense contractors, also have significant civilian side business operations that would be negatively affected by the impacts on the R&D budgets, for example.”

The point that jobs-creating, federally-sponsored research and development—perhaps one of the largest potential casualties of sequestration—is worth protecting, was one of the key points of commonality that brought AIA together with leaders of the Association of Public Land Grant Universities, the Association of American Universities and non-defense discretionary organization NDD United on February 11 for a press conference about sequestration at the National Press Club.  Indeed, AAU president Hunter Rawlings noted at the press conference that at first glance it may seem odd for him, a professor of the Classics, to be standing next to AIA Chairman Wes Bush.  But he then pointed out that since both aerospace and defense companies and universities benefit largely from federal R&D spending, and use research to benefit society, such a coupling was not so odd.  Bush seconded this point by noting that our communities need each other not only to fight sequestration but “to help make our economy stronger” through research that impacts public health along with public safety. 

At the press conference, I announced that AIA was sending letters to President Obama and to the congressional leadership, with copies going to every member of Congress urging immediate action to end sequestration.  I ended my remarks by stating, “We’re realistic enough to know that our voice alone won’t decide this debate.  But as evidenced by this unprecedented joining of disparate groups, I’m most gratified that our chorus of voices is gathering strength.  I’m confident that together, we can win this battle.”  And that’s the mindset that AIA, its leaders and members will continue to have as we work with other like-minded groups and individuals to help end the threat of sequestration.